#All,
Der Goldpreis wird wieder in NY gedrückt mit Erfolg, trotzdem bleiben die Aussichten für Gold günstig.Selbst wenn die realen Zinsen im nächsten Jahr leicht steigen sollten,bleiben die Aussichten für das Gold günstig,so lánge der Dollar schwach bleibt., dass dürfte unter Schwankungen ja der Fall sein.
gruß hpoth
[Blockierte Grafik: http://www.streettracksgoldsha…ut/header_logo3_r1_c8.gif]
Wie im letzten LMC-Bericht erwähnt, hatte der neue amerikanische goldgedeckte ETF am Freitag 6981 400-Unzen Barren (=2,8 Mill Unzen ) aufgehäuft.
Heute sind laut Webseite 103,57 Tonnen Gold, gleich 3,3 Mill Unzen, im Wert von 1,5 Mrd USD im Vermögen. Das würde fast 4% der Weltjahresproduktion der Goldgruben entsprechen.
http://www.streettracksgoldshares.com/index.php?noMsg=true
Eine nennenswerte Summe, die sicherlich die Goldnachfrage gestärkt hat. Da ich vermute, daß es im wesentlichen zusätzliche Nachfrage ist, sehe ich die Konstruktion auch nicht so negativ, wie Kalle.
Noch einmal kurz und letztmalig aus meiner Sicht zu den Texten aus dem Le Metropole:
Jederzeit können einzelne Informationen weggelassen werden, wenn hierzu Einigkeit im Board besteht. Bisher gab es aber in diese Richtung keinerlei konkrete Anregungen, so dass hierüber auch noch nicht diskutiert werden kann.
Natürlich sind deutsche Texte für uns alle leichter lesbar. Aber vergleichbare Inhalte auf Deutsch sind nicht verfügbar; jedenfalls postet Sie hier keiner. Mehrfach wurde nach freiwilligen für Übersetzungen gefragt. Bis dato hat sich aber leider niemand gemeldet.
Es läuft noch eine Auswertung bzw. Abfrage von option63 über den Ort der Veröffentlichung dieser Texte (hier im Thread oder eigener GATA Thread). So weit ich dem folgen konnte, war die Mehrheit für hier. Aber warten wir einfach die Auswertung von option63 ab.
Prinzipiell können die Texte auch leicht ganz weggelassen werden. Dem steht aber entgegen, dass sich doch einige User sehr für die Texte interessieren und die Information nicht missen mögen. Insoweit ist von den anderen Usern eben etwas Toleranz gefragt. Scrollen ist ja nicht allzu schwer ... 
Gruß
Schwabenpfeil
November 30 – Gold $451 down $2.40 – Silver $7.70 down 4 cents
Gold Cartel’s Blatant Assault On Gold Fails Again
The dictionary is the only place that success comes before work. Hard work is the price we must pay for success. I think you can accomplish anything if you're willing to pay the price...Vince Lombardi
GO GATA!!!
There are certain days when you just don’t want to watch the tape (written at 7:45 CST with gold down 30 cents). This is one of them for me. The Gold Cartel went into action as soon as Asian trading began in earnest. When I packed it in for the night, gold was down $2.60. That set the tone for today.
Even though the pound soared and both the euro and yen were higher as we opened trading in New York, the cabal kept the pressure on bullion – EVEN THOUGH the cash market was on fire, as per the Indian premiums. The bums were in action to keep gold from taking out a short-term double top at $455 and to prevent it from breaking out in foreign currency terms.
***
Reporting in again and see gold is now down over $4, confirming for the day the recent crummy action in the shares. Most of the gold world is looking for a correction and The Gold Cartel is happy to oblige. Course the question is how will this all-out attack succeed? My best guess is it won’t for more than a day or two because the physical market is so firm.
If you expected a rant from me after today’s blatantly ludicrous cabal gold mugging, you are correct. What is most disgusting is you will hear nothing of this from the wimps in the gold world. They will sit back like they always do and let the crooks get away with their manipulative interventions. Not going to happen here. A blind squirrel could find acorns before the establishment will deal with the reality of the gold market.
