Starting Tuesday

Tue, Dec 13, 2011 - 10:02am

No time for a complete post this morning but there are several items to which I'd like to draw your attention.

First of all, The Turd is like most everyone else...I enjoy a little notoriety. Someone emailed me a notice that I had been mentioned in FOFOA's latest column. Naturally, I went to the site and read it. It turns out that this is a very good piece and something you should definitely take the time to read.

The article makes several references to Santa's recent interview on KWN. Again, if you haven't yet taken the time to listen, I strongly encourage you to do so.

After the $50 drop yesterday, let's all be on the lookout for the OI numbers when they are reported this afternoon. If what I suspect is correct...namely that the "MFG Rehypothecation Awareness Program" and strongly negative lease rates were to blame for yesterday's drop...then I would expect to see a drop in OI on the order of 5000-10000 contracts, maybe even more. Why, you ask? The Cartel short position probably finished flat to down a little, day-over-day, as the new shorts that were added at the open yesterday were covered late in the session as gold moved off of its morning lows. The spec long position likely declined considerably for the reasons discussed back on Sunday night. Namely, in the wake of the "MFGRAP", why would anyone own paper metal???

One more thing on OI. Harvey has been drawing attention to the growing OI of the Dec11 contract:

"In another shocker, the front delivery month of December mysteriously saw its OI rise from 1356 to 1545 for a gain of 189 contracts despite 276 deliveries on Friday. Thus we gained 465 contracts or 46,500 oz of gold standing."

This is a very intriguing development and must be watched closely. As I understand it, to "jump the queue" at this point and purchase a Dec11 contract, an entity must immediately put up 100% margin with the intent to take delivery. To add 465 contracts this late in a delivery month is highly unusual. That's about $79MM in gold that someone is trying to buy, and take delivery of, as soon as possible...not wanting to wait for February. A very intriguing development, indeed.

More later. Be safe. TF

p.s. Several folks have asked me for a crude oil chart. Here you go.

And I forgot to include this. More fuel to the reports of US troops in Jordan. Do you think Assad believes they are "defensive" in nature after seeing Afghanistan, Iraq and Libya fall? What are the chances he just idly sits and hopes for the best?

About the Author

turd [at] tfmetalsreport [dot] com ()


Dec 13, 2011 - 12:22pm

dollar much more than


much more than .80 price

price and value are much different

all currencies are sinking in value

so a 80 print against all sinking currencies is misleading

and what can this tell ,, nothing ...

so why focus on this . trained like pavlovian dogs to hear a whistle .. to eat at the slop bowl

oz of gold .. oz of silver

not tons of paper stand in line for the next corzien event


and if we go above 80 we go above 80 lol prediction on dollar chart

Dec 13, 2011 - 12:24pm

I need a chuckle

MFGlobal and Pandora's Box? No it's worse than that -

Video unavailable

Dec 13, 2011 - 12:25pm

coin dealer

Turd, et al,

Your explanation of how dealers use futures contracts to protect the metal they take in is enlightening. The owner of Silvertowne (located in Winchester IN) reportedly lost a million in fiat to MFG, according to a friend in the coin business who knows him. Ouch! How can a small business survive a loss like that?

Dec 13, 2011 - 12:27pm

MF Global Execs Squirming

C-SPAN currently carrying questioning of Corzine, MF Global COO and MF Global CFO in front of Senate Ag Committee. Lots of uncomfortable squirming. Of course it's all for show, but it's entertaining and sickening to watch.

Dec 13, 2011 - 12:27pm

WaMu Ex-Officials Settle FDIC

WaMu Ex-Officials Settle FDIC Lawsuit -


Three former executives of Washington Mutual Inc. have agreed to settle a civil lawsuit stemming from the biggest-ever U.S. bank failure for less than 10% of the $900 million that was sought by federal regulators, according to people familiar with the situation.

Well, better luck next time. They did get their bonuses though, right?

