* Two failed banks in Missouri, one in Kansas *Largest of 3 had $1.18 bln assets, $1.03 bln deposits
WASHINGTON, Oct 15 (Reuters) - Three more U.S. banks were closed by regulators on Friday, bringing to 132 the total number of banks to fail so far this year.
The Federal Deposit Insurance Corp said Premier Bank of Jefferson City, Missouri, Security Savings Bank, F.S.B. of Olathe, Kansas, and WestBridge Bank and Trust Co of Chesterfield, Missouri, were closed.
And let us begin with today's events.
The total gold comex OI closed down by a very tiny 1924 contracts to rest tonight at 636,359. This is basis Friday, the day of the huge
raid. To lose only 1924 contracts must be causing our bankers severe headaches as they seek advice from their friendly pharmacists on the frequency of their
migraine attacks.
Herein lies the data for the gold comex:
estimated volume on Friday...get a load of this 402,530 with no switches. (normal volume is around 90,000)
This is why the bankers are having nightmares. They threw the kitchen sink with stampeding elephants to boot and they still could not shake the leaves from the tree.
This is very scary!!
Tomorrow will be very interesting..do they attempt another raid or retreat to higher ground? I think that the latter is in store for us.
Now for the silver comex:
the December Oi dropped marginally to 99,153 contracts.
The front delivery month of Oct increased their OI to 12
the volume estimated today is 57036.
and please get a load of this: total volume on Friday was a monstrous 129,123 contracts approx 250% higher than normal trading volumes.
I cannot give you the charts due to the comex refusing to download notices. However I can give you other data that I normally report on:
In gold;
The comex reports that one dealer received 8100 0z of gold.
There were no withdrawals.
There was one adjustment of 289 oz where this gold was leased to a dealer from a customer and this no doubt will satisfy 3 OI notices.
As mentioned the comex did not download the notices to deliver tonight. They are still stuck on Friday's number.
In silver:
One customer received 1090 oz of silver.
The withdrawals were plentiful: there were 4 individual customers removing their silver:
Interestingly a dealer also got scared and removed 9908 oz of silver and this did not find its way into a comex silver customer vault.
Again, the comex did not send down data as to the number of notices served upon our longs.
The premiums to NAV for the central fund of canada basis Friday retreated by a tiny fraction. For the weekend it rested at a positive premium to NAV of
6.1%. The PHYS however saw its premium rise to 3.45% from 2.97%.
Strangely our GLD (basis Friday) lost .2.43 tonnes of gold, after adding 19 tonnes on Thursday.
This vehicle is nothing but a fraud.
from John Brimelow:
Here is the big story as far as physical gold is concerned. The sleeping giant South Korea has decided that they better load up on gold:
South Korean central bank looks to gold By Christian Oliver and Song Jung-a in Seoul and Jack Farchy in London Published: October 18 2010 10:24 | Last updated: October 18 2010 16:13
South Korea, holder of the world’s fifth-biggest foreign exchange reserves, is considering buying gold to diversify its dollar-heavy portfolio, the country’s central bank said, adding it would be cautious in making any final decision.
Even a small realignment of South Korea’s reserves would have a powerfully bullish effect on the gold market. With just 14 tonnes of gold – or 0.2 per cent of its $290bn reserves – Seoul is one of the smallest holders of gold among large economies. The world average is 10 per cent, according to the World Gold Council, while countries such as the US, Germany and France hold well over 50 per cent of their reserves in gold.
Kim Choong-soo, governor of South Korea’s central bank, told a parliamentary committee on Monday that Seoul would have to tread carefully because of record gold prices and market volatility. “We need to give careful consideration to the matter of increasing gold volumes in the foreign reserves,” he said.
Nonetheless, his statement marks the first time the possibility of buying bullion has been seriously discussed in public by the Bank of Korea, which has in the past been dismissive of gold.
It comes as other Asian countries including China, India, Thailand and Bangladesh are stocking up on gold amid concerns that an escalating global currency war and a fresh round of quantitative easing in the US will drive the value of the dollar lower. South Korea holds 63 per cent of its reserves in dollars.
With emerging market countries buying and central banks in Europe halting their sales of bullion, central banks are set to become net buyers of gold this year for the first time since 1988, according to GFMS, a precious metals consultancy. That shift helped drive prices to a new nominal record of $1,387.10 a troy ounce on Thursday, up 27 per cent since the start of the year.
Now for the important economic stories of the day:
This is one figure that Obama did not want to see:
Production in U.S. Unexpectedly Falls for First Time in a Year By Courtney Schlisserman and Bob Willis – Oct 18, 2010 8:53 AM PT
Production in the U.S. unexpectedly dropped in September for the first time in more than a year, evidence of the slowdown in growth that is concerning some Federal Reserve policy makers.
