Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1153.30 up $0.70 (comex closing time)
Silver: $15.60 up 12 cents (comex closing time)
In the access market 5:15 pm
Gold $1154.45
Silver: $15.64
Gold/silver trading: see kitco charts on the right side of the commentary.
Following is a brief outline on gold and silver comex figures for today:
The gold comex today had a poor delivery day, registering 1 notice served for 100 oz. Silver comex registered 113 notices for 565,000 oz .
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 249.88 tonnes for a loss of 53 tonnes over that period. Lately the removals have been rising!
In silver, the open interest rose by another astonishing 2,458 contracts even though Friday’s silver price was down by 1 cent. The total silver OI continues to remain extremely high with today’s reading at 177,160 contracts. The front month of March fell by 39 contracts. We are now at multi year high in the OI despite a record low price. This dichotomy has been happening now for quite a while and defies logic.What is also strange today is the fact that the OI in went up with a very tiny volume on Friday. This must be scaring our bankers to no end.
We had 113 notices served upon for 565,000 oz.
In gold we had a slight fall in OI with gold down by $0.50 on Friday. The total comex gold OI rests tonight at 424,231 for a loss of 204 contracts. Today, surprisingly we again had only 1 notices served upon for 100 oz.
Today, we had a constant inventory at the GLD/Inventory rests at 750.67 tonnes
In silver, /SLV we had no change in inventory at the SLV/Inventory, remaining at 327.332 million oz
We have a few important stories to bring to your attention today…
1, Strange data again at the comex tonight: huge OI increases in silver despite lower prices/silver OI at multi year highs and yet silver is extremely low in price. Again at the gold comex, we are witnessing massive amounts of our ancient metal of kings leaving the vaults. (harvey)
2, The ECB only purchases 9.8 billion euros of bonds on its first week. The program will turn out to be a huge failure.
(zero hedge)
3. China has 45 tonnes of gold as demand (=withdrawals from SGE)
Koos Jansen
4. China sells 5.5 billion USA of Treasuries in January after sellin g 6 billion in December. Japan now equals China in total USA treasuries held ( 1.239 trillion.usa) zero hedge
5. War of words between Germany and Greece. Greece is attempting to seize German assets as war reparations. Varoufakis gives the Germans the royal finger.
Today, 3 yr Greek paper trades over 20% in yield/ no foreigner will touch Greek paper/total confidence is now lost in Greece.
Greece repays 580 million euros by borrowing from its pension fund
(zero hedge)
6. In the Oil sector, WTI closed at $43.77. The globe is producing in excess 2 million barrels per day and this oil has to be stored somewhere. There will be no more storage space by June. (zero hedge)
7. Now we have Michael Snyder warn us that California has about 1 year of water left: (Michael Snyder)
8. Italian non performing loans equal to 11.5% of GDP. Italy becoming a basket case.
9. We have our first foreign casualty in the meltdown on Austrian Hypo. The German bank DuesselHyp, with a tiny writedown of 348 million euros goes bell up. Is this foreshadowing a future nightmare when a tiny write off of 1.5% of assets creates a total meltdown of a bank?
we have these and other stories for you tonight.
Let us now head over to the comex and assess trading over there today.
Here are today’s comex results:
The total gold comex open interest fell by a tiny margin of 204 contracts today from 424,435 down to 424,231 as gold was down by $0.50 on Friday (at the comex close). We are now in the contract month of March which saw it’s OI lower to 111 for a loss of 19 contracts. We had 0 notices filed on Friday so we lost 19 contracts or an additional 1900 gold oz will not stand for delivery in this delivery month of March. The next big active delivery month is April and here the OI fell by 3683 contracts down to 213,865. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 59,201. The confirmed volume on Friday ( which includes the volume during regular business hours + access market sales the previous day) was poor at 141,212 contracts. I wonder what happened to our HFT boys…probably scared off with the lawsuit filed. Today we had 1 notices filed for 100 oz.
And now for the wild silver comex results. Silver OI rose by an extremely high 2,458 contracts from 174,702 up to 177,160 despite the fact that silver was down by 1 cent with respect to Friday’s trading and equally astonishing that the volume on Friday was extremely light. We are now in the active contract month of March and here the OI fell by 39 contracts down to 805. We had 35 contracts served upon on Friday. Thus we lost 4 contracts or an additional 20,000 oz will not stand in this March delivery month. The estimated volume today was simply awful at 12,513 contracts (just comex sales during regular business hours. Something scared our HFT boys today. The confirmed volume on Friday (regular plus access market) came in at 27,478 contracts which is poor in volume. We had 113 notices filed for 565,000 oz today.