ONCE AGAIN, The Gold Cartel timed their attack following the London Fix of $453.40, which put gold at the unchanged level from yesterday’s Comex close. This Fix confirmed how strong the cash market really is. Therefore, the crooks waited until the world’s buying was priced before they attacked the derivatives paper market on the Comex. Over and over and over we have seen this same modus operandi implemented by the gold price managers over the years, yet the mentally challenged powder-puffs in the establishment gold world never say a word.
For a picture of the timing of today’s obvious attack on gold by cabal forces, go to:
Let us get into some of the obvious reasons for the gold sell-off in New York after the PM Fix in London:
*The strength in the pound, which rose to $191.15.
*The strength in the euro which flew to 133.35 and yen which reached 102.42.
*The weakness in the dollar which sank to 81.60.
*The strength in allied markets such as copper which made it to $1.4535.
*The strength in crude oil which hit $50.40 per barrel.
*The strength in the CRB.
*The strength in the physical market (see JB).
*The weakness in the US stock market.
*The weakening bond market.
*Evidence of growing inflation in the US:
10:03 Chicago Prices Paid index reported 89.8 vs. 84.1
* * * * *
The point is the reasons for the price of gold to soar this morning were unanimously BULLISH, yet even with all these outside market factors totally in its favor, The Gold Cartel capped the price at the unchanged level. CLEARLY, they had an agenda, one which began last night, to take gold down. Yes, some of these extremely favorable outside market factors cooled off a tad later, but only AFTER gold was clobbered by the bums.
One more time. For the ninnies in gold world as to what is actually going on here, we only need to refer to what Paul Volker said in his memoirs. Alan Greenspan is going all out to not make the so-called “same mistake.” Why is it so difficult for gold market commentators to deal with the truth?
"…..Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake."
"Through March, the price of gold rose rapidly, and that knocked the psychological props out from under the dollar."
The above is what today’s assault was all about, pure and simple. The Gold Cartel and elitist allies in New York and Washington are going all out to eliminate a soaring gold price from accelerating the coming dollar disappearing act fiasco. The big bad wolf has his huff and puff machine in high gear.
Now for the good news. Their blatantly aggressive attempt to bury gold didn’t work very well. Having taken gold down to $447.40, they couldn’t even close bullion below the key psychological $450 level. Gold CLOSED closer to its highs of the session than to its lows.
BAD NEWS for the GOLD BEARS from a technical standpoint:
Gold’s monthly performance will not go unnoticed in the big money world. These types of buyers will want IN on dips for some time now:
http://futures.tradingcharts.com/chart/GD/M
The Comex floor reported month-end buying which supported the price late. What a change from years past when we could count on gold tanking at the end of the month as the hedge funds dressed up their short positions. Taking it a step further, many funds put new funds to work at the beginning of each month. This could enhance gold buying tomorrow.
UBS delivered a one-two punch today:
*First:
07:06 NEM downgraded to neutral from buy at UBS (49.21)
While the long-term trend for gold is positive, near-term gold may be ahead of itself. NEM is up 22% in the last four months and is highly leveraged to gold prices. The target is unchanged at $54.25.
* * * * *
*Then they were spotted as a major seller of bullion.
First notice day today on the Comex produced 7,638 Gold contracts and 1,391 Silver contracts for delivery. If they are gobbled up by longs, it will be bullish. If the majority are retendered, it is either a non-event or slightly bearish. HSBC and Bank of Nova Scotia, both heavy hitters in the physical precious metals world, were the largest deliverers.
Gold market related closes:
*The pound: 190.86, up 1.61
*The euro: 132.92, up .16.
*The yen: 102.96, down slightly on the day
*The dollar: 81.82, down .14
*Dec copper: $1.4335, off its highs and down slightly
*WTI crude oil: $49.13, down 63 cents
*The CRB: 290.95, down .15.
*The strength in the physical market: STOUT
*The US stock market: The DOW made new lows late, finishing at 10,428, down 48. The DOG also made lows on the close at 2097, down 11.
*The DEC 30-year bond: 111 2/32, down 13/32. It broke 111 support, dropping to 110/3/4 before recovering. Could have a waterfall coming here.
The Gold Cartel went all out today in a concerted effort to teach gold bulls a lesson. They failed. Perhaps they will win tomorrow, but with so many short-term gold bears out there, the likelihood for the price of gold to take off from here is more likely than getting a meaningful correction.
