Jul 30, 2013
Moriarty can live with market manipulation; GATA chooses not to: GATA | THE GATA DISPATCH JULY 30, 2013.
Moriarty can live with market manipulation; GATA chooses not to
With commentary the other day headlined "Out of the Ashes" posted at his Internet site, 321Gold.com --
-- Bob Moriarty took some cracks at GATA that invite rebuttal even as he seems to be slowly advancing toward GATA's position and easing away his long insistence that nothing is amiss in the gold market.
Moriarty writes: "There has been an active subset of gold bugs working for almost 15 years now that has done a wonderful job of educating investors that the most important market force involves manipulation. This is in spite of the fact that not a single person in world history has ever made a cent off such a belief because even if it was the most important factor, it generates neither buy signals nor sell signals and as such is more clutter than signal."
But can Moriarty identify a more important force in the gold market than central banks, which play it both directly and through their agent, the Bank for International Settlements, trading gold, gold futures, and gold options around the clock? What is the purpose of central bank gold trading if not market manipulation? Indeed, a BIS official formally proclaimed in 2005 that manipulating the currency and gold markets is a primary objective of central banks:
Moriarty says no one "has ever made a cent" from believing in gold market manipulation. But central banks sure believe in it. They don't do it for charity. They do it to sustain the values of their currencies and government bonds, which are reciprocals of the gold price.
"Nowhere in the mass of verbiage," Moriarty continues, "is there ever any mention of corrections or markets going both up and down. So we have tens of thousands of investors conditioned to believe that markets are supposed to go up every single day and the only reason they ever go down is because they are being manipulated."
But that's not what GATA maintains. GATA maintains that the gold market is manipulated by Western central banks every day as they underwrite the fractional-reserve gold banking system. GATA maintains that gold might go up or down on its own in a free market and that when gold goes down it is more often because of central bank intervention.
"A sincere belief in manipulation has cost investors billions of dollars," Moriarty writes. "At tops they are giddy with a belief that the dirty rotten bastards on Wall Street are on the run and silver is about to pass gold in value. They never take profits at tops because no one ever told them it's perfectly natural that markets go down now and again. At bottoms they quiver in fear because something called a 'correction' has taken place and maybe silver isnt going to $200 next week. Why didn't someone warn us?"
Why didn't someone warn people? Huh? Warning people about central bank intervention against the monetary metals is what GATA has been doing for 14 years. Of course it is "perfectly natural that markets go down now and again," if markets are free. But was it "perfectly natural" on April 12 and 15 when what seems to have been a single entity dumped as much as 600 tonnes of paper gold on the market in the absence of any particular news relevant to gold?
Has Moriarty ever inquired of any central bank about its policy in the gold market and sought records of its gold trading, as GATA has done with some success? Or without ever having attempted such inquiry, is Moriarty simply confident that central banks do not participate in the gold market every day and that everything in the market must be "perfectly natural"?
But then Moriarty contradicts his insistence that what happens in the gold market is "perfectly natural." He writes: "All markets are manipulated. Live with it."
Maybe Moriarty can live with it; his business is stock promotion, where, after all, manipulation can be very profitable. But GATA finds manipulation of the gold market fraudulent and unjust on a cosmic scale and chooses not to live with it. GATA's business is to try to expose a fraud and right a wrong. That seems to be the essential disagreement here.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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July 30, 2013
Compiled 20:45 GMT
Compiled 20:45 GMT
By CHARLIE SAVAGE
While Pfc. Bradley Manning had already pleaded guilty to a lesser version of the charges he faced after leaking a vast archive of secret files to WikiLeaks, prosecutors pressed forward with a trial on more serious charges, including "aiding the enemy."
By THOM SHANKER
The twice-yearly assessment notes progress but says outside help for Afghan forces will be required long after the NATO-led mission ends at the end of 2014.
By KAREEM FAHIM and RICK GLADSTONE
Catherine Ashton's talks with Mohamed Morsi are the first time Mr. Morsi, the former Egyptian president, has met with an international diplomat since he was taken into military custody.
By JOB C. HENNING
Diverging interests simply do not support a new and productive strategic relationship at this time.
By MARK LANDLER
The Obama administration has prodded Egypt's generals to restore a democratic government while trying not to jeopardize any future influence on the military or undermine security arrangements.
By ISMAIL KHAN
More than 100 militants armed with rocket-propelled grenades and heavy arms blasted the prison walls, freeing 243 prisoners including 30 militants.
