Paging Dr. Crane

112
Tue, Oct 8, 2013 - 11:21am

Occasionally, we are allowed glimpses of the inner workings of The Evil Empire. Let's just summarize how this works because, frankly, I'm already so angry that my blood pressure is boiling AND it's only Tuesday.

Back on April 10, two days before the Brutal Beatdown Scheme of April was launched, Goldman Sachs rolled out their "analysts" to report that they were officially forecasting a drop in gold prices. They not only advised clients to sell their gold, they even took the unusual step of recommending their clients to go short. Below is some text from this link:

https://online.wsj.com/article/SB10001424127887324240804578414872583064816.html

Investment bank Goldman Sachs Group Inc. GS +0.29% said Wednesday that gold's prospects for the year have eroded, recommending investors close out long positions and initiate bearish bets, or shorts. The shift in outlook was the latest among banks and investors who have soured on gold as its dozen-year runup has been followed by a 12% decline in the last six months.

Goldman began the year predicting gold would decline in the second half of 2013, but said Wednesday the drop began earlier than expected and doesn't appear likely to reverse. Like others, the firm said the usual catalysts that have been bullish for gold during its run are no longer working.

The precious metal, normally a haven for investors in troubled times, has continued to fall in recent weeks despite persistent concerns about the global economy, including continued euro-zone debt troubles with the bailout of Cypriot banks, an aggressive new economic-stimulus program in Japan and surprisingly weak U.S. jobs data last week that raised questions about the domestic recovery.

"A large rebound in gold prices is unlikely barring an unexpected sharp turn in the U.S. recovery," Goldman's analysts wrote in a research note. "While higher inflation may be the catalyst for the next gold cycle, this is likely several years away." The firm noted that its year-end price targets of $1,450 a troy ounce in 2013 and $1,270 in 2014 are below prices in the futures market pegged to those delivery dates.

On the surface, this worked beautifully for Goldman's clients. Just two days later, gold fell $60 and, on the following Monday, it fell another $140. Wow! Pretty remarkable bit of good timing, wouldn't you say? Tell your clients to short something and then, magically, that "something" falls 13% within the next week!

Of course, you and I know what really happened. Some 400+ metric tonnes of paper gold were dumped onto the Comex at the critical support level of $1525. This supply simply overwhelmed the existing bids and price began to cascade downward as sell-stops were triggered with price breaking down and out of its 19-month range. An excellent summary of the event can be found here: https://news.sharpspixley.com/article/ross-norman-gold-crushed-by-400-tonnes-or-usd20-billion-of-selling-on-comex/159239/ and here: https://www.zerohedge.com/news/2013-04-15/gold-crush-started-400-ton-friday-forced-sale-comex

Having executed The Perfect Crime Trade for their clients, what did Goldman turn around and do next? They bought, of course! From the Q2 updates , we found that the the biggest institutional buyer of the GLD between April 1 and June 30 was...wait for it...GOLDMAN SACHS! See for yourself here: https://www.nasdaq.com/symbol/gld/institutional-holdings/activity

Not only that, as you can see below, almost every other large institution was selling the GLD during this time period:

Owner Name Date Shared Held Change (Shares) Change(%) Value(in 1,000s)
PAULSON & CO INC 06/30/2013 10,234,852 (11,602,700) (53.13) 1,306,377
JPMORGAN CHASE & CO 06/30/2013 8,558,297 (1,597,536) (15.73) 1,092,381
BANK OF AMERICA CORP /DE/ 06/30/2013 7,636,484 (2,384,866) (23.8) 974,721
MORGAN STANLEY 06/30/2013 6,685,898 34,422 .52 853,388
CREDIT SUISSE AG/ 06/30/2013 6,428,901 181,849 2.91 820,585
GOLDMAN SACHS GROUP INC 06/30/2013 4,430,302 3,738,775 540.66 565,484
BLACKROCK ADVISORS LLC 06/30/2013 3,425,203 307,455 9.86 437,193
UBS AG 06/30/2013 3,005,507 (2,712,074) (47.43) 383,623
FIRST EAGLE 06/30/2013 2,787,408 165,200 6.30 355,785
SCHRODER 06/30/2013 2,012,384 (72,899) (3.5) 256,861
SCS CAPITAL MANAGEMENT LLC 06/30/2013 1,911,822 52,035 2.80 244,025
NORTHERN TRUST CORP 06/30/2013 1,909,070 (4,994,140) (72.35) 243,674
ALLIANZ ASSET MANAGEMENT AG 06/30/2013 1,722,280 (1,165,663) (40.36) 219,832
SUNTRUST BANKS INC 06/30/2013 1,660,069 (167,213) (9.15) 211,891
LAZARD ASSET MANAGEMENT LLC 06/30/2013 1,572,703 (399,996) (20.28) 200,740

So, after advising their muppets clients to sell just two days before the deliberate and designed price smash, Goldman used the price weakness to increase their GLD holdings by 541%.