March initial standings
March 16.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
45,010.200 oz (Scotia, HSBC)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
nil
No of oz served (contracts) today
1 contracts (100 oz)
No of oz to be served (notices)
110 contracts (11,000 oz)
Total monthly oz gold served (contracts) so far this month
6 contracts(600 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
114,790.651 oz
Total accumulative withdrawal of gold from the Customer inventory this month
8,511,333.3 oz
Today, we had 0 dealer transactions
total Dealer withdrawals: nil oz
we had 0 dealer deposit
total dealer deposit: nil oz
we had 2 customer withdrawals (and the farce continues)
i) Out of Scotia: 38,580.000 oz (1200 kilobars)
ii) Out of HSBC: 6,430.200 oz (??? not exactly 200 kilobars)
total customer withdrawal: 45,010.200 oz
we had 0 customer deposits:
total customer deposits; nil oz
We had 0 adjustments
Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 1 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices were stopped (received) by JPMorgan customer account.
To calculate the total number of gold ounces standing for the March contract month, we take the total number of notices filed so far for the month (6) x 100 oz or 600 oz , to which we add the difference between the open interest for the front month of March (111) and the number of notices served upon today (1) x 100 oz equals the number of ounces standing.
Thus the initial standings for gold for the March contract month:
No of notices served so far (6) x 100 oz or ounces + {OI for the front month (111) – the number of notices served upon today (1) x 100 oz} = 11,800 oz or.3608 tonnes
we lost 19 contracts or 1900 oz which no doubt were cash settled.
Total dealer inventory: 656,644.474 oz or 20.424 tonnes
Total gold inventory (dealer and customer) = 8.033 million oz. (249.88) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 53.0 tonnes have been net transferred out. However I believe that the gold that enters the gold comex is not real. I cannot see continual additions of strictly kilobars.
end
And now for silver
March silver initial standings
March 16 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil oz
Withdrawals from Customer Inventory
504,618.650 oz (Brinks,Scotia,Delaware,HSBC,CNT)
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
590,147.200 oz (Scotia)
No of oz served (contracts)
113 contracts (565,000 oz)
No of oz to be served (notices)
692 contracts (3,460,000)
Total monthly oz silver served (contracts)
1883 contracts (9,415,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
Total accumulative withdrawal of silver from the Customer inventory this month
4,176,155.6 oz
Today, we had 0 deposit into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawal:
total dealer withdrawal: nil oz
We had 1 customer deposits:
i) Into Scotia: 590,147.200 oz
total customer deposit: 590,147.200 oz
We had 4 customer withdrawals:
i) Out of Brinks: 7863.15 oz
ii) Out of Scotia: 60,874.400 oz
iii) Out of Delaware: 8,758.300 oz
iv) Out of HSBC: 400142.120 oz
v) Out of CNT: 26,980.68 oz
total withdrawals; 504,618.65 oz
we had 1 adjustment
i) out of CNT: 574,284.88 oz was adjusted out of the customer and this landed into the dealer account of CNT;
Total dealer inventory: 69.433 million oz
Total of all silver inventory (dealer and customer) 176.432 million oz
.
The total number of notices filed today is represented by 113 contracts for 565,000 oz. To calculate the number of silver ounces that will stand for delivery in March, we take the total number of notices filed for the month so far at (1883) x 5,000 oz = 9,415,000 oz to which we add the difference between the open interest for the front month of March (805) and the number of notices served upon today (113) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the March contract month:
1883 (notices served so far) + { OI for front month of March( 805) -number of notices served upon today (113} x 5000 oz = 12,895,000 oz standing for the March contract month.
we lost 4 contracts or an additional 20,000 oz will not stand for delivery in March.
for those wishing to see the rest of data today see:
http://www.harveyorgan.wordpress.com orhttp://www.harveyorganblog.com
end
The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.
***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:
i) demand from paper gold shareholders
ii) demand from the bankers who then redeem for gold to send this gold onto China
vs no sellers of GLD paper.
And now the Gold inventory at the GLD:
March 16/no change in gold inventory at the GLD/Inventory 750.67 tonnes
March 13/ we had a small change in gold inventory at the GLD (small withdrawal/probably to pay for fees)/Inventory at 750.67 tonnes
March 12.we had a withdrawal of 2.09 tonnes of gold at the GLD/Inventory at 750.95 tonnes
March 11.2015: no changes in gold inventory at the GLD/Inventory at 753.04 tonnes
March 10 no report on the GLD tonight/computer down/inventory remains 753.04 tonnes
March 9/ we had another huge withdrawal of 3.38 tonnes of gold from the GLD, no doubt heading for Shanghai/Inventory 753.04 tonnes
March 6/we had a huge withdrawal of 4.48 tonnes of gold from the GLD/inventory rests tonight at 756.32/Also HSBC is getting out of the gold business in London and is giving up all of its 7 vaults.
March 5 no change in gold inventory at the GLD/760.80 tonnnes
March 4/ no change/inventory 760.80 tonnes
March 3 we had another 2.69 tonnes of gold withdrawn from the GLD. Inventory is now 760.80 tonnes.
