Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
STOCK MARKET WATCH -- Thursday, 30 July 2015
[font size=3]STOCK MARKET WATCH, Thursday, 30 July 2015[font color=black][/font]
SMW for 29 July 2015
AT THE CLOSING BELL ON 29 July 2015
[center][font color=green]
Dow Jones 17,751.39 +121.12 (0.69%)
S&P 500 2,108.57 +15.32 (0.73%)
Nasdaq 5,111.73 +22.53 (0.44%)
[font color=red]10 Year 2.28% +0.02 (0.88%)
30 Year 3.00% +0.02 (0.67%) [font color=black]
[center][/font]
[HR width=85%]
[font size=2]Market Conditions During Trading Hours[/font]
[center]
(click on link for latest updates)
Market Updates
[/center]
[font size=2]Euro, Yen, Loonie, Silver and Gold[center]
[/center]
[center]
[/center]
[/center]
[HR width=95%]
[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
[center]
Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
[/center]
[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
[center]
The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
Wall Street on Parade
[/center]
[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
[center]
Matt Taibi: Secret and Lies of the Bailout
[/center]
[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
[center]
LegitGov
Open Government
Earmark Database
USA spending.gov
[/center][font color=black][font size=2]Handy Links - Videos:[/font][/font]
[center]
Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
[/center]
[div]
[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
02/14/13 Gilbert Lopez, former chief accounting officer of Stanford Financial Group, and former controller Mark Kuhrt sentenced to 20 yrs in prison for their roles in Allen Sanford's $7.2 billion Ponzi scheme.
03/29/13 Michael Sternberg, portfolio mgr at SAC Capital, arrested in NYC, charged with conspiracy and securities fraud. Pled not guilty and freed on $3m bail.
04/04/13 Matthew Marshall Taylor,fmr Goldman Sachs trader arrested, charged by CFTC w/defrauding his employer on $8BN futures bet "by intentionally concealing the true huge size, as well as the risk and potential profits or losses associated."
04/04/13 Matthew Taylor admits guilt, makes plea bargain. Sentencing set for 26 June; faces up to 20 years in prison but will likely only see 3-4 years. Says, "I am truly sorry."
04/11/13 Ex-KPMG LLP partner Scott London charged by federal prosecutors w/passing inside tips to a friend in exchange for cash, jewelry, and concert tickets; expected to plead guilty in May.
08/01/13 Fabrice Tourré convicted on six counts of security fraud, including "aiding and abetting" his former employer, Goldman Sachs
08/14/13 Javier Martin-Artajo and Julien Grout charged with wire fraud, falsifying records, and conspiracy in connection with JP Morgan's "London Whale" trade.
08/19/13 Phillip A. Falcone, manager of hedge fund Harbinger Capital Partners, agrees to admit to "wrongdoing" in market manipulation. Will banned from securities industry for 5 years and pay $18MM in disgorgement and fines.
09/16/13 Javier Martin-Artajo and Julien Grout officially indicted on charges associated with "London Whale" trade.
02/06/14 Matthew Martoma convicted of insider trading while at hedge fund SAC (Stephen A. Cohen) Capital Advisors. Expected sentence 7-10 years.
03/24/14 Annette Bongiorno, Bernard Madoff's secretary; Daniel Bonventre, director of operations for investments; JoAnn Crupi, an account manager; and Jerome O'Hara and George Perez, both computer programmers convicted of conspiracy to defraud clients, securities fraud, and falsifying the books and records.
05/19/14 Credit Suisse, which has an investment bank branch in NYC, agrees to plead guilty and pay appx. $2.6 billion penalties for helping wealthy Americans hide wealth and avoid taxes.
09/08/14 Matthew Martoma, convicted SAC trader, sentenced to 9 years in prison plus forfeiture of $9.3 million, including home and bank accounts
[HR width=95%]
[center]
[font size=3][font color=red]This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.[/font][/font][/font color=red][font color=black]
21 replies
= new reply since forum marked as read
= new reply since forum marked as read
http://www.informationclearinghouse.info/article42497.htm
This article establishes that the price of gold and silver in the futures markets in which cash is the predominant means of settlement is inconsistent with the conditions of supply and demand in the actual physical or current market where physical bullion is bought and sold as opposed to transactions in uncovered paper claims to bullion in the futures markets. The supply of bullion in the futures markets is increased by printing uncovered contracts representing claims to gold. This artificial, indeed fraudulent, increase in the supply of paper bullion contracts drives down the price in the futures market despite high demand for bullion in the physical market and constrained supply. We will demonstrate with economic analysis and empirical evidence that the bear market in bullion is an artificial creation. The law of supply and demand is the basis of economics. Yet the price of gold and silver in the Comex futures market, where paper contracts representing 100 troy ounces of gold or 5,000 ounces of silver are traded, is inconsistent with the actual supply and demand conditions in the physical market for bullion. For four years the price of bullion has been falling in the futures market despite rising demand for possession of the physical metal and supply constraints.