John Brimelow Report
JB: Gold: It's an eight Giraffe market
Tuesday, November 30, 2004
Indian ex-duty premiums: AM $8.69, PM $8.25, with world gold at $450.95 and $451.85. Lavish for legal imports. The Indian rupee surged to a new high today, with only minor Reserve Bank activity. Consequently local Indian gold prices fell and Indian demand was strong.
With astonishing timing, the WGC’s Gold Demand Trends was released on Thanksgiving Day. It reported that Indian bullion demand (by weight) last quarter was 16% higher than Q3 ’03. This indicates important resilience, since rupee gold was some 10% higher.
Subsequent to the Indian close, the rupee has firmed further, and there can be little doubt that the Bears’ resounding failure to start a rout in NY was due to Indian buying.
The primary reason for this powerful support is the classical Venerosian classical wealth effect: India is booming. The process is being accentuated by an unprecedented inflow of foreign portfolio investment funds, bolstering the rupee.
The Bombay Stock Exchange closed at an all-time high today. Last week the inflow of funds for the year passed the total for last year (a record), overcoming the drought which followed the May elections. There seems no immediate reason for this to stop.
An article in today’s FT entitled "Marriage madness grips India middle class" discusses the fantastic conspicuous consumption this wedding season (without mentioning gold):
"One much-publicised Punjabi wedding last week had South Africa as the motif - the parents of the bride actually transported eight giraffes from Africa to add that authentic touch."
(Paying clients will please note that on this basis I am in for 24 giraffes.)
TOCOM has started liquidating. Faced with yen gold at 12 year highs today, TOCOM volume jumped 120% to equal 30,901 Comex lots and open interest fell 1,127 Comex equivalent, to 105,412 Comex. The active contract closed up 7 yen and gold was only down $1.05 from NY at the close, but world gold tested $450 during the Japanese morning. The inflection point caused by India starting up around 11 AM NY time is becoming quite familiar. (Yesterday in NY gold traded 151,541 contracts. Open interest rose 3,146 lots.)
Mitsubishi reports a 10 tonne drop in the implied "general public" long to 77.4 tonnes. I am told Mitsui, which apparently reckons these things differently, saw a 7 tonne drop to 37 tonnes. It will be recalled this was seen previously, in the summer. The point is that at this pace it cannot last long.
An article in the Shanghai People’s Daily (via thebulliondesk) quotes the general manager of the Gold Exchange to the effect that he hopes for Central Bank approval for foreign participation on the Exchange, currently confined to Chinese.
He also asserts:
"Domestic gold prices don't move fully in line with international prices,"
This is not really true: the Shanghai price is kept very close to world gold, probably by the Central Bank. Interestingly, Shanghai prices have just moved to a small premium after some weeks of being at a discount. This is, no doubt not by coincidence, precisely the reverse of what should happen if locals seriously entertained the idea of a Yuan revaluation.
With the exception of JP Morgan’s Technical Commentary, every Establishment commentator is bearish. Today’s unsuccessful effort to break down gold will require some explaining.
I still think we might see $500 by Christmas. After all, gold was under $420 on November 1.
JB
CARTEL CAPITULATION WATCH
US economic news was very mixed:
09:57 Chicago PMI reported 65.2 vs. consensus 62 -- Reuters
* * * * *
09:54 Consumer confidence 90.5 in November vs 96.0 consensus
* * * * *
08:30 Q3 prelim. GDP reported 3.9% vs. consensus 3.7%; Price Deflator 1.3% vs. consensus 1.3%
Prior reading was 3.7% and 1.3%, respectively. Personal Consumption reported 5.1% vs. consensus 4.7%.
* * * * *
08:56 Redbook chain store sales index (0.5%) in Nov thru 11/27 week vs Oct
The index deteriorated from last week's +0.1% reading, consistent with the weakness evident in the UBS index.
* * * * *
Currency related economic news:
Nov. 30 (Bloomberg) -- Japanese factory production unexpectedly fell in October, households cut spending and the unemployment rate rose, suggesting that a recovery in the world's second-largest economy is faltering.