By SALMAN MASOOD and DECLAN WALSH
The legislators picked Mamnoon Hussain, a Karachi industrialist and the candidate of Prime Minister Nawaz Sharif's party, for the largely ceremonial post.
DealBook P.M. Edition July 30, 2013: JPMorgan Agrees to Pay $410 Million in Power Market Manipulation Case.
Wall Street at Close Report by MarketWatch July 30, 2013: U.S. stocks edge up, lead by technology sector.
NEW YORK (MarketWatch) — U.S. stocks ended slightly higher on Tuesday, with the Nasdaq Composite positioned for its best monthly performance since January 2012, as investors mostly adopted a cautious tone a day ahead of a monetary-policy decision from the Federal Reserve.
Of the 304 companies that have reported earnings results for the second quarter, 201 have beaten estimates, 76 have missed, and 27 have met, producing a a beat rate of 66%, above the historical average, according to research by Christine Short, an associate director S&P Capital IQ.
“Earnings so far are better than expected, but we haven’t seen much in the way of revenue figures,” said Robert Pavlik, chief market strategist at Banyan Partners LLC.
J.P. Morgan settles electricity case
What’s News: J.P. Morgan agrees to pay $410 million to regulators to settle allegations of electricity market manipulation. President Obama to offer ‘grand bargain’ on corporate taxes and jobs. Pfizer’s profits quadruple; Merck’s profits halved. All workers found after Florida plant blast. Joanne Po reports.
After a 72-point gain and a 43-point drop, the Dow Jones Industrial Average DJIA -0.0089% ended off 1.38 points at 15,520.59.
Pfizer Inc. PFE +0.44% rose 0.4% after the drug maker and Dow component posted second-quarter results.
The S&P 500 index SPX +0.04% advanced nearly 1 point to 1,685.96, with technology leading sector gains and telecommunications falling hardest.
The Nasdaq Composite COMP +0.48% climbed 17.33 points, or 0.5%, to 3,616.47, with the technology laden index up 6.3% for July, on track for its best monthly performance since January 2012.
Advancers pulled just ahead of decliners on the New York Stock Exchange, where almost 678 million shares traded. Composite volume neared 3.3 billion.
On Monday, composite volume on the Nyse came in just under 2.8 billion, the seventh lowest volume day so far this year.
Housing prices point upward
The solid housing recovery is supporting further gains in home prices, according to the Standard & Poor's/Case-Shiller report released Tuesday.
“People are a little skeptical here, there’s a pattern that is raising questions for the overall market, whether we can continue the trend of gains without any kind of give back,” said Pavlik, referring to a market that is up 18% for the year.
The dollar DXY +0.16% gained against the currencies of major U.S. trading partners and the yield on the benchmark 10-year note 10_YEAR +0.04% held flat at 2.604%.
Oil futures CLU3 -1.42% dropped $1.47, or 1.4%, to $103.08 a barrel and gold prices GCZ3 -0.24% declined $4.80, or 0.4%, to $1,325.80 an ounce on the New York Mercantile Exchange.
Community Heath Systems Inc. CYH -3.49% fell 3.5% after the for-profit hospital operator said it would buy competitor Health Management Associates Inc. HMA +0.23% for $3.9 billion. Shares of Health Management Associates slid nearly 11% after the company said it had received more subpoenas from regulators seeking information about its doctor relationships and some of its emergency-room operations.
J.P. Morgan Chase & Co. JPM -0.65% agreed to pay a $285 million penalty and disgorge $125 million to settle allegations of energy-market manipulation in California and the Midwest. Shares of the Dow component were off 0.7%.
Sprint Corp. S +7.32% rose 7.3% after the telecommunications firm posted a larger quarterly loss but revenue expanded as consumers spent more on mobile services.
Facebook Inc. FB +0.25% gained 6.2% after the social-networking company announced the launch of a mobile-games unit.
Pitney Bowes Inc. PBI +12.77% jumped nearly 13% after the supplier of postal meters and other equipment reached an agreement to sell its management-services unit to Apollo Global Management LLC APO -0.94% for about $400 million.
Goodyear Tire & Rubber Co. GT +8.92% jumped 8.9% after its second-quarter earnings beat expectations.
Aetna Inc. AET -0.71% shares shed 0.7% and Eastman Chemical Co. EMN +6.29% shares rallied 6.3% after both companies reported quarterly earnings that surpassed expectations.