Perhaps now would also be an excellent time to remind you that Goldman is a Authorized Partcipant for the GLD. From the Q2 10-Q (https://www.spdrgoldshares.com/media/GLD/file/SPDR_Gold_Trust_10-Q_(quarter-ended_06_30_13).pdf), here's your current list:

SPDR® Gold Trust is an investment trust that was formed on November 12, 2004 (Date of Inception). The Trust issues baskets of Shares, or Baskets, in exchange for deposits of gold and distributes gold in connection with the redemption of Baskets. The investment objective of the Trust is for the Shares to reflect the performance of the price of gold bullion, less the expenses of the Trust’s operations. The Shares are designed to provide investors with a cost effective and convenient way to invest in gold.

As of the date of this quarterly report, Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman, Sachs & Co., Goldman Sachs Execution & Clearing, L.P., HSBC Securities (USA) Inc., J.P. Morgan Securities Inc., Merrill Lynch Professional Clearing Corp., Morgan Stanley & Co. Incorporated, Newedge USA LLC, RBC Capital Markets Corporation, Scotia Capital (USA) Inc., UBS Securities LLC, Virtu Financial Capital Markets, LLC (f/k/a EWT, LLC) and Virtu Financial BD LLC are the only Authorized Participants. An updated list of Authorized Participants can be obtained from the Trustee or the Sponsor.

And then let's throw this log on the fire...On April 10, 2013, the GLD showed an "inventory" of 1,183.53 metric tonnes of "gold". As of last evening, the stated "inventory" was just 899.99 metric tonnes. As an Authorized Participant, how many of these 283.54 metric tonnes of gold has Goldman removed for themselves? Makes you wonder, doesn't it?

OK, let's see if we've got this straight...

  • Two days before the initiation of The Brutal Beatdown Scheme of April was launched, Goldman Sachs advises its clients to not only sell their gold but to take the extra step of shorting it outright.
  • Price is then deliberately smashed and has yet to recover.
  • Goldman uses this price weakness to buy over 3.7MM shares of the GLD, increasing their position by 540%.
  • Only Authorized Participants can redeem shares for gold and Goldman is an Authorized Participant.
  • From April 10 through last evening, the GLD has disgorged itself of 283.54 metric tonnes (24%) of it's inventory.
  • So, now, what do we have this morning that has ole Turd all worked up? Just this:

    https://www.bloomberg.com/news/2013-10-08/goldman-s-currie-says-gold-is-slam-dunk-sell-after-shutdown.html

    From the link:

    Gold, set for its first annual loss in 13 years, is a “slam dunk” sell for next year because the U.S. economy will extend its recovery after lawmakers resolve stalemates over the nation’s budget and debt ceiling, Goldman Sachs Group Inc.’s Jeffrey Currie said.
    The bank has a target for gold prices next year at $1,050 an ounce, Currie, Goldman Sachs’s head of commodities research, said today on a panel in London. The precious metal has tumbled 21 percent this year to $1,322.28 an ounce on speculation that the Federal Reserve would reduce its $85 billion monthly bond-buying program, known as quantitative easing, as the economy recovers. Lawmakers probably will reach an agreement on raising the debt ceiling before the Oct. 17 deadline, Currie said.
    “Once we get past this stalemate in Washington, precious metals are a slam dunk sell at that point,” Currie said. “You have to argue that with significant recovery in the U.S., tapering of QE should put downward pressure on gold prices.”
    Currie and Ric Deverell, the head of commodities research at Credit Suisse AG, both said on a panel at the Commodities Week conference in London today that selling gold is their top recommendation for trading in raw materials in the next year. Gold is heading for its first annual loss since 2000, and is the third-worst performing commodity in the Standard & Poor’s GSCI gauge of 24 raw materials this year, after corn and silver.