March 2 we had 7.76 tonnes of withdrawal from the GLD today and this physical gold landed in Shanghai/Inventory 763.49 tonnes
March 16/2015 / no change from Friday/Inventory at 750.67 tonnes
inventory: 750.67 tonnes.
The registered vaults at the GLD will eventually become a crime scene as real physical gold departs for eastern shores leaving behind paper obligations to the remaining shareholders. There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat (same banks).
GLD : 750.67 tonnes.
end
And now for silver (SLV):
March 16/no change in silver inventory/327.332 million oz
March 13.2015: no change in silver inventory/327.332 million oz
March 12: no changes in silver inventory/327.332 million oz
March 11/no changes in silver inventory/327.332 million oz
March 10/ no change in silver inventory/327.332 million oz
March 9/ no change in silver inventory at the SLV/327.332 million oz
March 6: huge addition of 1.34 million oz of silver into the SLV/Inventory 727.332 million oz
March 5 no change in inventory/725.992 million oz
March 4 a slight reduction of 126,000 oz of silver/SLV inventory at 725.992 (probably to pay for fees)
March 3 a small deposit of 328,000 oz of silver into the SLV/Inventory at 726.118 million oz.
March 2/ no change in silver inventory tonight; 725.734 million oz
Feb 27.2015 no change in silver inventory tonight: 725.734 million oz
Feb 26. no change in silver inventory at the SLV/Inventory at 725.734 million oz
Feb 25. no changes in silver inventory/SLV inventory at 725.734 million oz
March 16/2015 no change in silver inventory at the SLV/ SLV inventory rests tonight at 327.332 million oz
end
And now for our premiums to NAV for the funds I follow:
Note: Sprott silver fund now for the first time into the negative to NAV
Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)
Not available tonight
1. Central Fund of Canada: traded at Negative 7.9% percent to NAV in usa funds and Negative 7.9% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.6%
Percentage of fund in silver:37.9%
cash .5%
( March 16/2015)
Sprott gold fund finally rising in NAV
2. Sprott silver fund (PSLV): Premium to NAV rises to + 1.71%!!!!! NAV (March 16/2015)
3. Sprott gold fund (PHYS): premium to NAV rises to +.02% to NAV(March 16 /2015)
Note: Sprott silver trust back into positive territory at +1.26%.
Sprott physical gold trust is back into positive territory at +.02%
Central fund of Canada’s is still in jail.
end
And now for your more important physical gold/silver stories:
Gold and silver trading early this morning
(courtesy Mark O’Byrne)
Irish Finance Minister Dumps Stocks to Buy Gold
By Mark O’Byrne March 16, 2015 0 Comments
Share on facebook Share on twitter Share on linkedin More Sharing Services
- Ireland’s Minister of Finance shifted personal wealth out of stocks and into gold
- Minister invested in SPDR Gold Shares ETF, Portuguese government bonds and other ETFs
- Maintained holdings in bank and agricultural commodities ETFs
- Gold ETF not a safe haven asset – much unappreciated counterparty risk
The Minister for Finance in Ireland, Michael Noonan, sold his shares in funds that track European and US stocks and diversified his portfolio including allocating some of his personal wealth into a gold exchange traded fund (ETF) in 2014.
Noonan sold out of his positions in the Lyxor Eurostoxx 50 ETF and SPDR DJIA ETF in 2014 and opted to invest in the SPDR gold shares ETF and Portuguese government bonds. He maintained his holdings in SPDR KBW Banks ETF, Ishares FTSE 100 ETF, Market Vectors Agri Business ETF, ETFS Agricultural Commodities ETF.
The information was published last week in the Register of Members Interests, in which members of Oireachtas – the Irish Parliament – must declare financial interests valued at over €13,000.
The changes to the Minister’s portfolio were highlighted by Ireland’s Sunday Independent yesterday, who described Noonan as “bearish” and interpreted the move as a “hedge against euro deflation”.
The piece acknowledged that gold is a safe haven – the “traditional hedge against tough times” and that “gold is an asset that has outperformed in times of both inflation and deflation.”
Noonan is believed to be quite a shrewed investor. The Sunday Independent reported that
“Noonan’s personal investments give an insight into his thinking and his views on the risk and opportunities facing the global and European economies and markets. He has a track record stretching back decades of canny private investments.”
The news is of interest given Noonan’s status within the Eurogroup of Finance Ministers, the Council of the European Union and the Ecofin. The Economic and Financial Affairs Council (Ecofin), is composed of the Economics and Finance Ministers of the Member States, generally meets once a month under the chair of the rotating EU Presidency.
Noonan is an EU economic insider and would have access to good information with regards to financial and economic developments in Europe.
Noonan represents Ireland at these meetings and chaired the Council during the first half of 2013. He is committed to the European political project. The political opposition and an angry public have accused him of putting the interests of EU banks and political elites over those of Irish society.