A decline in demand or an increase in supply is not what we are observing in the gold and silver physical markets. The price of bullion in the futures market has been falling as demand for physical bullion increases and supply experiences constraints. What we are seeing in the physical market indicates a rising price. Yet in the futures market in which almost all contracts are settled in cash and not with bullion deliveries, the price is falling. For example, on July 7, 2015, the U.S. Mint said that due to a “significant” increase in demand, it had sold out of Silver Eagles (one ounce silver coin) and was suspending sales until some time in August. The premiums on the coins (the price of the coin above the price of the silver) rose, but the spot price of silver fell 7 percent to its lowest level of the year (as of July 7).
This is the second time in 9 months that the U.S. Mint could not keep up with market demand and had to suspend sales. During the first 5 months of 2015, the U.S. Mint had to ration sales of Silver Eagles. According to Reuters, since 2013 the U.S. Mint has had to ration silver coin sales for 18 months. In 2013 the Royal Canadian Mint announced the rationing of its Silver Maple Leaf coins: “We are carefully managing supply in the face of very high demand. . . . Coming off strong sales volumes in December 2012, demand to date remains very strong for our Silver Maple Leaf and Gold Maple Leaf bullion coins.” During this entire period when mints could not keep up with demand for coins, the price of silver consistently fell on the Comex futures market. On July 24, 2015 the price of gold in the futures market fell to its lowest level in 5 years despite an increase in the demand for gold in the physical market. On that day U.S. Mint sales of Gold Eagles (one ounce gold coin) were the highest in more than two years, yet the price of gold fell in the futures market.
How can this be explained? The financial press says that the drop in precious metals prices unleashed a surge in global demand for coins. This explanation is nonsensical to an economist. Price is not a determinant of demand but of quantity demanded. A lower price does not shift the demand curve. Moreover, if demand increases, price goes up, not down. Perhaps what the financial press means is that the lower price resulted in an increase in the quantity demanded. If so, what caused the lower price? In economic analysis, the answer would have to be an increase in supply, either new supplies from new discoveries and new mines or mining technology advances that lower the cost of producing bullion. There are no reports of any such supply increasing developments. To the contrary, the lower prices of bullion have been causing reductions in mining output as falling prices make existing operations unprofitable.
There are abundant other signs of high demand for bullion, yet the prices continue their four-year decline on the Comex. Even as massive uncovered shorts (sales of gold contracts that are not covered by physical bullion) on the bullion futures market are driving down price, strong demand for physical bullion has been depleting the holdings of GLD, the largest exchange traded gold fund. Since February 27, 2015, the authorized bullion banks (principally JPMorganChase, HSBC, and Scotia) have removed 10 percent of GLD’s gold holdings. Similarly, strong demand in China and India has resulted in a 19% increase of purchases from the Shanghai Gold Exchange, a physical bullion market, during the first quarter of 2015. Through the week ending July 10, 2015, purchases from the Shanghai Gold Exchange alone are occurring at an annualized rate approximately equal to the annual supply of global mining output.
India’s silver imports for the first four months of 2015 are 30% higher than 2014. In the first quarter of 2015 Canadian Silver Maple Leaf sales increased 8.5% compared to sales for the same period of 2014. Sales of Gold Eagles in June, 2015, were more than triple the sales for May. During the first 10 days of July, Gold Eagles sales were 2.5 times greater than during the first 10 days of June.
Clearly the demand for physical metal is very high, and the ability to meet this demand is constrained. Yet, the prices of bullion in the futures market have consistently fallen during this entire period. The only possible explanation is manipulation. Precious metal prices are determined in the futures market, where paper contracts representing bullion are settled in cash, not in markets where the actual metals are bought and sold. As the Comex is predominantly a cash settlement market, there is little risk in uncovered contracts (an uncovered contract is a promise to deliver gold that the seller of the contract does not possess). This means that it is easy to increase the supply of gold in the futures market where price is established simply by printing uncovered (naked) contracts. Selling naked shorts is a way to artificially increase the supply of bullion in the futures market where price is determined. The supply of paper contracts representing gold increases, but not the supply of physical bullion.