    (You might go back up and check to see if Credit Suisse is a GLD Authorized Participant, too. Oh, and look, Credit Suisse was adding GLD shares in Q2, also. Not at the rate GS was, mind you, but a buyer nonetheless. Looks like they wants to get in on the act, too.)

    So, you have been warned. The Head of Commodities Research at Goldman Sachs is on record as predicting a sharp drop in the price of gold as soon as The Great Debt Ceiling Debate is resolved. Instead of price targets of $1450 and $1270, Goldman now claims that gold is heading to $1050.

    How many shares of the GLD did they add in Q3 and how many will they add in Q4? (We'll soon know.) As an Authorized Participant, how many shares will they convert into physical for their own, proprietary accounts? (We'll never know.)

    Clearly, all of this has been orchestrated to trick Speculators into selling paper gold. This price pressure allows banks like Goldman Sachs to buy gold on the cheap and accumulate it before the eventual breakdown of the current, fractional reserve bullion banking system. Obviously, your best move is to NOT be a muppet. You shouldn't be selling gold, you should be buying it. If Goldman and the other criminal banks initiate another raid on price in the days ahead, recall this chart and buy with confidence, knowing that the obvious correlation, which has held since 2002, will soon re-establish itself.

    I pray that, one day soon, these sociopathic bankers will be held accountable for the economic disasters they have inflicted upon the world, all for their own personal gain. "For what does it profit a man to gain the whole world, yet forfeit his soul?"

    TF

    About the Author

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    turd [at] tfmetalsreport [dot] com ()

      112 Comments

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    DollarMenu2achmachat
    Oct 9, 2013 - 12:29pm

    @ achmachat RE: signs...

    We have a phrase "Close enough for government work" that may apply here

    :-)

    I have no clue to the real truth.

    Chef
    Oct 9, 2013 - 12:28pm

    Goldman Has the fire power for the next big short

    Who gives a flying duck through a rolling donut if Goldman went short then turned around and bought Gold still doesnt make the price higher today does it?

    Now they have the leverage to sell while they short the metal all the way down to 950 All they have to do is redeem the gold ship it to Asia pocket the cash sales and take the short cash money to double down their investment its a win win win for Goldman. The only way this ends is if the Dollar tanks and loses its international appeal. I have been reading this Shite about How Goldman is pulling your pud Turd but look they seem to be the ones with the happy ending and you are just lamenting the life you thought you would have by being long the metals.

    Janet Yellen will spool up the printing presses full steam ahead. The muppets will continue to agree with Obama that they need the government nanny state to dole out more freebies and support all the while they regulate and legislate the frauds for their 1% buddies. Nothing changes. buy metals at your own risk... nice to have phys but the paper will continue to be manipulated for ever as long as they own government hacks like Obama and Holder, Boehner et al... are there to cover their asses.

    seva108
    Oct 9, 2013 - 12:28pm

    Thank you

    Glad to help.

    opticsguy
    Oct 9, 2013 - 12:27pm

    In case you were looking for new $100 bills

    My bank told me I could order some, so I did. They won't come in until November. This is a community bank, not one of the TBTFs. They did have a huge amount of $50s right of the presses.

    seva108
    Oct 9, 2013 - 11:47am

    Amazing subscription value

    Uncanny accuracy by Turd. I believed, and made money on both the short and long side thanks to Turd's illumination of how the markets are manipulated.

    Silver_investor
    Oct 9, 2013 - 11:30am

    Thanks

    Thanks for making this post available to everyone. I am weary from all this criminality. I'll admit that I bought PMs not only to preserve my life savings but also to make money in the short term. The latter objective hasn't worked out so well. I now see my stack as just an insurance policy as I still believe that this grand experiment in money printing will not end well. But they may be able to keep this going for quite some time. As Paul Craig Roberts noted in his recent interview with Greg Hunter, this could end at any time, but nobody knows WHEN.

    Key Economic Events Week of 5/25

    5/26 8:30 ET Chicago Fed
    5/26 10:00 ET Consumer Confidence
    5/27 2:00 ET Fed Beige Book
    5/28 8:30 ET Q2 GDP 2nd guess
    5/28 8:30 ET Durable Goods
    5/29 8:30 ET Pers Inc and Cons Spend
    5/29 8:30 ET Core Inflation
    5/29 9:45 ET Chicago PMI

    zman
    Oct 9, 2013 - 11:26am

    Dollar soaring today

    Looks like the dollar could be in the beginning stages of a strong short term rally (2 months), if so, we could be testing the recent lows in the metals.