Given Noonan is close to EU elites, it is interesting that he chose to sell his European stocks and his allocation to Eurostoxx. Was the decision made prior to the ECB mooting the possibility of QE? If so it would suggest that Noonan may have been concerned about deflation. And yet the ECB never considered factoring the potential for deflation into its stress tests for banks.
Or was the decision made with knowledge of the ECB’s intention? If this were so it would indicate a lack of faith by a European finance minister in the ability of the ECB to achieve its stated objectives, given that QE should raise European stock markets.
Unfortunately, the Register of Members Interests does not detail the timeline of investments or their relative value so it is difficult to speculate whether the minister dumped his stock market investments prior to buying the gold ETF.
Noonan also bought Portugal 4.35% October 2017 government bonds. This either suggests that he has more confidence in the economic outlook for Portugal than for Ireland or more likely it is a form of diversification.
He continues to hold SPDR KBW US Banks ETF – which tracks US banks, iShares FTSE 100 ETF, Market Vectors Agribusiness ETF and ETFS Agricultural Commodities ETF.
Whatever the motivation of a European finance minister to buy into a gold ETF – which, incidentally, is not the same as owning physical gold as it carries significant counterparty risk – it represents a significant shift in attitude toward gold.
It also demonstrates that the recovery narrative is not one that the Minister appears to have much faith in. Noonan is prudently hedging his bets in this regard.
We advise readers and clients to do as the Minister has done and prudently hedge the many risks of today by diversifying into gold – not paper gold but physical gold. The gold ETF is not a safe haven asset rather it is a derivative that tracks the price of gold and in which one does not have legal title to or own the underlying asset.
Download: Comprehensive Guide To Investing In Gold
MARKET UPDATE
Today’s AM fix was USD 1,157.00, EUR 1,097.67 and GBP 782.13 per ounce.
Friday’s AM fix was USD 1,156.50, EUR 1,091.24 and GBP 779.58 per ounce.
Gold climbed 0.17% percent or $1.90 and closed at $1,155.20 an ounce Friday, while silver remained unchanged at $15.57 an ounce. Gold and silver both traded down for the week at 0.90 percent and 1.89 percent.
In Singapore, bullion for immediate delivery ticked lower and then higher and was up 0.3 percent to $1,162.50 an ounce near the end of day trading.
Gold hovered at its lowest in nearly three months today pressured by the still strong U.S. dollar. The two day U.S. Federal Reserve policy meeting starting Tuesday, may hint at the timing of any hike in U.S. interest rates.
Bearish sentiment continued as holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell to 750.67 tonnes down 0.28 tonnes on Friday – the lowest since late January.
Asians continue to buy physical bullion on dips in price and premiums on the Shanghai Gold Exchange were about $5-$6 an ounce above the global benchmark, even stronger than Friday’s premiums.
In Ireland, in late morning trading gold is trading at $1,157.03 or off 0.09 percent. Silver is at $15.64 or up 0.15 percent and platinum is $1,115.32 or up 0.03 percent
end
During the first week of March a huge 45 tonnes of gold was demanded in China. This gold leaves the SGE vaults and with the expert analysis of Koos Jansen, equals gold demand in China. We would also like to point out that this gold demanded excludes any sovereign gold purchases from mainland China. We are on tap for demand of 550 tonnes this quarter. By talking mining and scrap away from the figures, China imported 340 tonnes of gold which is huge.
The 45 tonnes of gold demanded by China works out to 6.4 tonnes of gold.The world produces 6.02 tonnes of gold ex China ex Russia. Thus these guys are purchasing over 100% of annual global production.
(I subtract out China and Russia gold production because no gold is allowed to leave their respective countries)
(courtesy Koos Jansen)
Posted on 14 Mar 2015 by Koos Jansen
SGE Withdrawals 45t Week 9, YTD 456t
Chinese wholesale gold demand, that equals withdrawals from the vaults of the Shanghai Gold Exchange (SGE),accounted for 45 metric tonnes in week 9 of 2015 (March 2 – 6). Year to date 456 tonnes have been withdrawn from the SGE vaults. An estimate suggests 340 tonnes has been net imported into the Chinese domestic gold marketover this period (calculating with a yearly SGE scrap rate of 250 tonnes).
Since the inception of the Shanghai International Gold Exchange (SGEI) there was a possibility the significance of SGE withdrawals, as published in the Chinese weekly reports, became distorted by activity on the SGEI – in the Free Trade Zone. That’s why I corrected SGE withdrawals by trading volume from the SGEI, just to be on the safe side of measuring Chinese wholesale demand.
However, we just learned that what was traded and withdrawn on the SGEI in 2014 was primarily imported into the Chinese domestic gold market. So, for the time being we can assume SGE withdrawals are still an accurate proxy for Chinese wholesale demand – a metric described in this post.
I like to note SGEI trading volume has jumped recently, reaching a record in week 9 at 34 tonnes (counted unilaterally). Perhaps this is exchange is slowly coming to life.