Industrial production fell 1.6 percent, seasonally adjusted, from September, the Ministry of Economy, Trade and Industry said today in Tokyo, the largest drop since February. The median forecast of 33 economists surveyed by Bloomberg News was for a 0.1 percent gain. Spending by households headed by a salaried worker dropped 1.2 percent, and unemployment rose to 4.7 percent, separate government reports said. –END-
From The King Report last evening:
The Aussie dollar is down because Australian retail sales unexpectedly declined 0.7% in October. A 0.7% gain was expected. But the Australian numbers are worse than the headline figure suggests. Just like in the US, increased spending on soaring gasoline prices perverts the retail sales figure. Australian department store sales fell 2.3% in October, while clothing sales fell 1.6% and supermarket sales fell 1.1%...For Q3, retail sales are +0.9%, the smallest increase in almost 2 years. –END-
The Aussie dollar continued its weakness in New York trading to finish the day at 77.20, down 1.16.
A pet peeve of mine over the years, especially of late, is the nauseating gold market reporting coming from all quarters by those who cover our market – from the beat reporter to the sophisticated analyst sitting in his or her Park Avenue office. It is not only dreadful, most of it is actually disinformation. Incredibly, as bad as it was with gold in the weeds years ago, it actually is worsening as the gold price rises. My only explanation is that there is a greater need to tone down what is really happening gold-wise around the world.
Last week’s Citigroup’s gold commentary was beyond asinine. Now Morgan Stanley has come out with commentary which doesn’t qualify more than what a sixth grader could write. Most every Café member could have come up with material of more significance than this simplistic drivel, which can be reviewed here:
Morgan Stanley
Gold: As The USD Declines
http://www.thebulliondesk.com/…orts/temp/Goldexcerpt.pdf
-END-
Is that the best sophisticated Morgan Stanley can come up with?
Now let us go to the beat reporter. Dow Jones’ Gavin Maguire has been contacted no less than 100 times over the years on various bits of what GATA has uncovered. He refuses to even print our name. His lack of effort to present what really is going on gold market-wise is evident in his latest piece which may be read at:
http://sg.biz.yahoo.com/041129/15/3owoq.html
Some excerpts of
All That Glitters is Gold, Not the Dollar
(With my comments in parentheses):
By Steven Vames and Gavin Maguire
Dow Jones Newswires
Monday, November 29, 2004
But despite the fact that the inverse lockstep has held up so well, it's not a certainty that it will continue to guide markets. As both the dollar's selloff and gold's rally reach new extents, differences are emerging in just how far out on the limb speculators have gotten in each respective market and just how much more they can stomach.
Since the beginning of 2002, gold prices have climbed more than 50 percent from around $285 an ounce. The primary driver behind that has been the dollar's cross-currency spiral lower, particularly the 50 percent the dollar has lost since the euro traded below $0.89 at the beginning of 2002.
Sporadic periods of uncertainty relating to terrorism fears and the war in Iraq, as well as concerns about the potential for a return of inflation, have also steadily drawn buyers to gold and away from the dollar.
Following such huge market moves, however, the profiles of each market don't necessarily look the same. On one side are the gold bugs, whose recent bout of love for the yellow metal has been nothing short of speculative, given that physical supply and demand for gold haven't changed substantially to justify the price rally….
(What horse manure. For the last three months we have reported how demand for gold has been soaring around the world. The Indian premiums have barely backed off once all the way up, indicating roaring demand in that country alone. What are these blind reporters talking about? Even the World Gold Council just reported gold demand is way up. This is clear cut evidence of purposeful disinformation by the Wall Street establishment crowd. Either that or Gavin is just a dumb Irishman with an Australian accent)
But in contrast to the purely speculative gold rally, the dollar's declines have been based on the fundamental concern that foreigners will become less willing to fund the enormous U.S. current account deficit…..
(The jaded authors of this piece won’t quit. They infer the dollar move down is based on warranted fundamental weakness in the dollar, but the gold move up is based on a bunch of unwarranted speculation)
While much of the dollar selling has been speculative, a large portion has been due to so-called "real money" segments of the markets -- asset managers and non-U.S.corporations -- that are making longer-term decisions to allocate out of dollars or repatriate dollar-based earnings before the dollar falls even further…..