Dec 13, 2011 - 12:29pm
Dec 13, 2011 - 12:34pm

Ex CIA Agent - some solutions

Interesting Solutions

Ex-CIA Agent Gives The Answer to NDAA and the Tyranny!
Dec 13, 2011 - 12:36pm

Did my gold stacking for the day

This kind of gold:

Was surprised to learn my dentists charge for a gold crown was only $50 more than a regular porcelain one. Since it was a molar all the way back in my mouth and wouldn't really show, I went for it. Found out it was the equivalent of around 15 karat but since the metal used to alloy with the gold was palladium, I thought I got a good deal for a measly extra $50.

Don't have to worry about it cracking like one of my porcelain ones did about a year ago.

I like the idea of masticating my bacon with gold. Hope I never need to yank it to cash it in.

cowdiddly Mudsharkbytes
Dec 13, 2011 - 12:40pm

If you ever have any more

If you ever have any more problems with that tooth again give me a shout. I have a dandy pair of needle nose pliers and a bottle of whisky. I offer the service free of charge but there will be no returns on extracted dental work.

Dec 13, 2011 - 12:40pm

Complimentary :)

Complimentary :)

Dec 13, 2011 - 12:43pm


It is sickening...incredibly so. I'm trying to listen just to be aware of what's being said, but it's hard to do it and keep breakfast down at the same time.

This three stooges trio is being asked seemingly tough questions, but they're tangential attacks on the credibility of the witnesses. NOT attempts to gain real information. So, the integrity of the men is called into question. No legal consequences, and of no import whatsoever beyond today's third page MSM blurbs recounting the hearings.

The question was asked (abbreviated and paraphrased):

"Where's the money?"


"I don't know."


"Who does know?"

??? The question was dodged (of course) and there was no follow-up pressing the COO, CFO and CEO of MF Global

to discover just who would have had the authority to "break the glass" and transfer customer funds out of segregated accounts for some other use.

The term "re-hypothecation" was mentioned, but no probing questions into just how that looked at MF Global.

Several times, witnesses have stated that they are "...unaware of any discussion of using customer funds for any use other than intended."

ROFL....we've learned that re-hypothecation of customer assets and cash are, and have been for a long time standard practice across the industry.

uggh.....just sickening dodging of the real issues WITH THE ASSISTANCE OF OUR ESTEEMED LEGISLATORS, who are playing the game of appearing tough, while probing absolutely nothing of significance.

Dec 13, 2011 - 12:53pm

Oil surges $4, then eases, on

Oil surges $4, then eases, on Iran concerns
| Reuters

(Reuters) - Oil surged nearly $4 a barrel on Tuesday in a furious burst of trading that traders struggled to explain, citing renewed jitters over Iran, expectations of further monetary easing and possibly computer-driving trading.
Brent and U.S. crude prices shot up quickly at 9:45 a.m. EST (1445 GMT), briefly tacking $3 on to earlier gains as volumes surged in one of the most concentrated bursts of trading activity in months. Other commodity markets did not jump, and more than an hour later traders were still unable to pinpoint a specific trigger for the sudden rise.
Markets participants also cited talk the U.S. Federal Reserve could be mulling a third round of quantative easing as adding an additional spark to the price jump.

Dec 13, 2011 - 12:59pm

Canada: - Zepol

Canada: - Zepol Reports November Vessel Imports Decrease 2.12%

Total October volume at Port of Long Beach is down 20.5 percent annually - Article from Logistics Management

November 18, 2011
October volumes at the Port of Long Beach (POLB) were down were down for the fourth straight month, according to data released by the port this week.

Fact is folks the world is slowing...we all know how this bodes for Metals. Not saying take your stash and cash it in that is a personal decision, but I see cheaper prices coming for sure, so a little off the top if needed is not a bad thing.

Be well

Dec 13, 2011 - 12:59pm

FOMC statement is set to be released in T minus 78 minutes.

The Federal Open Market Committee is set to release a statement at around 2:15 p.m.
Washington time, following its last scheduled meeting of the year. Here's a Bloomberg article,
though it just references a survey. That way it's not sticking it's neck out, one way or another.