Only the 1kg physical contract iAu99.99 is traded on the International Board (SGEI), there seems to be nil interest in the 100 gram physical contract iAu100 and in the 12.5kg (London Good Delivery bars) contract iAu995.
Overall SGE volume is somewhat dropping as the spot deferred contracts Au(T+N1) and Au(T+N2) are falling back after a resurrection that started late November 2014.
On the Shanghai Futures Exchange (SHFE) we can see the same trend; slightly dropping volumes. Nothing “worth mentioning”.
Koos Jansen
E-mail Koos Jansen on: koos.jansen@bullionstar.com
end
Chris Powell comments on the above Koos Jansen story.
Chris uses 2800 tonnes per year of annual production which includes Russia and China.
(courtesy Chris Powell/GATA)
China seems to be claiming 88 percent of world gold mine production
Submitted by cpowell on Sun, 2015-03-15 04:26. Section: Daily Dispatches
11:31a ICT Sunday, March 15, 2015
Dear Friend of GATA and Gold:
Bullion Star market analyst and GATA consultant Koos Jansen reports today that the international division of the Shanghai Gold Exchange is not moving gold out of China but rather supplementing the country’s gold imports. As a result, Jansen writes, withdrawals from the Shanghai Gold Exchange remain a good proxy for China’s domestic gold demand, and 456 tonnes have been withdrawn this year through March 6.
If annual gold mine production is around 2,800 tonnes and monthly mine production averages 233 tonnes and weekly production averages 54 tonnes, the Shanghai figures suggest that, as Jansen’s chart shows, Chinese demand is running at about 47 tonnes per week, or about 88 percent of world mine production.
Of course gold possession is not static; the metal doesn’t disappear but rather is always available to the market at the right price. People and institutions throughout the world may be selling even as China may be buying. But that a single nation has started to buy so much relative to mine production suggests that inventories elsewhere are getting drawn down.
The obvious place to look for such inventories would be those central banks that purport to be major gold holders and that may be swapping and leasing gold for currency market management purposes:
http://www.gata.org/node/12016
Fortunately for those central banks, the first principle of gold market analysis by mainstream financial news organizations and financial letter writers is never to put a critical question to the biggest participants in the market even though those participants are governments that might owe some accountability to the people they govern.
That is, the mainstream offers no serious gold market analysis at all, just interpretation of the holograms that are disguised as market prices.
Jansen’s report is posted at Bullion Star here:
https://www.bullionstar.com/blogs/koos-jansen/sge-withdrawals-45t-week-9…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Nothing but kickback money to the USA government:
(courtesy GATA/Bloomberg)
U.S. seeks billions from global banks in currency manipulation settlement
Submitted by cpowell on Sat, 2015-03-14 02:33. Section: Daily Dispatches
That is: Nobody rigs our markets but us.
* * *
By Keri Geiger and Greg Farrell
Bloomberg News
Friday, March 13, 2015
NEW YORK — The U.S. Justice Department is seeking about $1 billion each from global banks being investigated for manipulation of currency markets, according to two people familiar with the talks.
The figure is a starting point in settlement discussions, with some banks being asked for more and some less than $1 billion. One bank that has cooperated from the beginning is expected to pay far less, one of the people said. Penalties of about $4 billion are on the table, according to one of the people, though the number could change markedly.
Banks are pushing back harder than in some previous negotiations, including those for mortgage-backed securities, and the final penalties could be lower, people close to the talks said. …
… For the remainder of the report:
http://www.bloomberg.com/news/articles/2015-03-13/u-s-said-to-start-at-1…
end
unbelievable!!
(courtesy zero hedge)
ICE Futures Broke Law “Thousands” Of Times In 20 Months, CFTC Fines Exchange 0.75% Of 2015 Revenues
From October 2012 to May 2014, the CFTC found that ICE Futures exchange submitted reports and data containing errors and omissions on every reporting day, with cumulative inaccuracies totaling in the thousands. The CFTC stated unequivocally that, those “who fail to meet their reporting obligations will be held accountable,” and required ICE to pay a $3 million civil monetary penalty. With expectations of over $4 billion in revenues for FY 2015, the $3 million fine represents just 0.75% of the exchange’s income… that will teach them!!!
Full CFTC Statement:
CFTC Orders ICE Futures U.S., Inc. to Pay a $3 Million Civil Monetary Penalty for Recurring Data Reporting Violations
The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against ICE Futures U.S., Inc. (ICE), a designated contract market (DCM), forsubmitting inaccurate and incomplete reports and data to the CFTC over at least a 20-month period, from at least October 2012 through at least May 2014.
According to the CFTC Order, on every reporting day during the period above, ICE submitted reports and data containing errors and omissions, with cumulative inaccuracies totaling in the thousands.The Order further finds that CFTC staff repeatedly notified ICE of the problems with its reports and data and requested that ICE take action to correct the mistakes, but that ICE continued to submit inaccurate reports and data. The Order requires ICE to pay a $3 million civil monetary penalty and to comply with undertakings aimed at improving its regulatory reporting.