(Versus your phony dollars which have been stupid enough to bet on gold the last $200 up)
For both markets, some degree of profit-taking is to be expected as funds cash in their chips for year-end reporting and profit distributions. But such a move could pose a bigger risk to gold than for the dollar, since gains based purely on speculation would be more susceptible than gains made on an combination of speculation and ongoing real-money flows.
(More of the same nonsense)
***
Well, I lost it after writing this and called Gavin up at Dow Jones. He was courteous and listened to my agitated harangue, which covered the following:
*He has been contacted re what GATA has had to say and evidence of our findings for half a decade and has refused to even mention our existence.
*Why is it that the Russian Central Bank would cite GATA in a major presentation and Dow Jones won’t allow us to be mentioned?
*Had he heard of the Sprott Asset Management report on gold? He said, "yes." I asked why he never gave it the time of day? Silence.
*Gavin said that he was citing US demand being weak, not world demand for gold, and that he was told this by one of the largest US coin dealers. I did not disagree about US demand. However, I said his article did not come across that way and gave the perception gold demand overall was weak, which couldn’t be further from the truth.
*I went into the fact that most all his Wall Street sources failed to call this gold move up for three years. Most ALL have been neutral to bearish the entire way up, and are still neutral to bearish. The Morgans and Goldmans have no credibility when it comes to gold. The GATA camp does. We said what was going to happen to the price and why - and have been right for years now. I suggested Gavin check this out and query the Wall Streeters how they could get it so wrong while GATA got it so right.
Still trying to calm down. Having kissed the butts of the press for six years with a nowhere result, I could care less what they think these days. Being helpful, informative and courteous was a complete waste of time. That goes for the WSJ, the Washington Post and the rest of the mainstream phonies who cover gold and the financial markets.
-END-
A favor asked from a GATA friend in the Netherlands:
Since the summer of 2004 market manipulation on the Dow Jones is suspected.
Frequently we can witness very limited daily gains, due to a late rally, on the Dow Jones.
I am looking for a list with the closing gains and loses for each day in the
last year.
Can not find the data on internet and hope a Gata-soldier out there has a complete list to share. I will use the information for a Dutch TV program and column.
thanks in advance...
Willem Middelkoop
willem.middelkoop@wxs.nl
An alert from Mahendra who told me yesterday that we could get a short correction:
Dear Members,
We are very near of ending short term correction in metals.
Don't short gold and silver because they can go up very strongly.
YOU CAN PARTLY BOOK PROFIT IN CURRENCIES BUT DON'T SHORT CURRENCIES AGAINST DOLLAR because few weeks back I said "Will Saturn be able to fulfil my predicted dream price of Japanese Yen to reach 80 (predicted when it was 135 and now is at 105.50), Euro 1.38 (predicted when it was 0.83 and now at 1.29) and Pound 2.10 (predicted when it was 1.38 and now it is 1.855)?
Thanks & GOD Bless
Mahendra
http://www.mahendraprophecy.com/
This article by Tim Wood on Pierre Lassonde befuddles me. Forty percent of the money traded on Comex going to the new US gold fund in the years to come? What is Pierre L smoking?
Tim Wood
Lassonde Sees Trade Switching to US Gold Fund
http://www.resourceinvestor.com/pebble.asp?relid=7206
-END-
Note the comment on Argentina in this article:
Indian buyers ignore gold price rise
http://www.business-standard.c…rypage.php?&autono=174028
Our Commodities Bureau / Mumbai December 01, 2004
Indian consumers seem to be undeterred by the rising gold prices, if the consumer demand data released by the World Gold Council (WGC) for the July - September 2004 quarter is to be believed.
However, WGC has said that jewellery demand in the October - December quarter in India would inevitably be affected by the rise in the prices in November.
Overall, year on year growth rate may not be too greatly reduced since price volatility deterred purchasing towards the end of 2003 as well, WGC added.
According to WGC data, the net consumer demand was higher by 16 per cent in tonnage terms and 28 per cent higher in rupee terms than during the same period in 2003.
For the nine month period from January - September 2004, gold consumption in India increased 9.5 per cent in tonnage terms and 20 per cent in rupee terms.