Coach Inc. COH -7.87% retreated 7.9% after the maker of luxury handbags reported a drop in fiscal fourth-quarter profit.
Shares of Mosaic Co. MOS -17.28% declined 17% as the company and other fertilizer manufacturers were hit by price concerns that came with a dissolving partnership among the top potash producers.
The Federal Open Market Committee on Tuesday began a two-day session, with the central bank likely to hold its benchmark interest rate at 0.25%. Many strategists believe the central bank will begin curbing its monthly bond purchases in September.
Tuesday economic reports had the S&P/Case-Shiller index of property values rising 12.2% from May 2012 to last month, its largest 12-month rise in more than 13 years, showing continuing improvement in residential real estate.
Separately, the Conference Board’s consumer-confidence index fell to 80.3 in July from an upwardly revised five-year high of 82.1 the prior month.
Kate Gibson is a reporter for MarketWatch, based in New York. Victor Reklaitis is a New York-based markets writer for MarketWatch. Follow him on Twitter @VicRek.
S&P ekes out gain, Nasdaq sets fresh 12-year high; FB closes below $38
The Dow and S&P 500 closed near the flatline Tuesday, while techs climbed to boost the Nasdaq to a fresh 12-year high, as investors remained cautious ahead of the Federal Reserve's policy statement.
(Read more: Wall Street pros: Fall taper priced in...sort of)
(Read more: Wall Street pros: Fall taper priced in...sort of)
|DJIA||Dow Jones Industrial Average||15520.59||-1.38||-0.01%|
|S&P 500||S&P 500 Index||1685.96||0.63||0.04%|
|NASDAQ||Nasdaq Composite Index||3616.47||17.33||0.48%|
The Dow Jones Industrial Average closed slightly lower, dragged by Verizon and AT&T.
The S&P 500 eked out a small gain, while the Nasdaq gained to hit a fresh record high. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded above 13.
Among key S&P sectors, telecoms dragged, while techs held their gains.
Time to buy big-cap stocks?
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Among techs, Facebook advanced more than 6 percent after the social-networking giant announced the launch of Facebook Mobile Games Publishing, a "pilot program to help small and medium-sized developers take their mobile games global." The stock has surged more than 45 percent so far this month and is trading close to its IPO price of $38 a share. (Read more: Facebook nearing its IPO price. Here's why) And Apple rose above $450 a share for the first time in over a month. The stock has soared nearly 14 percent so far this month and is having its best month since last February. On the earnings front, Pfizer gained after the U.S.'s largest drugmaker posted numbers that were slightly ahead of expectations. Rival pharmaceutical company Merck topped profit expectations but showed weakness on revenue. And BP posted earnings that missed analysts' expectations, but warned that its $20 billion oil-spill compensation fund has almost run out. Following the earnings report, CEO Bob Dudley told CNBC that class action lawsuits like the ones BP is facing in the U.S. are a "business model" that serve only to benefit attorneys. Shares declined. Aetna ticked higher after the health insurance company posted better-than-expected quarterly results, following similar earnings beats by larger rivals UnitedHealth and WellPoint. With quarterly results in from nearly 60 percent of the S&P 500 companies, 67 percent have beaten earnings expectations—in line with the average beat over the last four quarters. Meanwhile, about 55 percent of the companies have beaten revenue expectations, more than the 48 percent of revenue beats in the past four earnings seasons, according to the latest data from Thomson Reuters. If all remaining companies report earnings in line with estimates, earnings will be up 4 percent from last year's second quarter. (Read more: What earnings seasonis saying about road ahead)
Amgen, Aflac, Symantec and Take Two Interactive are among notable companies scheduled to report after the closing bell. But trading volume is likely to be muted again as investors look ahead to the statement from Federal Reserve's policy-setting meeting. In addition, the first reading of second-quarter gross domestic product will be due Wednesday. And the closely-watched July employment report will be reported Friday. The Fed is expected to maintain its accommodative monetary policy, but investors will be looking for hints on when the central bank might start scaling back on its monthly bond-buying program. In addition, markets will also be eager for hints for who may replace Ben Bernanke next year as Fed Chairman. (Read more: Fed expectations: will they stay or will they slow?) "It's a pivotal time for Fed policy, and it would be advantageous to have someone at the helm who had already gone through the analytical process of getting comfortable with the last five years of policy, rather than coming in with a completely clean slate and trying to potentially reinvent it," said Ian Lyngen, senior Treasury strategist at CRT Capital. (Read more: Fed intrigue, not policy, has market attention) On the economic