As we have documented on a number of occasions (see, for example, http://www.paulcraigroberts.org/2014/12/22/lawless-manipulation-bullion-markets-public-authorities-paul-craig-roberts-dave-kranzler/ ), the prices of bullion are being systematically driven down by the sudden appearance and sale during thinly traded times of day and night of uncovered future contracts representing massive amounts of bullion. In the space of a few minutes or less massive amounts of gold and silver shorts are dumped into the Comex market, dramatically increasing the supply of paper claims to bullion. If purchasers of these shorts stood for delivery, the Comex would fail. Comex bullion futures are used for speculation and by hedge funds to manage the risk/return characteristics of metrics like the Sharpe Ratio. The hedge funds are concerned with indexing the price of gold and silver and not with the rate of return performance of their bullion contracts.
A rational speculator faced with strong demand for bullion and constrained supply would not short the market. Moreover, no rational actor who wished to unwind a large gold position would dump the entirety of his position on the market all at once. What then explains the massive naked shorts that are hurled into the market during thinly traded times? The bullion banks are the primary market-makers in bullion futures. They are also clearing members of the Comex, which gives them access to data such as the positions of the hedge funds and the prices at which stop-loss orders are triggered. They time their sales of uncovered shorts to trigger stop-loss sales and then cover their short sales by purchasing contracts at the price that they have forced down, pocketing the profits from the manipulation. The manipulation is obvious. The question is why do the authorities tolerate it?
Perhaps the answer is that a free gold market serves both to protect against the loss of a fiat currency’s purchasing power from exchange rate decline and inflation and as a warning that destabilizing systemic events are on the horizon. The current round of on-going massive short sales compressed into a few minutes during thinly traded periods began after gold hit $1,900 per ounce in response to the build-up of troubled debt and the Federal Reserve’s policy of Quantitative Easing. Washington’s power is heavily dependent on the role of the dollar as world reserve currency. The rising dollar price of gold indicated rising discomfort with the dollar. Whereas the dollar’s exchange value is carefully managed with help from the Japanese and European central banks, the supply of such help is not unlimited. If gold kept moving up, exchange rate weakness was likely to show up in the dollar, thus forcing the Fed off its policy of using QE to rescue the “banks too big to fail.”
The bullion banks’ attack on gold is being augmented with a spate of stories in the financial media denying any usefulness of gold. On July 17 the Wall Street Journal declared that honesty about gold requires recognition that gold is nothing but a pet rock. Other commentators declare gold to be in a bear market despite the strong demand for physical metal and supply constraints, and some influential party is determined that gold not be regarded as money. Why a sudden spate of claims that gold is not money? Gold is considered a part of the United States’ official monetary reserves, which is also the case for central banks and the IMF. The IMF accepts gold as repayment for credit extended. The US Treasury’s Office of the Comptroller of the Currency classifies gold as a currency, as can be seen in the OCC’s latest quarterly report on bank derivatives activities in which the OCC places gold futures in the foreign exchange derivatives classification.
The manipulation of the gold price by injecting large quantities of freshly printed uncovered contracts into the Comex market is an empirical fact. The sudden debunking of gold in the financial press is circumstantial evidence that a full-scale attack on gold’s function as a systemic warning signal is underway. It is unlikely that regulatory authorities are unaware of the fraudulent manipulation of bullion prices. The fact that nothing is done about it is an indication of the lawlessness that prevails in US financial markets.
Paul Craig Roberts, Ph.D., is a former Assistant Secretary of the U.S. Treasury.
Dave Kranzler is a University of Chicago MBA and is an active participant in financial markets.
This article establishes that the price of gold and silver in the futures markets in which cash is the predominant means of settlement is inconsistent with the conditions of supply and demand in the actual physical or current market where physical bullion is bought and sold as opposed to transactions in uncovered paper claims to bullion in the futures markets. The supply of bullion in the futures markets is increased by printing uncovered contracts representing claims to gold. This artificial, indeed fraudulent, increase in the supply of paper bullion contracts drives down the price in the futures market despite high demand for bullion in the physical market and constrained supply. We will demonstrate with economic analysis and empirical evidence that the bear market in bullion is an artificial creation. The law of supply and demand is the basis of economics. Yet the price of gold and silver in the Comex futures market, where paper contracts representing 100 troy ounces of gold or 5,000 ounces of silver are traded, is inconsistent with the actual supply and demand conditions in the physical market for bullion. For four years the price of bullion has been falling in the futures market despite rising demand for possession of the physical metal and supply constraints.