Commenting on the recent figures, managing director, Indian sub-continent, WGC, Sanjeev Agarwal, said, "The upward trend in the price during the quarter does not seem to have deterred jewellery purchasers in India. Indeed, the reports from the main consuming markets indicate that buyers are not only accustomed to prices in excess of $400 per ounce, but also that they are prepared for possible further price rises."…..
Jewellery demand in Turkey outstripped last year’s record…...
There was a 74 per cent year-on-year rise in net retail investment in Japan as well, with increased buying of the Senryobako treasure boxes, a wooden box filled with 10 kilo bars or gold coins, which have become a major investment success….
On the supply front, the overall supply of gold to the market in July - September 2004 was sharply reduced at 828 tonne, 22 per cent below the levels in the corresponding period last year. Identified net central bank selling was 42 per cent below last year with sales partly offset by continued buying from Argentina.
-END-
On Bema:
Hi Bill,
In the past you've discussed Bema Gold, not always in a happy way. Bema’s third quarter financial report (as of Sept 30) just arrived. The following is under the caption Derivative gains and losses:
"During the quarter ended September 30, 2004, the Company recorded a realized derivative gain of $14.4 million (Q3 - $1.6 million) and an unrealized derivative loss of $25.5 million (Q3 2004 - $13.7 million) on derivative instruments. The net derivative loss of $11.1 million was a result of the increase in the spot price from $396 per ounce at June 30, 2004 to $416 per ounce at the end of September 2004 and the strengthening of the rand…" (emphasis added)
Because of its hedging program, Bema lost $12.l million in 3rd quarter 2003 and $11.1 million in Q3 2004. These are staggering sums given its quarterly revenue averages about $24m. Bema keeps going because it is able to float additional stock, thereby diluting out existing shareholders. Good to see Clive Johnson is earning his stock options.
Hank
Yep Hank, I have nothing nice to say about BEMA because their CEO has privately dissed GATA for years. Then I ended up right next to him at a lunch a few years ago in Vancouver. Learning who he was, I introduced myself. A half-hour later he got up and left, not saying a word. Classy guy!
Hank got back to me with:
Bill,
People like Clive Johnson, Chris Thompson and the executives at Newmont dislike you because you make them look bad. That the gold market is rigged comes as no surprise to them, but they just want to let it pass and have nothing said about the matter. By constantly publicizing the rigging, you make them look like the moral cowards they really are. They are morally inferior to you and they know it. Thus, the hostility.
As far as Bema goes, every quarter they are losing $10-15 million because the price of gold is rising! Feel free to use this.
Just one thing to keep in mind. You are right that gold stocks are the investment of a life time. In all markets knowledge and information is what separates winners from people who lose their money. The key to the gold market is that it is rigged, and that crime will soon come to an end. The irony is that if Johnson, Thompson and the DOW JONES gold reporter had the courage to speak up, the fraud would have ended a long time ago and there would be no opportunity in gold stocks. In the end, the moral cowardice of gold mining executives and financial journalists will make members of the GATA Army a lot of money. I've sent two letter to Johnson which he didn't answer. He is a creep.
Hank
One of our Gata supporters, Linux Gold Corp, came out with an interesting technical report today -
The gold shares continue to trade as if gold is headed back to $350. It is more than pitiful and frustrating. However, c’est la vie. That’s the way it is for now. The XAU lost 3.28 to 106.75. Sure enough the HUI is in heaven again as it took out 240 with ease to close at 236.94, down 5.99.
This could be a major part of the problem. Word to me today is that one of the hot trades among the hedge funds is to buy bullion and short the HUI and other gold stocks against it. This certainly can account for some of the incredibly poor action in the gold shares.
This is producing intense short-term pain for us gold shareholders. However, it will lead to an unbelievable gold share price explosion in the weeks and months to come. It will be breathtaking!
GATA BE IN IT TO WIN IT!
MIDAS
A related note about short-selling
Bill,
The importance of this article in monumental. What it means that short-sellers never have to worry about getting real stock to deliver because, for a fee, the DTC will create counterfeit stock for them. No company is safe from them, and even if you put your stock in a cash account where they supposed can't hypothecate it, it doesn't matter. This is a scandal of mind boggling implications. All those gold stocks that have been heavily shorted were bombed probably without the use of real stock. You don't have to worry about being forced to cover if you can answer any price rise by bombing unlimited additional shorts thanks to the DTC.