CFTC Director of Enforcement Aitan Goelman commented: “The CFTC cannot carry out its vital mission of protecting market participants and ensuring market integrity without correct and complete reporting by registrants, including DCMs. Today’s action makes clear that registrants who fail to meet their reporting obligations will be held accountable and that the CFTC takes a particularly dim view of reporting violations that continue over many months, especially after CFTC staff has repeatedly alerted the registrant in question to the problems in its reporting.”
Pursuant to Part 16 of the CFTC Regulations, a DCM is required to submit certain trading and market-related reports and data to the CFTC. In particular, a DCM is required to submit, for each business day, clearing member reports showing certain information for each future or option contract, including, among other things, the quantity of contracts currently open, the quantity of contracts bought and sold throughout the day, and the quantity of delivery notices. A DCM is also required to provide the CFTC with permanent record data relating to trading volume, open contracts, prices, and certain critical dates, and transaction-level trade data and related order information for each futures or options contract.
The Order specifically finds that, beginning in at least October 2012, CFTC staff notified ICE about its data and reporting errors, which included incorrect clearing member reports, permanent record data, and transaction-level trade data. ICE responded that these errors resulted primarily from technology upgrades and data migration projects, and while they affected data provided to the CFTC, they did not affect data published by ICE on its website. ICE further assured CFTC staff that its data-reporting problems would be fixed with the conversion to a new data-reporting format. CFTC staff informed ICE that continuing to report faulty data in the interim was unacceptable. Nevertheless, ICE continued to submit inaccurate and incomplete reports.
Further, ICE did not respond in a timely and satisfactory manner to inquiries from CFTC staff from multiple divisions about these data-reporting issues, including initial inquiries from the Division of Enforcement. Eventually, ICE did cooperate fully with the investigation and took effective corrective actions to address its reporting deficiencies. The CFTC has taken that cooperation and those actions into account in settling this matter.
In addition to imposing the $3 million civil monetary penalty, the CFTC ordered ICE to comply with undertakings to improve its regulatory reporting. For instance, ICE must create and maintain a new senior position of Chief Data Officer, who will have direct responsibility for systems and procedures relating to regulatory reporting, and ICE must hire and maintain at least three additional quality assurance staff who will be dedicated to regulatory reporting. ICE also must undertake certain data-reconciliation efforts, including reviewing certain prior data submissions to the CFTC to identify further violations of the charged CFTC Regulations and, beginning 120 days from the date of the Order, endeavoring to reconcile data provided to the CFTC with data published on its website, as well as with other data existing within ICE’s systems and its clearing providers’ systems. Additionally, ICE must correct any errors or omissions in data provided to the CFTC pursuant to Part 16 of the CFTC Regulations within one week of discovery or notification of the errors or omissions, or, in the event such corrections will take more than a week’s time, reporting to the CFTC why additional time will be necessary.
The CFTC Division of Enforcement staff members responsible for this matter are Margaret Aisenbrey, Allison Sizemore, Jeff Le Riche, and Charles Marvine, with assistance from the CFTC Division of Market Oversight staff Kelly Beck, Matthew Hunter, Harry Hild, and Anthony Saldukas and the CFTC Office of Data and Technology staff Regina Sanders, Margie Sweet, Rene Garcia, and Ed Wehner.
* * *
And don’t do it again…
end
A terrific article from Chris Hamilton. China has stopped buying USA
treasuries. Has sovereign China purchased gold from USA vaults?
(courtesy Chris Hamilton/SRSRocco)
China Sells U.S. Treasuries, Yields Collapse…. China Buys Gold, Prices Collapse…. “Markets” At Work??
(By Chris Hamilton)
China, the largest buyer of US Treasury’s ceases buying Treasury’s…and US Treasury yields collapse?!? The Chinese (and others) buy record amounts of gold and create an imbalance of demand over available supply…and prices collapse?!? These are clearly not the actions of a market attempting to find a balance between price, supply, and demand.
July ’11 to December of ’14, China decreased its holdings of US Treasury debt by $71 Billion (according to the most recent TIC data)…while China continued to run record trade surplus’ with the US. China took in excess of a trillion new dollars since August of 2011 through 2014 and simultaneously sold or rolled off $71 Billion in US Treasury holdings…so China had to find a home for nearly $1.1 trillion new dollars. The chart below highlights China’s annual trade surplus with the US, annual Treasury purchases, and total Treasury holdings.
(Source: US Census, Trade, Source, Treasury, TIC report)
From ’00 to ’11, China had (on average) recycled 50% of its trade surplus dollar reserves into Treasury’s. However, as noted above, China has been a net seller since July ’11…why is this date important? It was the month of the US debt ceiling fiasco…and the date when China’s purported gold purchase binge began. It’s also August ’11 that gold hit its peak price and has fallen since. I don’t think these happenings were a coincidence.