We begin with a review of basics. The vertical axis measures price. The horizontal axis measures quantity. Demand curves slope down to the right, the quantity demanded increasing as price falls. Supply curves slope upward to the right, the quantity supplied rising with price. The intersection of supply with demand determines price. (Graph 1)
A change in quantity demanded or in the quantity supplied refers to a movement along a given curve. A change in demand or a change in supply refers to a shift in the curves. For example, an increase in demand (a shift to the right of the demand curve) causes a movement along the supply curve (an increase in the quantity supplied).
Changes in income and changes in tastes or preferences toward an item can cause the demand curve to shift. For example, if people expect that their fiat currency is going to lose value, the demand for gold and silver would increase (a shift to the right).
Changes in technology and resources can cause the supply curve to shift. New gold discoveries and improvements in gold mining technology would cause the supply curve to shift to the right. Exhaustion of existing mines would cause a reduction in supply (a shift to the left).
What can cause the price of gold to fall? Two things: The demand for gold can fall, that is, the demand curve could shift to the left, intersecting the supply curve at a lower price. The fall in demand results in a reduction in the quantity supplied. A fall in demand means that people want less gold at every price. (Graph 2)
Alternatively, supply could increase, that is, the supply curve could shift to the right, intersecting the demand curve at a lower price. The increase in supply results in an increase in the quantity demanded. An increase in supply means that more gold is available at every price. (Graph 3)
To summarize: a decline in the price of gold can be caused by a decline in the demand for gold or by an increase in the supply of gold.
A change in quantity demanded or in the quantity supplied refers to a movement along a given curve. A change in demand or a change in supply refers to a shift in the curves. For example, an increase in demand (a shift to the right of the demand curve) causes a movement along the supply curve (an increase in the quantity supplied).
Changes in income and changes in tastes or preferences toward an item can cause the demand curve to shift. For example, if people expect that their fiat currency is going to lose value, the demand for gold and silver would increase (a shift to the right).
Changes in technology and resources can cause the supply curve to shift. New gold discoveries and improvements in gold mining technology would cause the supply curve to shift to the right. Exhaustion of existing mines would cause a reduction in supply (a shift to the left).
What can cause the price of gold to fall? Two things: The demand for gold can fall, that is, the demand curve could shift to the left, intersecting the supply curve at a lower price. The fall in demand results in a reduction in the quantity supplied. A fall in demand means that people want less gold at every price. (Graph 2)
Alternatively, supply could increase, that is, the supply curve could shift to the right, intersecting the demand curve at a lower price. The increase in supply results in an increase in the quantity demanded. An increase in supply means that more gold is available at every price. (Graph 3)
To summarize: a decline in the price of gold can be caused by a decline in the demand for gold or by an increase in the supply of gold.
A decline in demand or an increase in supply is not what we are observing in the gold and silver physical markets. The price of bullion in the futures market has been falling as demand for physical bullion increases and supply experiences constraints. What we are seeing in the physical market indicates a rising price. Yet in the futures market in which almost all contracts are settled in cash and not with bullion deliveries, the price is falling. For example, on July 7, 2015, the U.S. Mint said that due to a “significant” increase in demand, it had sold out of Silver Eagles (one ounce silver coin) and was suspending sales until some time in August. The premiums on the coins (the price of the coin above the price of the silver) rose, but the spot price of silver fell 7 percent to its lowest level of the year (as of July 7).
This is the second time in 9 months that the U.S. Mint could not keep up with market demand and had to suspend sales. During the first 5 months of 2015, the U.S. Mint had to ration sales of Silver Eagles. According to Reuters, since 2013 the U.S. Mint has had to ration silver coin sales for 18 months. In 2013 the Royal Canadian Mint announced the rationing of its Silver Maple Leaf coins: “We are carefully managing supply in the face of very high demand. . . . Coming off strong sales volumes in December 2012, demand to date remains very strong for our Silver Maple Leaf and Gold Maple Leaf bullion coins.” During this entire period when mints could not keep up with demand for coins, the price of silver consistently fell on the Comex futures market. On July 24, 2015 the price of gold in the futures market fell to its lowest level in 5 years despite an increase in the demand for gold in the physical market. On that day U.S. Mint sales of Gold Eagles (one ounce gold coin) were the highest in more than two years, yet the price of gold fell in the futures market.