Output at factories, mines and utilities fell 0.2 percent, the first decline since the recession ended in June 2009, according to figures from the Fed today. Another report showed builders were less pessimistic than projected this month.
Slackening production means it will take longer for the economy to make a dent in the excess capacity that is containing prices and prompting Fed Chairman Ben S. Bernanke to consider additional monetary stimulus. Improving demand from overseas and gains in business investment indicate orders at manufacturers like Alcoa Inc. will not weaken much more.
“It’s just not the kind of pace we need to create jobs and make inroads into reducing unused capacity and reduce unemployment,” said John Ryding, chief economist at RDQ Economics LLC in New York. “It is encouraging to see a little more optimism on the housing side, which might mean the sector is starting to stabilize.”
Confidence among U.S. homebuilders rose in October to the highest level in four months, a sign residential construction is steadying near record lows, a report from the National Association of Home Builders/Wells Fargo also showed today.
end.
Here is another big story of the day..Fed President Evans of the Chicago Fed stated this today:
Federal Reserve urged to act on economy By Robin Harding in Washington Published: October 17 2010 22:37 | Last updated: October 17 2010 22:37
A senior member of the Federal Reserve has warned that the US economy is in a “liquidity trap” and signalled support for more action to boost the recovery.
Charles Evans, president of the Chicago Fed, said that “in my opinion, much more policy accommodation is appropriate today” because “the US economy is best described as being in a bona fide liquidity trap”, a point where ultra-low interest rates and high savings rates conspire to make monetary policy ineffective.
Speaking in Boston on Saturday, he said the Fed should consider using a temporary target for the level of prices instead of the rate of inflation in order to drag the economy out the trap by convincing businesses and consumers to stop saving and start investing and spending.
Such a move would be in addition to a fresh asset purchase programme, or quantitative easing, now under consideration.
“I think there are special circumstances when price-level targeting would be a helpful complement to our current and prospective strategies,” Mr Evans said.
end.
On the Mortgage fiasco, first we have this: (from the Jim Sinclair commentary)
The Second Leg Down of America’s Death Spiral TUESDAY, OCTOBER 12, 2010
I swear to God Almighty: Mortgage Backed Securities are America’s Herpes—the gift that keeps on oozing.
Last Friday, Bank of America announced that it was suspending all foreclosure proceedings, presumably until further notice. Other banks have already suspended foreclosures in a whole truckload of states. A nationwide moratorium on foreclosures might soon happen—which would be a big deal:Global Financial Crisis, Part II—Longer, Wider and Uncut.
But the mainstream media—surprise-surprise—has downplayed the whole shebang. They’re throwing terms out there into the ether, but devoid of context or explanation: “Robo-signings”, “foreclosure mills”, forged signatures, “double booking”, MERS—it’s confusing as all get-out.
So the mainstream media just mentions it casually—“and in other news tonight . . .”—like it’s no big deal: A couple-three lines, lots of complicated, unfamiliar terms, an attitude like it’s a brouhaha overpaperwork of all things!—and thenzappo-presto-change-o!: They’re showing video footage of a cute koala nursing in the arms of a San Diego zookeeper.
But even the koalas know that something awful is heading America’s way. Smart little critters, they’re heading for the treetops, to get away from this mess.
So what the hell is going on with the God forsaken mortgage mess in the United States?
It’s got a lot of bells and whistles, but it’s basically quite simple: It’s all about the fucking Mortgage Backed Securities (MBS). Again.
then we heard tonight on CNBC that Bank of America was going to restart the foreclosure process!!
There are two videos that I would like to bring to your attention on the foreclosure mess:
1. the first one has to do with the ratings agencies and how they committed fraud on on the Mortgaged backed securities they were rating:
http://www.youtube.com/watch?v=O3JTPzW3xmg&feature=player_embedded
2.www.youtube.com/watch?v=1EF1sPx2Ni8&feature=player_embedded
here you see how a family who were foreclosed upon, hacksawed the locks and re-entered their foreclosed home.
You will see that the bankers just made up numbers. They had no idea what was owed on the property.
I urge you to watch both videos as you will get a sense of what is happening in America tonight.
Also I received this commentary from J. Mauldin and it contains another wonderful summary of the fraud and why it happened.
I will highlight the entire passage for you: I would like to thank Ross Pellegrino and Ron Kapan for sending me this article.
