The Greek Referendum

Sun, Jul 5, 2015 - 5:38pm

Greece votes "NO" and the shockwaves will be felt in the week ahead.

As the forex markets began trading late Sunday, the impact of the Greek vote was significant but not overwhelming. As you can see on the screenshot below, after six minutes of trading the euro was down about 1% versus all of the other, major fiat currencies:

So, is that it? Is this latest crisis over? Hardly.

However, just like last week, you can bet that the BoJ and the SNB stand ready to intervene if they don't like the way things are headed overnight. That may keep things stable as we head toward the Comex and NYSE open on Monday...but...the Greek vote has certainly placed the ECB, the IMF and the entire "troika" in a tough spot. Why? They have two options, both of them bad:

  1. Renegotiate Greece's debt and face an open revolt from Spain, Italy, Portugal and other Eurozone countries with similar debt burdens. These other countries will rightly assume that if Greece can get a "debt relief" deal, then they should be able to have one, too.
  2. Stand firm and watch Greece default and issue drachma to pay their debts. This will, in turn, encourage other debtors listed in pint #1 to do the same.

Considering that all of this will takes days/weeks to play out, the bigger story in the hours ahead may instead be the collapsing Chinese stock market. The Chicoms have put all sorts of "provisions" in place this weekend to attempt to hold back a tidal wave of selling so we'll get a good chance to see if centrally-planned stock markets really are crash-proof. Read here and see chart below:

As I go to post this as an overnight thread, here's where we stand with 22 minutes to go before Globex metals trading resumes at 6:00 pm EDT. The euro is down 1.25% vs the dollar and 1.8% vs the yen. In turn, the yen is UP vs the dollar by 0.5%. Therefore, regardless of the headlines and all of the other POSITIVE FUNDAMENTAL NEWS FOR GOLD, I wouldn't expect much at the open. Maybe gold will be up something like $2-4 with silver up 4-8¢. Yippy skippy.

Oh well, it's going to be a very interesting and volatile week. Be sure to keep your hands and feet inside the car at all times and enjoy the ride.


About the Author

turd [at] tfmetalsreport [dot] com ()


Jul 5, 2015 - 5:41pm



Jul 5, 2015 - 5:44pm

Even though this ZH piece

Even though this ZH piece sources JPM, it's worth reading nonetheless:

And this brand new summary is excellent and a must read:

Jul 5, 2015 - 5:45pm

Oh My indeed! .....

No was FIRST! Yes was second ...

First is going to be a lot more entertaining than second. Should be one hell of a week coming up. If it isn't, you will know beyond the shadow of a doubt that TPTB remain firmly in control. This should shake some serious stuff loose!

wax off

Edit: No, I wasn't second. Apparently I wasn't the only wondering what was going on over in the frying pan of the EU.

Jul 5, 2015 - 5:47pm

O! My


Been sick all week because of a Thyroid problem but feel a wee bit better today and the No Vote made do a happy dance but not for the PM's or anything like that but for the People themselves. Hopefully they can break away from the Banksters and get their country back and hopefully it's the starting point for the rest of Europe. Keep Stacking

Dr. P. Metals
Jul 5, 2015 - 5:48pm



Edit: no have to be kidding me!?! Marchas??!?!?!

Jul 5, 2015 - 5:50pm
Jerry T
Jul 5, 2015 - 5:52pm



Dr. P. Metals
Jul 5, 2015 - 5:53pm
Jul 5, 2015 - 5:53pm

Citigroup Just Cornered The "Precious Metals" Derivatives Marke

Citigroup Just Cornered The "Precious Metals" Derivatives Market

Submitted by Tyler Durden on 07/04/2015 22:48 -0400


One week ago, when we scoured through the latest OCC quarterly derivative report (in which we find that the top FDIC insured 4 US banks continue to account for over 90%, or $185.5 trillion of all outstanding derivatives which as of March 31 amounted to $203 trillion; nothing new here), we found something fascinating: based on the OCC's derivative update, JPM had literally cornered the commodity derivatives complex, when from "just" $226 billion in total Commodity exposure, JPM's notional soared by 1,690% in one quarter to $4 trillion, or about 96% of total.

Some, without even bothering to read the article, did what they always do when reacting to Zero Hedge articles: accused it of writing a "wrong" post first and asking questions later and coming up with some utterly incorrect response to show just how wrong Zero Hedge was because, guess what, the Office of the US Currency Comptroller had clearly "fat fingered" trillions in critical data which is far more logical.