How can this be explained? The financial press says that the drop in precious metals prices unleashed a surge in global demand for coins. This explanation is nonsensical to an economist. Price is not a determinant of demand but of quantity demanded. A lower price does not shift the demand curve. Moreover, if demand increases, price goes up, not down. Perhaps what the financial press means is that the lower price resulted in an increase in the quantity demanded. If so, what caused the lower price? In economic analysis, the answer would have to be an increase in supply, either new supplies from new discoveries and new mines or mining technology advances that lower the cost of producing bullion. There are no reports of any such supply increasing developments. To the contrary, the lower prices of bullion have been causing reductions in mining output as falling prices make existing operations unprofitable.
There are abundant other signs of high demand for bullion, yet the prices continue their four-year decline on the Comex. Even as massive uncovered shorts (sales of gold contracts that are not covered by physical bullion) on the bullion futures market are driving down price, strong demand for physical bullion has been depleting the holdings of GLD, the largest exchange traded gold fund. Since February 27, 2015, the authorized bullion banks (principally JPMorganChase, HSBC, and Scotia) have removed 10 percent of GLD’s gold holdings. Similarly, strong demand in China and India has resulted in a 19% increase of purchases from the Shanghai Gold Exchange, a physical bullion market, during the first quarter of 2015. Through the week ending July 10, 2015, purchases from the Shanghai Gold Exchange alone are occurring at an annualized rate approximately equal to the annual supply of global mining output.
India’s silver imports for the first four months of 2015 are 30% higher than 2014. In the first quarter of 2015 Canadian Silver Maple Leaf sales increased 8.5% compared to sales for the same period of 2014. Sales of Gold Eagles in June, 2015, were more than triple the sales for May. During the first 10 days of July, Gold Eagles sales were 2.5 times greater than during the first 10 days of June.
Clearly the demand for physical metal is very high, and the ability to meet this demand is constrained. Yet, the prices of bullion in the futures market have consistently fallen during this entire period. The only possible explanation is manipulation. Precious metal prices are determined in the futures market, where paper contracts representing bullion are settled in cash, not in markets where the actual metals are bought and sold. As the Comex is predominantly a cash settlement market, there is little risk in uncovered contracts (an uncovered contract is a promise to deliver gold that the seller of the contract does not possess). This means that it is easy to increase the supply of gold in the futures market where price is established simply by printing uncovered (naked) contracts. Selling naked shorts is a way to artificially increase the supply of bullion in the futures market where price is determined. The supply of paper contracts representing gold increases, but not the supply of physical bullion.
As we have documented on a number of occasions (see, for example, http://www.paulcraigroberts.org/2014/12/22/lawless-manipulation-bullion-markets-public-authorities-paul-craig-roberts-dave-kranzler/ ), the prices of bullion are being systematically driven down by the sudden appearance and sale during thinly traded times of day and night of uncovered future contracts representing massive amounts of bullion. In the space of a few minutes or less massive amounts of gold and silver shorts are dumped into the Comex market, dramatically increasing the supply of paper claims to bullion. If purchasers of these shorts stood for delivery, the Comex would fail. Comex bullion futures are used for speculation and by hedge funds to manage the risk/return characteristics of metrics like the Sharpe Ratio. The hedge funds are concerned with indexing the price of gold and silver and not with the rate of return performance of their bullion contracts.
A rational speculator faced with strong demand for bullion and constrained supply would not short the market. Moreover, no rational actor who wished to unwind a large gold position would dump the entirety of his position on the market all at once. What then explains the massive naked shorts that are hurled into the market during thinly traded times? The bullion banks are the primary market-makers in bullion futures. They are also clearing members of the Comex, which gives them access to data such as the positions of the hedge funds and the prices at which stop-loss orders are triggered. They time their sales of uncovered shorts to trigger stop-loss sales and then cover their short sales by purchasing contracts at the price that they have forced down, pocketing the profits from the manipulation. The manipulation is obvious. The question is why do the authorities tolerate it?