Since we know China didn’t buy Treasurys over this period, perhaps we should speculate what those new dollars would do if focused on gold purchases?!? If China rotated the 50% of surplus dollars it had been utilizing to buy Treasurys and instead bought Gold…at an average of say $1500 an ounce since August ’11…that would buy China 10,000 tons of gold by year end 2014. Hmmm…Implications abound.
According to the World Gold Council (WGC), China’s gold demand rose from 300 metric tons up to 1300 metric tons in 2013 and about 1200/mt as of 2014. This is important as WGC reporting nets all newly produced global mine supply, global recycled scrap, and (based on the above WGC data on Chinese demand) denotes that the gold market is in balance between global supply and global demand. However, based on the data from the Shanghai Gold Exchange (SGE), the central clearing house for all Chinese gold purchasing, China’s demand is far greater (the chart below highlights the discrepancy). But if the data from SGE is correct, then where did all the additional gold come from and why did the price collapse on record demand? The answer is almost certainly, the gold was imported from someone else’s inventories willing to sell something of great value at low prices. But according to the SGE data, the Chinese demand was about 2,700 metric tons greater than global available WGC available supply since July 2011 (3.5 years) or about 771 tons annually. In the prior 3.5 years, the WGC and SGE had only diverged by about 600 metric tons or a 171 ton differential annually. So, China had massive dollar reserves not utilized to buy Treasury’s and someone sold a lot of gold to China and in the process drew down their own inventories as the demand was far greater than mining supply!
Who would have this massive amount of gold in inventory (and willingly sell it at significantly lower prices) and why would the price of gold collapse on this clear imbalance in demand over supply? Most sources of potential inventory are audited on a regular basis and this draw-down would be quite noticeable. Of course, the greatest source of gold holdings are collectively held by the Federal Reserve and the US Federal government…and this is not openly audited.
Some questions spring to mind!
From ’08-’09, could China and the US agreed to perform the thousands of years old activity of recycling excess currency, officially purchasing US Treasurys, but quietly and in secret being paid in some sort of gold arrangement? This would certainly serve both parties nicely allowing US deficit spending in an economic downturn without spiking interest rates. China for it’s part would continue its export driven economic miracle.
China increased its holdings of US Treasury debt from $65 billion in ’00 to $1,315 billion ($1.3 Trillion) in July of ’11…and in particular, from ’08 to July ’11, China increased its Treasury holdings by $588 billion while the US ran massive budget deficits flooding the Treasury market with new supply…and China’s trade surplus with the US ebbed on lower US consumer demand during the ’08 through ’11 economic slowdown (said more plainly, China bought more when they had less with which to make those purchases).
Since July ’11 China has net sold $71 billion in US Treasury debt on record dollar trade surplus in excess of a trillion dollars.
China as of July ’11 suddenly changed course with their dollar surplus even as their trade surplus with the US reached new records annually over ’12-’14? Did China suddenly decide gold was valuable and begin buying in the open market? My guess is China believed gold was of value all along but once the gold was no longer available (perhaps the US ran out or simply determined, like Nixon in ’71 (who watched almost 60% of US gold depart in the prior decade) that closing the gold arrangement, was essential to save whatever gold reserves the US had left).
Put it all together…China, the largest buyer of US Treasury’s ceases buying Treasury’s…and US Treasury yields collapse?!? The Chinese (and others) buy record amounts of gold and create an imbalance of demand over available supply…and prices collapse?!? These are clearly not the actions of a market attempting to find a balance between price, supply, and demand.
Of course I can’t prove that China did purchase any amount of gold. The Chinese authorities haven’t made any updates since 2009 when they last made public a 600 ton increase (to their then official holdings of 454 tons) to the current official Chinese gold reserve of 1054.1 tons. What I can say is Russia, which likewise has a large dollar trade surplus and likewise to China has been reducing its Treasury exposure since August of 2011…has been busily and openly adding to its gold reserves, now up to 1153.3 tons. Then again, I (nor the US government?) can’t prove the US truly has 8133.5 tons. Or the Germans 3384.2 tons or Italians 2451.8 tons. Still waiting on those open and transparent audits.
All I can say is the above math regarding China’s dollar hoard would nicely support what is visible in the chart below and also support those that claim Chinese gold buying and gold reserves are far larger than advertised.
This article was written by Chris Hamilton at the econimica.blogspot.com.
Please check back for new articles and updates at the SRSrocco Report.
end
(courtesy Bill Holter/Miles Franklin)
A vote for peace … A vote for truth!”