It's Bernanke's birthday. ZH reported that the GOP sent out a letter,
requesting not to release any more QE. On the weekly chart, we're
at the point in the pennant, where the two (2) edges intersect.

OK. T minus 77 minutes now. I'll leave you with this video (below) a friend of mind shared with me.
If there's QE, we'll be having a house party... if not, we could just plunge into the abyss,
or keep doing this sideways stuff, right? Yikes! The wait is kind of exciting though, too.


p.s. i am glad their not releasing leaks early... I'd rather wait & hear it in the press statement.

Dec 13, 2011 - 12:59pm


Getting out of any ​big bank is a good idea in this environment. Credit Unions are owned by the account holders. Your money stays in your community.

Regarding your QTrade account; make sure it is a "cash" account. If you currently have margin privileges, I'd strongly suggest giving them up. Using leverage in this market is crazy on top of being crazy enough to be in the market in the first place. Also, as you stated in your post, you want to avoid rehypothecation of your ​assets.

For even greater security regarding counterparty risk, consider moving any long term stock holdings in your QTrade account to direct registration. This takes your broker completely out of the picture regarding your investment in xyz company. Shares are still electronic, but they're held at the issuing company n your name, instead of with you broker in street name (= in your broker's name).

List of companies that offer direct registration is here.

While your here, visit EricO's gold miner thread in the forums. He's done lots of work analyzing and ranking Canadian jr gold producers, plenty of which are bargains right now.

Dec 13, 2011 - 1:00pm

Fascinating article by Hernando DeSoto

Derivatives are supposed to shift risk. They have failed because the sellers of the derivatives are/were insolvent. So where is the real liability? Mortgages aren't secure because of the title fiasco. Ownership of gold in HSBC vaults is questioned. Until a week ago, I had never heard of hypothecation.

One of my favorite economists outlines why he thinks the system is broken showing that credit does not go where knowledge is lost.

Dec 13, 2011 - 1:01pm


Congratulations. Your complete lack of respect for private intellectual property has just subjected Turd and tfmetalsreport to signifcant copyright infringement liability.

Dec 13, 2011 - 1:06pm
Dec 13, 2011 - 1:07pm

Good Guy's don't stoop to Bad Guy's level“-enemy-just-laughi

Top counter-terrorism officials have said for years that indefinite detention increases terrorism.

As Huffington Post notes today, the indefinite detention bill passed by the Senate last week hands the terrorists a big win:

A measure that Congress will likely pass this week allowing indefinite detentions of Americans by the U.S. military will mark a significant loss in the war on terrorism, says a retired admiral who ran the Navy legal system.


To Ret. Adm. John Hutson, who was Judge Advocate General of the Navy from 1997 to 2000 and is dean emeritus of the University of New Hampshire School of Law, the idea that the United States is chipping away at one of its fundamental principles of civilian law enforcement is a win for terrorists.

“The enemy is just laughing over this, because they will have gotten another victory,” Hutson told The Huffington Post. “There’ll be one more victory. There won’t be any bloodshed or immediate bloodshed, there’s not a big explosion, except in a metaphorical sense, but it is a victory nonetheless for the enemy. And it’s a self-inflicted wound.”


Besides Hutson’s 28 years in the military justice system, he counted himself a conservative and Republican who “didn’t vote for a Democrat for dogcatcher” until he became worried about the direction of the country and backed Obama in 2008.

bernard Stormdancer
Dec 13, 2011 - 1:08pm


I laugh in your general direction... this is the Internet, the Wild Wild West. go gnaw on your elbow, or some other universe matterium. Information should be either 100% symmetrical, or free. Now stop being a grumpy old man and go read the report.

Dec 13, 2011 - 1:17pm

Richard Russell Alert

New alert by Richard Russell:

He warns that the bear market is continuing from where it left off in 2009, and to be out of "ALL" stocks, including mining stocks.