As usually happens in these situations, Zero Hedge was right (there was some tongue in cheek apology but hey, at least someone got to boost their traffic briefly by namedropping this web site; incidentally apology accepted), which could have been checked simply just by looking at bank call reports, in this case the quarterly Regulatory Capital report, schedule RC-R, which made it very clear that indeed JPM's OTC commodity derivatives had exploded to $4 trillion.

For those too lazy to check before tweeting, here is the number of OTC cleared "Other" commodity derivatives for JPM before, as of December 31:

And after, as of March 31:

Furthermore, while we await the OCC to respond to our inquiry (we aren't holding our breath), nobody has disputed our claim (because it is purely factual) that as of Q1 the OCC decided to exclude Gold as a separate commodity category (see call reports above) and lump it in with Foreign Exchange for some still unexplained reason. It would appear that gold is money after all...

So to summarize: as we reported first (and we would be delighted if other so called financial experts dedicated as much effort to digging through the primary data as they have to desperately try to disprove our article), JPM has indeed cornered the OTC commodity market, with its $4 trillion in "Other" commodity derivatives which amount to 96% of total. We don't expect anyone to ask Jamie Dimon about this on the quarterly earnings call because this is one of those things one doesn't want an answer to if one wishes to be invited to the next conference call.

However, another big question remains: just what is Citigroup - not, not JPMorgan - with the Precious Metals category.

Here is the chart showing Citigroup's Precious Metals (mostly silver now that gold is lumped in with FX), exposure over the past 4 years. Of note: the 1260% increase in Precious Metals derivative holdings in the past quarter, from just $3.9 billion to $53 billion!

For those of a skeptical bent the proof can be found in Citi's own call report, which can be seen here as of March 31, 2015 vs December 31, 2014.

Another way of showing what Citi just did with the "Precious Metals" derivative category, is the following chart which shows Citi's total PM derivative exposure as a percentage of total.

Soaring from just 17.4% to over 70%, there is just one word for what Citigroup has done to what the Precious Metals ex Gold (i.e., almost exclusively silver) derivatives market.


So, the question then is: just what is Citigroup doing with its soaring Precious Metals (excluding gold) exposure, and why is such a dramatic place taking place at precisely the time when not only JPM is cornering the entire "Other" Commodity derivatives market in the form of a whopping $4 trillion in derivatives notional, but in the quarter after none other than Citigroup itself was responsible for drafting the swaps push-out language in the Omnibus bill.

And also: how is it legal that JPM is solely accountable for 96% of all commodity derivatives while Citigroup is singlehandedly responsible for over 70% of all "precious metals" derivatives? Surely even by the most lax standards this is illegal, but what makes the farce even greater is that all of this taking place out of FDIC-insured entities!

The final question, which we are absolutely certain will remain unanswered, is whether any of these dramatic surges have anything to do with the recent move in precious metals prices, or rather the complete lack thereof, even as Europe is on the verge of its first member officially exiting the Eurozone, and China's stock market is suffering its worst market crash since 2008. Oh, and we almost forgot: with both JPM and Citi now well over 50% of the derivatives market in two critical categories, who is the counterparty!?

We have inquired with the OCC about both the derivative moves of both JPM's "commodity" and Citi "precious metals" surges, both rising by over 1000% in the past quarter. We will promptly inform readers if we hear back, which we won't.

Jul 5, 2015 - 5:54pm

5th or 6th

does Turd's place count? EDIT: Rat Puke! Now I've really lost count.

Mr. Fix
Jul 5, 2015 - 5:55pm

Don't you just love "nuclear options"?

Greece Contemplates Nuclear Options: May Print Euros, Launch Parallel Currency, Nationalize Banks

Submitted by Tyler Durden on 07/05/2015 - 17:41

According to Telegraph's Ambrose Evans Pritchard who quotes what appears to be a direct quote to him from Yanis Varoufakis, Greece will, "If necessary... issue parallel liquidity and California-style IOU's, in an electronic form. We should have done it a week ago." Hardliners within the party - though not Mr Varoufakis - are demanding the head of governor Stournaras, a holdover appointee from the past conservative government. They want a new team installed, one that is willing to draw on the central bank's secret reserves, and to take the provocative step in extremis of creating euros.

Sorry Turd, I see you already posted this one, I guess I'm just late to the party today.

Jul 5, 2015 - 5:55pm

#105 Cyprus

---> #44 Greece---->?

I'm going with #14 España.

*these are 2014 GDP #'s, best I could come up with.