    The mining sector action is pointing to new lows, a very bearish scenario for the whole PM sector.

    Orange
    Oct 9, 2013 - 11:20am
    Rico
    Oct 9, 2013 - 11:14am

    Goldman's right--gold is

    Goldman's right--gold is going down substantially from here. So what?

    GLD will be bought by the smart money at lower prices than the current price. Again, so what?

    What is the problem? That prices fluctuate over time?

    Mr. Fix
    Oct 9, 2013 - 11:09am

    Obama is trying to provoke a revolution.

    https://thecommonsenseshow.com/2013/10/09/obama-is-trying-to-provoke-a-r...

    Seems like I've been saying this for a long time, but now I am starting to find a lot of articles that reflect my thoughts exactly.

    It is the only logical conclusion one can draw from current events.

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    Key Economic Events Week of 5/25

    5/26 8:30 ET Chicago Fed
    5/26 10:00 ET Consumer Confidence
    5/27 2:00 ET Fed Beige Book
    5/28 8:30 ET Q2 GDP 2nd guess
    5/28 8:30 ET Durable Goods
    5/29 8:30 ET Pers Inc and Cons Spend
    5/29 8:30 ET Core Inflation
    5/29 9:45 ET Chicago PMI

    Key Economic Events Week of 5/18

    5/18 2:00 ET Goon Bostic speech
    5/19 8:30 ET Housing starts
    5/19 10:00 ET CGP and Mnuchin US Senate
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    5/20 2:00 ET April FOMC minutes
    5/21 8:30 ET Philly Fed
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    Key Economic Events Week of 5/11

    5/11 12:00 ET Goon Bostic speech
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    5/12 8:30 ET CPI
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    5/12 5:00 ET Goon Mester speech
    5/13 8:30 ET PPI
    5/13 9:00 ET Chief Goon Powell speech
    5/14 8:30 ET Initial jobless claims and import prices
    5/14 1:00 ET Another Goon Kashnkari speech
    5/14 6:00 ET Goon Kaplan speech
    5/15 8:30 ET Retail Sales and Empire State index
    5/15 9:15 ET Cap Ute and Ind Prod
    5/15 10:00 ET Business Inventories

    Key Economic Events Week of 5/4

    5/4 10:00 ET Factory Orders
    5/5 8:30 ET US Trade Deficit
    5/5 9:45 ET Markit Service PMI
    5/5 10:00 ET ISM Sevrice PMI
    5/6 8:15 ET ADP jobs report
    5/7 8:30 ET Productivity
    5/8 8:30 ET BLSBS
    5/8 10:00 ET Wholesale Inventories

    Key Economic Events Week of 4/27

    4/28 8:30 ET Advance trade in goods
    4/28 9:00 ET Case-Shiller home prices
    4/29 8:30 ET Q1 GDP first guess
    4/29 2:00 ET FOMC Fedlines
    4/29 2:30 ET CGP presser
    4/30 8:30 ET Pers Inc and Cons Spend
    4/30 9:45 ET Chicago PMI
    5/1 9:45 ET Markit Manu PMI
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    Key Economic Events Week of 4/20

    4/20 8:30 ET Chicago Fed
    4/21 10:00 ET Existing home sales
    4/23 8:30 ET Weekly jobless claims
    4/23 9:45 ET Markit flash PMIs
    4/24 8:30 ET Durable Goods

    Key Economic Events Week of 4/6

    4/8 2:00 ET March FOMC minutes
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    Key Economic Events Week of 3/30

    3/31 9:45 ET Chicago PMI
    4/1 8:15 ET ADP Employment
    4/1 9:45 ET Markit manu PMI
    4/1 10:00 ET ISM manu PMI
    4/2 10:00 ET Factory Orders
    4/3 8:30 ET BLSBS
    4/3 9:45 ET Market service PMI
    4/3 10:00 ET ISM service PMI

    Key Economic Events Week of 3/23

    3/24 9:45 ET Markit flash PMIs
    3/25 8:30 ET Durable Goods
    3/26 8:30 ET Weekly jobless claims
    3/27 8:30 ET Personal Inc and Spending

    Key Economic Events Week of 3/9

    (as if these actually matter)
    3/11 8:30 ET CPI
    3/12 8:30 ET weekly jobless claims
    3/12 8:30 ET PPI
    3/13 8:30 ET Import Price Index

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