The biggest news last week and for the year so far, pertains to the SWIFT clearing system and what they just did. The U.S. has been pushing to kick Russia out which would certainly hamper their ability to do business internationally. The idea was to isolate Russia and box their trade in. This action has been at the top of the list for the U.S. in their move to press more and more financial and trade sanctions on Russia. It just backfired and may even boomerang. Not only did SWIFT not isolate and kick Russia out, they are giving Russia one of their 25 board seats! You may or already probably know this news, I believe the world has now made and about face and we may now have a glimmer of hope for the world at large. I will call this “a vote for peace, a vote for truth”, let me explain.
First and most importantly, the vote is not just a “no vote” to isolating Russia, I view it more as a “no vote” and against the United States dollar hegemony. The U.S. has during our entire lifetimes “run and ruled the world”. Whatever the U.S. says, goes. This mentality has obviously been even more forceful in recent years as the U.S. has sent military all over the world to enforce their desires. Many of these operations have been seen by foreigners as unjust and discovered later (Iraq for example) to have been forwarded by false intelligence or even outright lies. Not much was said because who really had the power to dissent? China and Russia 15 years ago didn’t have the military or financial might to object. Our allies like Britain and Germany did not want to cross Uncle Sam, so they just “went along to get along”.
This is now changed. China is the largest creditor to the U.S., Russia has built her military and we have double crossed and in general alienated many of our long time allies. Think Israeli relations, German eavesdropping, pressure on Swiss banks etc.. Even the “special friendship” between the U.S. and Britain has been fractured badly as they just applied to become a charter member of the AIIB, http://shanghaiist.com/2015/03/13/britain-applies-join-china-backed-asia-bank-us-furious.php which aims to be a direct competitor with the U.S. led World Bank. This could never have even been dreamed of only five years ago. I don’t believe this decision was made by the Brits because of something or “some things” we have done. In my opinion, Great Britain has simply looked around and decided to “go with the winner”. We are talking more about U.S. weakness here, and even our strongest ally is moving away from us!
So how exactly does SWIFT giving a board seat to Russia translate into a vote for peace and a vote for truth? This is an action by the rest of the world saying a very loud “NO” to the United States. They have seen us stir up unrest and strive at every turn to start a war. Mr. Putin and Russia stepped in late 2013 to diffuse our attack on Syria. They have not reacted to sanctions and have not so far reacted to the U.S. led political coup in Ukraine. They have refused to be drawn in to what will become WWIII. I believe the world recognizes this and is rewarding Russia for her restraint. The “world” does not want a war, the U.S. does.
The U.S. “needs” a war, just as it did back in 2001 when the economy was deteriorating. War is obviously a bad thing but make no mistake, it is good for the real economy as long as the fighting is not done on your own soil. The U.S. also needs a war to retain “control” over various parts of the world where control is being lost, think the Middle East and energy regions. As you know, I also believe the U.S. needs “something to point at” as a reason or to blame for collapsing markets. I believe collapse is a 100% given but how would it “look” if it just happened out of the blue? A war would be perfect “cover” to explain why things went bad in our markets. The rest of the world knows this and in my opinion wants to take this away.
The rest of the world also knows that dollar hegemony is not in their favor in any way, shape, or form. They realize the U.S. has been importing real goods and paying for them with freely printed pieces of paper and electronic digits. The world desires “truth”. It desires real and true settlement of trade, as in “something real for something real”. The U.S. wants to continue with something for nothing in what is an obvious “never pay” model.
As mentioned above, Britain already sees the writing on the wall. There will be an alternative clearing system up and running by the Chinese by September. China will participate in the London gold fix and begin their own “pricing mechanism” beginning this Friday. China is also lobbying the IMF to include the yuan as a reserve currency http://thebricspost.com/china-imf-talks-underway-to-endorse-yuan-as-global-reserve-currency/#.VQXsTI0tHIU . Make no mistake, it is not just Britain who sees the writing on the wall, it is the entire world with the exception of a brain dead American population!
Before wrapping up there are a couple of other pieces to look at. Will Greece “pay” or arrange to borrow more so they can pay? I seriously doubt it and believe they will turn Eastward and accept some sort of offer by Russia and China which will be financial and include a gas pipeline through their country. The other one to look at is Germany. Will they continue to go along with U.S. wishes? I don’t think so. They can see as well as anyone else and they are (and have been) natural trading partners with Russia. They also get 30%+ of their natural gas from Russia, when push comes to shove, the people will want to stay warm and the industrialist will want their factories to continue to operate. Do not be surprised if Germany somehow forms cozier relations with both Russia and China while U.S. relations wane.
To me, what just happened is obvious. SWIFT (the world) has slapped the U.S. in the face and said we do not want war and we do want true and fair business dealings. Call me crazy but if the U.S. isn’t careful, we may end up as being isolated and kicked out of SWIFT and in the exact position we wanted to put Russia in. I am not saying this is something that could happen tomorrow but it is a possibility and could be used as punishment for our bad actions. Obviously this is way more important than a schoolyard pecking order but it can be compared. Just as the school bully alienates more and more schoolmates and even beats a few of them up, he loses favor and fr