Perhaps the answer is that a free gold market serves both to protect against the loss of a fiat currency’s purchasing power from exchange rate decline and inflation and as a warning that destabilizing systemic events are on the horizon. The current round of on-going massive short sales compressed into a few minutes during thinly traded periods began after gold hit $1,900 per ounce in response to the build-up of troubled debt and the Federal Reserve’s policy of Quantitative Easing. Washington’s power is heavily dependent on the role of the dollar as world reserve currency. The rising dollar price of gold indicated rising discomfort with the dollar. Whereas the dollar’s exchange value is carefully managed with help from the Japanese and European central banks, the supply of such help is not unlimited. If gold kept moving up, exchange rate weakness was likely to show up in the dollar, thus forcing the Fed off its policy of using QE to rescue the “banks too big to fail.”
The bullion banks’ attack on gold is being augmented with a spate of stories in the financial media denying any usefulness of gold. On July 17 the Wall Street Journal declared that honesty about gold requires recognition that gold is nothing but a pet rock. Other commentators declare gold to be in a bear market despite the strong demand for physical metal and supply constraints, and some influential party is determined that gold not be regarded as money. Why a sudden spate of claims that gold is not money? Gold is considered a part of the United States’ official monetary reserves, which is also the case for central banks and the IMF. The IMF accepts gold as repayment for credit extended. The US Treasury’s Office of the Comptroller of the Currency classifies gold as a currency, as can be seen in the OCC’s latest quarterly report on bank derivatives activities in which the OCC places gold futures in the foreign exchange derivatives classification.
The manipulation of the gold price by injecting large quantities of freshly printed uncovered contracts into the Comex market is an empirical fact. The sudden debunking of gold in the financial press is circumstantial evidence that a full-scale attack on gold’s function as a systemic warning signal is underway. It is unlikely that regulatory authorities are unaware of the fraudulent manipulation of bullion prices. The fact that nothing is done about it is an indication of the lawlessness that prevails in US financial markets.
Paul Craig Roberts, Ph.D., is a former Assistant Secretary of the U.S. Treasury.
Dave Kranzler is a University of Chicago MBA and is an active participant in financial markets.
http://www.bloomberg.com/news/articles/2015-07-29/we-just-got-some-new-data-on-america-s-student-loan-burden
Thanks to a push by President Barack Obama's administration, more and more student-loan borrowers are signing up for income-driven repayment programs, allowing them to pay a fraction of what they would otherwise owe.
That's been making their debt more affordable each month but also longer-lasting (since the balances aren't getting paid down as much or at all and could even increase—although the balances can eventually be forgiven, in some cases after 20 years). The repayment slowdown is filtering into the bond market, where credit graders are now considering downgrades on almost $40 billion of securities tied to government-backed loans because the bonds might not pay off by their promised maturities.
As a result of bond investors getting nervous about potential technical defaults, we're getting some new data from Navient on exactly how many borrowers have been tapping the government programs. Here's how it looks for some of the company's bond trusts holding student loans, according to charts from Deutsche Bank analysts Elen Callahan and Kayvan Darouian:
These securitizations are backed by loans that are 97 percent insured by the government—bond deals that used to be common before Congress passed legislation in 2010 that ended U.S. guarantees of new loans in favor of direct federal lending.
While the use of income-driven repayment plans on direct loans is disclosed by the Department of Education, that's not the case for more than $300 billion of remaining insured ones made under the defunct Federal Family Education Loan Program, or FFELP.
This chart offers previously available data on the increasing use of the plans in the direct loan portfolio, which accounts for most of the nearly $1.2 trillion in federal student loans.
The relief for individual FFELP borrowers is shown to be significant in the new data from Navient, the loan servicer formerly part of a company known as Sallie Mae.
The average new payment by student-loan borrowers in the Navient bonds is about 20 percent of the amount scheduled under full repayment, according to the Deutsche Bank analysts.
Thanks to a push by President Barack Obama's administration, more and more student-loan borrowers are signing up for income-driven repayment programs, allowing them to pay a fraction of what they would otherwise owe.
That's been making their debt more affordable each month but also longer-lasting (since the balances aren't getting paid down as much or at all and could even increase—although the balances can eventually be forgiven, in some cases after 20 years). The repayment slowdown is filtering into the bond market, where credit graders are now considering downgrades on almost $40 billion of securities tied to government-backed loans because the bonds might not pay off by their promised maturities.