Should his advice be heeded?

I Am The Unknown Comic
Dec 13, 2011 - 1:20pm

Training Exercise

In preparation (H) for BennyBoy's Fedspeak at 2:15 pm, Kitty felt that noobs on the site might want to bone up on this 3 minute crash course on "How To Interpret A Fed Speech." He does a really excellent job of 'splaining the calls the Chairsatan is making, and how the markets, which are run by other monkeys, will react.

Professor Seyfarth from the Richard Dawkins Foundation really does a bang-up job, IMHO and it is cerainly worth a lunch time 3 minute break. I believe he mentions that he has been studying the same group of monkeys for a long time....the Federal Reserve Board of Governors (and their Chief monkey).

Robert Seyfarth: Can Monkeys Talk?

The big question is, will it be a tiger, eagle or snake? We will have to listen closely to BennyBoy to find out.

silverwood Diamond
Dec 13, 2011 - 1:24pm

Should his advice be heeded?

Diamond IMO it is too late to sell the miners and especially if you are way underwater. I am just going to strap myself into the roller coaster and go for the ride. Just think what would happen to the miners if The Bernank decides to QE, HMMM?

Dec 13, 2011 - 1:24pm

Pig's Blood Boarding !

Best of class Muslim lie detector ! Monedas 2011 Comedy Jihad Truth Crusade ! PSA: There is more wisdom in "The Jerk" than in "The Koran" ?!?

Dec 13, 2011 - 1:25pm


Seems to me, Corzine and crew are blowing a big hole in the “we need to pay our CEOS‘, COOS’ and CFOS’ multi-million salaries so we can get the best talent in the industry” theory. These guys don’t know anything and are not responsible for anything according to their testimony. I’m afraid this might lead to lower pays for big corporate officers.

Good thing the precedent is being set. They can do what ever they want without prosecution.

Dec 13, 2011 - 1:25pm
Dec 13, 2011 - 1:31pm

GDXJ is getting hammered,

GDXJ is getting hammered, seems like someone got a peek at the Fed announcement.

Dec 13, 2011 - 1:39pm

let's hear some predictions

let's hear some predictions... what's the fed gonna say in 32 minutes?

Dec 13, 2011 - 1:41pm
Economical Disaster
Dec 13, 2011 - 1:41pm

Great Understanding of GOLD from APMEX

Gold may help Offset Weakness in Other Asset Classes

Just like the goods you buy every day, Gold does not change. The price of Gold changes because the purchasing power of your local currency (the U.S. Dollar) changes. Think of it this way:

  • One ounce of Gold is the same today as it was during the Roman Empire.
  • Likewise, the goods you buy have not changed: eggs, milk, electricity, clothing, etc.
  • What has changed is the amount of your currency you need to buy those goods.
  • A country’s currency is tied to the fortunes of that country’s economy and impacted by issues like excessive government debt.
  • As the purchasing power of currencies falls, the price of goods, including Gold, rises.

Gold is not tied to any individual economy or currency, is not affected by any country’s level of debt, and has historically been recognized and accepted globally as a storehouse of wealth. Today, even as Gold prices have increased, investors are choosing Gold as a hedge against declines in the purchasing power of their currencies.

Gold – your tool for Diversified Asset Allocation

Without Gold, your portfolio may be under stress to generate adequate performance through only one or two asset classes like Stocks and Bonds. This chart tells a compelling story. If a portfolio had a 10% allocation to Gold in January 2008 in the early stages of the U.S. financial crisis, by the end of 2010, Gold would have produced 45% of that portfolio’s investment return. Stocks, both domestic and international, would have produced little or none of that return during the same time period.

Diversifying your portfolio’s sources of return can help protect your assets during times of economic stress and uncertainty as well as help provide long term stability.

If you are unhappy with your portfolio’s performance during this continuing period of economic stress, perhaps now is the time to diversify with a new or greater allocation to Gold — the fourth asset class.

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TWELVE Goon speeches through the week
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