C.Harris
***
http://www.investors.com/break…?journalid=24169752&brk=1
StockGate: SEC Paper Presented at SIA Symposium Calls Counterfeiting 'Pervasive'
Nov 29, 2004 (financialwire.net via COMTEX) -- (FinancialWire) The recent Securities Industry of America symposium on Regulation SHO, which was supposed to curtail illegal naked short selling, only further deepened the U.S. Securities and Exchange Commission divide as a dramatic ' some say startling ' new 22-page working paper, "Strategic Delivery Failures in U.S. Equity Markets," was published.
Moderators at the symposium included Steven Kessler, Associate General Counsel for Goldman Sachs & Co. (GS), and Deborah Mittelman, Deputy Director of Global Compliance for Reuters' (RTRSY) Instinet. Panelists included Jeffrey Bernstein, Senior Managing Director of Bear Stearns (BSC), and Robert O'Connor, Executive Director of the Law Department for Morgan Stanley (MWD).
The referenced working paper by University of New Mexico Professor Leslie Boni was initiated while the author was visiting financial economist at the SEC.
She termed the "failures to deliver," which litigants have called "counterfeiting," as being "pervasive."
The full report is published at http://www.investrendinformation.com
Dave Patch, editor of "Stockgate Today," credited the SEC with "putting members on notice that the settlement failure issues presently floating in the markets must be changed."
Patch quoted Boni as noting that "strategic failures" occur "when the short sellers choose not to deliver shares that would be too expensive to borrow". Her analysis of Regulation SHO was that, "pre-Regulation SHO, equity and options market makers strategically failed to deliver shares that were expensive to borrow or impossible to borrow".
Boni said "strategic fails (i.e. naked short sales) likely accounted for a higher percentage of short interest pre-Regulation SHO than previously understood".
The professor said that a whopping 42% of listed stocks at the New York Stock Exchange, NASDAQ and AMEX, and 47% of unlisted stocks in the OTCBB and Pink Sheets had persistent fails of 5 days or more with 4% being above the SEC's threshold limits for failures.
The standard for settlement is presently 3 days with a concept proposal by the SEC in comment to reduce 3 day settlement to 1 day, noted Patch.
The economist pointed to a study conducted by Evans, Geczy, Musto, and Reed in 2003 that provided evidence that while the SRO's have buy-in requirements, such buy-ins almost never occur. She noted that an audit of one market maker showed that all or a portion of shares in 69,063 transactions during 1998-1999 were "fails to deliver."
"The market maker was bought-in on only 86 of these positions," she stated.
Patch said that his own review of the Securities Acts of 1933 and 1934 finds no reference to "strategic failures." In fact, he said, Section 17a of the 1934 act "mandates prompt and accurate clearance and settlement of trades, and the admission of Strategic Failures is also in direct violation of Rule 15c6-1."
Rule 15c6-1 defines the settlement cycle for trades executed and states that no Broker Dealer may enter into a contract for the sale of a security whereby the payment for that security and the delivery of that security is greater than 3 business days. For market making activities there is a slight exemption from the delivery in a Bona Fide Market Making activity but as the SEC and SRO's have repeatedly stated, Bona Fide Market making is not simply supporting the best offer in a naked short sale without also representing the best bid or near best bid in a long trade. They must be actively making a market on both sides of trading to use the exemption, noted Patch.
NBC's "Dateline" recently confirmed to FinancialWire that it is preparing a comprehensive expose of the "naked short selling" controversy.
The reportage is said to focus on allegations that "brokers, through their wholly owned clearing house system, the Depository Trust Corporation (DTCC), have effectively been creating counterfeit shares of stock through their 'Stock Borrow Program', which allows brokers to 'borrow' the same shares over and over again, artificially inflating the share count and driving the price of the stock down.
Stockgate, a growing global malady, is being contested on multiple levels, including judicial, legislative and political.