Homeowners can only be foreclosed and evicted from their homes by the person or institution who actually has the loan paper—only the note-holder has legal standing to ask a court to foreclose and evict. Not the mortgage, the note, which is the actual IOU that people sign, promising to pay back the mortgage loan.Before mortgage-backed securities, most mortgage loans were issued by the local savings & loan. So the note usually didn’t go anywhere: it stayed in the offices of the S&L down the street.But once mortgage loan securitization happened, things got sloppy—they got sloppy by the very nature of mortgage-backed securities.The whole purpose of MBSs was for different investors to have their different risk appetites satiated with different bonds. Some bond customers wanted super-safe bonds with low returns, some others wanted riskier bonds with correspondingly higher rates of return.
Therefore, as everyone knows, the loans were “bundled” into REMIC’s (Real-Estate Mortgage Investment Conduits, a special vehicle designed to hold the loans for tax purposes), and then “sliced & diced”—split up and put into tranches, according to their likelihood of default, their interest rates, and other characteristics.This slicing and dicing created “senior tranches,” where the loans would likely be paid in full, if the past history of mortgage loan statistics was to be believed. And it also created “junior tranches,” where the loans might well default, again according to past history and statistics. (A whole range of tranches was created, of course, but for the purposes of this discussion we can ignore all those countless other variations.) These various tranches were sold to different investors, according to their risk appetite. That’s why some of the MBS bonds were rated as safe as Treasury bonds, and others were rated by the ratings agencies as risky as junk bonds. But here’s the key issue: When an MBS was first created, all the mortgages were pristine—none had defaulted yet, because they were all brand-new loans. Statistically, some would default and some others would be paid back in full—but which ones specifically would default? No one knew, of course. If I toss a coin 1,000 times, statistically, 500 tosses the coin will land heads—but what will the result be of, say, the 723rd toss? No one knows.
Same with mortgages. So in fact, it wasn’t that the riskier loans were in junior tranches and the safer ones were in senior tranches: rather, all the loans were in the REMIC, and if and when a mortgage in a given bundle of mortgages defaulted, the junior tranche holders would take the losses first, and the senior tranche holder last.But who were the owners of the junior-tranche bond and the senior-tranche bonds? Two different people. Therefore, the mortgage note was not actually signed over to the bond holder. In fact, it couldn’t be signed over. Because, again, since no one knew which mortgage would default first, it was impossible to assign a specific mortgage to a specific bond.Therefore, how to make sure the safe mortgage loan stayed with the safe MBS tranche, and the risky and/or defaulting mortgage went to the riskier tranche?Enter stage right the famed MERS—the Mortgage Electronic Registration System.
MERS was the repository of these digitized mortgage notes that the banks originated from the actual mortgage loans signed by homebuyers. MERS was jointly owned by Fannie Mae and Freddie Mac (yes, those two again —I know, I know: like the chlamydia and the gonorrhea of the financial world—you cure ‘em, but they just keep coming back).The purpose of MERS was to help in the securitization process. Basically, MERS directed defaulting mortgages to the appropriate tranches of mortgage bonds. MERS was essentially where the digitized mortgage notes were sliced and diced and rearranged so as to create the mortgage-backed securities. Think of MERS as Dr. Frankenstein’s operating table, where the beast got put together.However, legally—and this is the important part—MERS didn’t hold any mortgage notes: the true owner of the mortgage notes should have been the REMICs.But the REMICs didn’t own the notes either, because of a fluke of the ratings agencies: the REMICs had to be “bankruptcy remote,” in order to get the precious ratings needed to peddle mortgage-backed Securities to institutional investors. So somewhere between the REMICs and MERS, the chain of title was broken.Now, what does “broken chain of title” mean? Simple: when a homebuyer signs a mortgage, the key document is the note. As I said before, it’s the actual IOU. In order for the mortgage note to be sold or transferred to someone else (and therefore turned into a mortgage-backed security), this document has to be physically endorsed to the next person. All of these signatures on the note are called the “chain of title.” You can endorse the note as many times as you please—but you have to have a clear chain of title right on the actual note: I sold the note to Moe, who sold it to Larry, who sold it to Curly, and all our notarized signatures are actually, physically, on the note, one after the other. If for whatever reason any of these signatures is skipped, then the chain of title is said to be broken. Therefore, legally, the mortgage note is no longer valid. That is, the person who took out the mortgage loan to pay for the house no longer owes the loan, because he no longer knows whom to pay. To repeat: if the chain of title of the note is broken, then the borrower no longer owes any money on the loan.Read that last sentence again, please. Don’t worry, I’ll wait. You read it again? Good: Now you see the can of worms that’s opening up. The broken chain of title might not have been an issue if there hadn’t been an unusual number of foreclosures. Before the housing bubble collapse, the people who defaulted on their mortgages wouldn’t have bothered to check to see that the paperwork was in order. But as everyone knows, following the housing collapse of 2007-’10-and-counting, there has been a