Marchas - kelp

Jul 5, 2015 - 6:00pm

USDJPY back to session lows

USDJPY back to session lows near 122. May get +$5 gold open.

Jul 5, 2015 - 6:00pm

Oops wrong. +$6

Gosh I missed it by a whole buck...

Jul 5, 2015 - 6:00pm

Dr. P. Metals

I'm sick of Ken and JC. They are both wrong!

Jul 5, 2015 - 6:01pm

And within a minute, back to

And within a minute, back to only +$4. That's more like it.

Jul 5, 2015 - 6:01pm

Silver opened +7¢ and within

Silver opened +7¢ and within a minute was back to UNCH.

Jul 5, 2015 - 6:03pm


there are no markets, only interventions...

Jul 5, 2015 - 6:04pm

Three minutes in...

Silver now DOWN 6¢

I hope that this doesn't come as a surprise/disappointment to anyone...

Jul 5, 2015 - 6:05pm

No gaps


Is a small gap up that then closes better than a large gap up that then gets grinded down (as what happened with the jobs report over Easter holiday). It seems that stops at $1288 were protected last Sunday night and that set the tone for the week. How long can these stops be protected with the current CoT structure and price?

Also, check out the large spikes in volume in the bottoms of GDXJ and GDX. Would ETF's also be "derivatives"? If so, the large spikes in the first quarter in JPM and citi might be direct purchases of these, and large sales into key points might explain the suppression/control of the miners.

Jul 5, 2015 - 6:08pm


ETF holdings would not be considered "derivatives" for the purpose of the OCC report.

Jul 5, 2015 - 6:09pm

10 minutes in

Silver back to +4¢ and gold +$5

Jul 5, 2015 - 6:13pm


S&P futures down 25 pts or 1.3%.

Jul 5, 2015 - 6:14pm

Ok. Thanks, Turd!

The money has to somewhere. Where did it go? Long or short. I guess that is the big question.

Jul 5, 2015 - 6:15pm


The aggressive move in usd/jpy precisely at 6.

Only a moron would say these are free markets.

What a sick fucking joke this has all become.

Jul 5, 2015 - 6:16pm


Chinese stocks resume trading at 9:00 pm New York time this evening, 165 minutes from now.

Jul 5, 2015 - 6:18pm

BoJ at the ready and on the bid

Just like last week.

You are correct, my friend Mr Horse. All a farce. No "market" left anywhere.

USDJPY now at high of day at 122.44

Jul 5, 2015 - 6:22pm


are all just waiting for the drunk guys to leave the bar.

We know what happens next, just a matter of time!

Jul 5, 2015 - 6:27pm

The boy who cried wolf

Don't misread me, here. I have great joy that Greece is thinking of nationalizing the banks and printing Euros. I have similar joy that they exercised their voting power and told the ECB to pound sand. I have great anticipation that the Chinese stock bubble will lead to further dominos falling in the precious metals markets. But, I'm skeptical at the same time. There are lots of people out there that have been saying the same things for a long time, crying wolf as it were. I don't know that these events are really the wolf at the door. They will take time to play out. And when the wolf finally shows up, we may not recognize it.

Jul 5, 2015 - 6:28pm

No doubt Swiss National Bank

No doubt Swiss National Bank actively intervenes again to kick EUR back higher vs franc. Just like last week:


Donate Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events Week of 5/20

5/20 7:00 pm ET CGP speech
5/21 10:00 ET Existing Home Sales
5/22 2:00 ET FOMC minutes
5/23 9:45 ET Markit PMIs
5/24 8:30 ET Durable Goods

Key Economic Events Week of 5/13

TWELVE Goon speeches through the week
5/14 8:30 ET Import Price Index
5/15 8:30 ET Retail Sales and Empire State Manu. Idx.
5/15 9:15 ET Cap. Ute. and Ind. Prod.
5/15 10:00 ET Business Inventories
5/16 10:00 ET Housing Starts and Philly Fed
5/17 10:00 ET Consumer Sentiment

Key Economic Events Week of 5/6

5/9 8:30 ET US Trade Deficit
5/9 8:30 ET Producer Price Index (PPI)
5/9 10:00 ET Wholesale Inventories
5/10 8:30 ET Consumer Price Index (CPI)

Recent Comments

by argentus maximus, 2 hours 4 min ago
by argentus maximus, 7 hours 23 min ago
by Craigo, 10 hours 8 min ago
by scoremore, 11 hours 32 min ago