Delegates to the September 20 annual SEC Forum on Small Business passed several resolutions on the issue to be submitted to the SEC. Among them were:
1. Extend Reg. SHO to apply to all publicly traded companies including non-reporting companies.
2. Recommend that the SEC Commissioners reinstate the proposed provision in Regulation SHO that prohibited a selling shareholder from withdrawing his/her profits from the trade until after delivery of the underlying sold shares.
3. SEC should require all SROs, and any clearinghouse for an SRO that receives securities into accounts for security holders to disclose the fact of the ability to loan the securities in the accounts and allow security holders to opt out of allowing the securities to be loaned.
Robert Shapiro, chair of Sonecon LLC, an economic advisory firm and former Under Secretary of Commerce from 1998 to 2001 and principal economic advisor to President William Clinton in his 1992 campaign, has expressed "serious concerns about the impact of the final version of Regulation SHO regarding short sales on the equity and transparency of our equity markets."
Shapiro holds a Ph.D. from Harvard University and has been a Fellow of the National Bureau of Economic Research, the Brookings Institution, and Harvard University.
Shapiro said the SEC is correct to broaden the terms of regulation of short sales, and applauded the section directing broker dealers to mark all equity orders as "long," "short" or "short exempt." More important, he said, the new "locate and delivery" requirements could substantially reduce stock manipulation carried out through naked short sales -- but only if those requirements are widely applied and strictly enforced.
"Unfortunately, Regulation SHO does not meet either of these two standards. The troubling result is that the Regulation, in effect, establishes an official level of tolerance for unsettled or naked short sales," Shapiro charged.
Shapiro said he strongly concurs with the comments of the North American Securities Administrators Association (NASAA) on the draft rule, which said NASAA was "unable to determine why the Commission proposes to permit significant settlement failures at all. While there are instances when settlement may be legitimately delayed, existing regulations provide for extensions for settlement. If the Commission continues to allow settlement failures, it may well facilitate the harm that the proposal is designed to remedy."
"Until Regulation SHO, this economic counterfeiting has been facilitated by electronic record keeping and the apparent practice of the DTCC and its subsidiary National Securities Clearing Corporation (NSCC) of often disregarding persistent unsettled short positions. With Regulation SHO, the SEC has provided its implicit imprimatur for the same practice in cases covering the vast majority of public companies and billions of dollars."
Shapiro urged the SEC to "reconsider the provisions of Regulations SHO and, at a minimum, apply the 'locate and delivery' requirements for threshold securities to all short sale transactions, and adopt a zero-tolerance policy for significant settlement failures. American investors should feel confident that the SEC will ensure the integrity of every equity transaction they undertake and fully protect their right to receive what they have paid for."
While the battle is still waged in the U.S., some of the threats to small investors' investments are being exacted overseas. Despite some 250 companies winning their exit pass, the FaulkingTruth.com website reported that dozens of companies are still being refused delistings from the Berlin-Bremin Exchange, including ImageWare Systems (IW) and Action Products International (APII). FinancialWire also reported that Sontra Medical Corp. (SONT) is among those whose shares Berlin has resisted delisting.
In all, Faulk said Berliner Freiverkehr CEO Holger Timm reported he has been asked by 386 firms to cease their trading. He is said to have balked at the term delisting, noting that "Trading foreign shares on the third-tier market segment at the Berlin or any other German exchange is not being regarded as a 'listing', therefore it is incorrect to use the term 'delisting' if a company wants to cease trading."……..
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“Wir leben in einer neuen Weltordnung für Rohstoffe als Anlageklasse”, sagte Michael Lewis, Head of Commodities Research bei der Deutschen Bank.
“Wir sind sehr optimistisch für die Entwicklung von Rohstoffpreisen. Hinsichtlich der Aussichten für die Anleihe- und Aktienmärkte sehen wir jedoch signifikante Risiken”, sagte Lewis gegenüber der Financial Times (FT). In den vergangenen 10 Jahren habe sich die Situation am Markt erheblich geändert. Im Unterschied zu den 1990ern würden z.B. die Leitzinsen eher steigen und die Märkte seien einer latenten Terrorgefahr ausgesetzt.
Derzeit empfiehlt Lewis, sich vor allem auf den Energiesektor zu konzentrieren.
Die FT nennt zwei Gründe für den Anstieg der Rohstoffpreise: Das Wachstum in China und der schwächere Dollar.