boatload of foreclosures—and foreclosures on a lot of people who weren’t sloppy bums who skipped out on their mortgage payments, but smart and cautious people who got squeezed by circumstances. These people started contesting their foreclosures and evictions, and so started looking into the chain-of-title issue, and that’s when the paperwork became important. So the chain of title became crucial and the botched paperwork became a nontrivial issue. Now, the banks had hired “foreclosure mills”—law firms that specialized in foreclosures—in order to handle the massive volume of foreclosures and evictions that occurred because of the housing crisis. The foreclosure mills, as one would expect, were the first to spot the broken chain of titles. Well, what do you know, it turns out that these foreclosure mills might have faked and falsified documentation, so as to fraudulently repair the chain-of-title issue, thereby “proving” that the banks had judicial standing to foreclose on delinquent mortgages. These foreclosure mills might have even forged the loan note itself—Wait, why am I hedging? The foreclosure mills did actually, deliberately, and categorically fake and falsify documents, in order to expedite these foreclosures and evictions. Yves Smith at Naked Capitalism, who has been all over this story, put up a price list for this “service” from a company called DocX—yes, a price list for forged documents. Talk about your one-stop shopping! So in other words, a massive fraud was carried out, with the inevitable innocent bystanders getting caught up in the fraud: the guy who got foreclosed and evicted from his home in Florida, even though he didn’t actually have a mortgage, and in fact owned his house free –and clear. The family that was foreclosed and evicted, even though they had a perfect mortgage payment record. Et cetera, depressing et cetera.Now, the reason this all came to light is not because too many people were getting screwed by the banks or the government or someone with some power saw what was going on and decided to put a stop to it—that would have been nice, to see a shining knight in armor, riding on a white horse. But that’s not how America works nowadays. No, alarm bells started going off when the title insurance companies started to refuse to insure the titles. In every sale, a title insurance company insures that the title is free –and clear —that the prospective buyer is in fact buying a properly vetted house, with its title issues all in order. Title insurance companies stopped providing their service because—of course—they didn’t want to expose themselves to the risk that the chain –of title had been broken, and that the bank had illegally foreclosed on the previous owner.That’s when things started getting interesting: that’s when the attorneys general of various states started snooping around and making noises (elections are coming up, after all).The fact that Ally Financial (formerly GMAC), JP Morgan Chase, and now Bank of America have suspended foreclosures signals that this is a serious problem—obviously. Banks that size, with that much exposure to foreclosed properties, don’t suspend foreclosures just because they’re good corporate citizens who want to do the right thing, and who have all their paperwork in strict order—they’re halting their foreclosures for a reason. The move by the United States Congress last week, to sneak by the Interstate Recognition of Notarizations Act? That was all the banking lobby. They wanted to shove down that law, so that their foreclosure mills’ forged and fraudulent documents would not be scrutinized by out-of-state judges. (The spineless cowards in the Senate carried out their master’s will by a voice vote—so that there would be no registry of who had voted for it, and therefore no accountability.)
And President Obama’s pocket veto of the measure? He had to veto it—if he’d signed it, there would have been political hell to pay, plus it would have been challenged almost immediately, and likely overturned as unconstitutional in short order. (But he didn’t have the gumption to come right out and veto it—he pocket vetoed it.) As soon as the White House announced the pocket veto—the very next day!—Bank of America halted all foreclosures, nationwide. Why do you think that happened? Because the banks are in trouble—again. Over the same thing as last time—the damned mortgage-backed securities! The reason the banks are in the tank again is, if they’ve been foreclosing on people they didn’t have the legal right to foreclose on, then those people have the right to get their houses back. And the people who bought those foreclosed houses from the bank might not actually own the houses they paid for. And it won’t matter if a particular case—or even most cases—were on the up –and up: It won’t matter if most of the foreclosures and evictions were truly due to the homeowner failing to pay his mortgage. The fraud committed by the foreclosure mills casts enough doubt that, now, all foreclosures come into question. Not only that, all mortgages come into question. People still haven’t figured out what all this means. But I’ll tell you: if enough mortgage-paying homeowners realize that they may be able to get out of their mortgage loans and keep their houses, scott-free? That’s basically a license to halt payments right now, thank you. That’s basically a license to tell the banks to take a hike. What are the banks going to do—try to foreclose and then evict you? Show me the paper, Mr. Banker, will be all you need to say. This is a major, major crisis. The Lehman bankruptcy could be a spring rain compared to this hurricane. And if this isn’t handled right—and handled right quick, in the next couple of weeks at the outside—this crisis could also spell the end of the mortgage business altogether. Of banking altogether. Hell, of civil society. What do you think happens in a country when the citizens realize they don’t need to pay their debts? end.
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