front, single-family home prices rose 1 percent in May on a seasonally adjusted basis, according to the S&P/Case-Shiller composite index of 20 metropolitan areas. Economists polled by Reuters expected a gain of 1.5 percent. Meanwhile, consumer confidence slipped slightly to a reading of 80.3 in July from an upwardly revised 82.1 in June, according to the Conference Board. Economists surveyed by Reuters expected a reading of 81.1. Mosaic plunged more than 20 percent after Russia's Uralkali pulled out of a venture with its partner in Belarus, a move it expects will cause global prices to plunge by 25 percent. Uralkali and Belarus potash maker Belaruskali were partners for eight years in BPC, which accounts for 43 percent of the global potash export market. Shares of Potash and Agrium also tumbled sharply. Community Health Systems rallied after the hospital chain announced it would acquire smaller Health Management Associates in a $3.9 billion deal. HMA tumbled nearly 10 percent following the news. JPMorgan ticked higher after the banking giant said it would pay a total of $410 million to settle allegations of energy market manipulation in California and the Midwest. The Japanese yen weakened against the dollar to above the 98-level in early trade, leading the export-heavy Nikkei index to rally 1.5 percent. Meanwhile, South Korea's Kospi added 0.9 percent and the Shanghai Composite traded within sight of the 2,000 mark. European shares rose after an upbeat German consumer confidence report. The Gfk research institute said its forward-looking consumer index hit its highest level since September 2007, thanks to an improving labor market and expectations for more robust economic growth.—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter:
Bankers, bankers uber alles, uber alles in der welt
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Bank of England Helped Sell Looted Nazi Gold
By Claire Jones
Financial Times, London
Tuesday, July 30, 2013
The Bank of England played a vital role in one of the darkest episodes in central banking history, facilitating the sale of gold looted by the Nazis after their invasion of Czechoslovakia in 1939.
According to a hitherto unpublished history of the BoE's activities in and around the second world war, the UK's central bank sold gold on behalf of the Reichsbank -- which Germany's central bank had seized from its Czech counterpart -- after the UK government had frozen all Czech assets held in Britain following the Nazi invasion.
In March 1939, gold valued at the time at L5.6 million was transferred from the National Bank of Czechoslovakia's account at the Bank for International Settlements, the so-called central bankers' bank, to an account managed on behalf of the Reichsbank.
The episode has long weighed on the reputation of the BIS. However, what has received less attention is the role of the BoE in the affair. What emerges from the history, which appeared on the BoE's website on Tuesday --
-- is that the UK's central bank prioritised the appeasement of the BIS over the British government's wishes to freeze the sale of Czech assets.
The BoE, which then held the chair of the Basel-based institution through Otto Niemeyer, the director in charge of its overseas and foreign department, stored much of the BIS's gold in its vaults at Threadneedle Street. That the BoE held the gold caused controversy after the story broke in the British media in May 1939.
The history, written by BoE officials and completed in 1950 but never published, also records that the UK central bank sold gold after this date on behalf of the Nazis -- and without waiting for the consent of the British government -- on the back of pressure from the BIS.
There was a further gold transaction on the 1st June  when there were sales of gold (L440,000) and gold shipments to New York (L420,000) from the No.19 account of the BIS This represented gold which had been shipped to London by the Reichsbank," the history said.
"This time, before acting, the Bank of England referred the matter to the chancellor, who said that he would like the opinion of the law officers of the Crown. On the BIS enquiring, however, what was causing delay and saying that inconvenience would be caused because of payments the next day, the Bank of England acted on the instructions without referring to the Law Officers, who, however, subsequently upheld their action."
The documents also show that Montagu Norman, then governor of the BoE, was opaque in his communications with John Simon, the chancellor at the time, when pressed on whether the central bank still held the Czech gold.
"On 26th May the chancellor wrote to the Governor asking whether the Bank of England still held the Czech gold, as the information might help him to answer questions in the House. The Governor in his reply (30th May) did not answer the question, but pointed out that the Bank held gold from time to time for the BIS and had no knowledge whether it was their own property or that of their customers. Hence, they could not say whether the gold was held for the National Bank of Czechoslovakia."
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