As a result of bond investors getting nervous about potential technical defaults, we're getting some new data from Navient on exactly how many borrowers have been tapping the government programs. Here's how it looks for some of the company's bond trusts holding student loans, according to charts from Deutsche Bank analysts Elen Callahan and Kayvan Darouian:
These securitizations are backed by loans that are 97 percent insured by the government—bond deals that used to be common before Congress passed legislation in 2010 that ended U.S. guarantees of new loans in favor of direct federal lending.
While the use of income-driven repayment plans on direct loans is disclosed by the Department of Education, that's not the case for more than $300 billion of remaining insured ones made under the defunct Federal Family Education Loan Program, or FFELP.
This chart offers previously available data on the increasing use of the plans in the direct loan portfolio, which accounts for most of the nearly $1.2 trillion in federal student loans.
The relief for individual FFELP borrowers is shown to be significant in the new data from Navient, the loan servicer formerly part of a company known as Sallie Mae.
The average new payment by student-loan borrowers in the Navient bonds is about 20 percent of the amount scheduled under full repayment, according to the Deutsche Bank analysts.
http://qz.com/460482/heres-what-your-stolen-identity-goes-for-on-the-internets-black-market/
The going rate for a stolen identity is about twenty bucks.
Tens of millions of people have lost their private information in data breaches over the past few years. But what happens after that—how the data are leveraged for financial gain—remains murky. Many of those stolen records end up for sale on the anonymous, seedy area of the internet commonly known as the dark web.
Analyzing the sale of those records sheds some light on the vibrant market for stolen identities. On the dark web’s eBay-like marketplaces, the full set of someone’s personal information—identification number, address, birthdate, etc.—are known as “fullz.” We analyzed listings for individual fullz that were put up for sale over the past year, using data collected by Grams, a search engine for the dark web. Our question: How much is a stolen identity worth?
Among tens of thousands of records in the Grams data, we were able to identify more than 600 listings for individual identities—some including credit card information, others without. The listings ranged in price from less than $1 to about $450, converted from bitcoin. The median price for someone’s identity was $21.35.
?w=640
The market for your data
Though the transactions are usually illegal, marketplaces on the dark web function much like those on the popular internet. Prices for stolen identities vary based on factors like quality, reliability, robustness, and the seller’s reputation.
The most expensive fullz we examined, from a vendor called “OsamaBinFraudin,” was listed at $454.05. The vendor explained in the listing that this was a premium identity with a high credit score:
hello this ad if for usa profiles that have been freshly created and already currently have 720 credit scores or higher with no current bad history and no fraud alert you can use profiles for your own identity to get loans cars housing anything u can use a identity with perfect credit the profile will come with full name addresses associated with profile ssn dob credit karma login to verfiy credit score price is high because these profiles are pre built and already have high credit scores and you can use these identities as your own long as you like
The second most expensive identity, at $248.22, came with an American Express card that the vendor claimed had a $10,000 limit:
Amex CC Account Fullz Balance 10K
Once you place the order you ll have a first hand Account with American Express Full information Account Simple Login Information User ID Password Billing Information Name Surname Address City Zip Code State Phone Number Birth Day Birth Month Birth Year Place of Birth Social Security Number Mother s Maiden Name Mother s Date of Birth Credit Card Information Credit Card Number Exp Date Name On Card CVV2 ATM Pin CSC Pin E mail Information E mail Address Password
Listings on the lower end were typically less glamorous. They included only the basics, like the victim’s name, address, social security number, perhaps a mother’s maiden name. In these listings, vendors did not offer assurances of good credit scores or credit card limits, and in some cases they were selling identities with “dead,” non-working credit cards. This description of a $2 identity, from vendor “mrq1234,” explains that these are valuable for people in-the-know:
In general, fullz containing credit scores were listed at higher prices. Fullz with dead cards went for considerably lower amounts.
?w=640
Easy to navigate
Marketplaces on the dark web, not unlike eBay, have feedback systems for vendors (“cheap and good A+”), refund policies (usually stating that refunds are not allowed), and even well-labeled sections. There are no special codewords to learn, no back-channels that must be sussed out. On the AlphaBay market, for example, one can just click on the button marked “Fraud,” then into subsections like “Personal Information & Scans” or “CVV & Cards.”
?w=640&h=347
It’s impossible to verify whether listings for identities on the black market, including the ones we analyzed, correspond to real people or are themselves fraudulent. It’s also difficult to determine where the data originated. Some vendors claim their fullz come from specific sources (“Limited supply of these ultra fresh Turbo Tax profile[s]”) or allude to vague ones (“This listing is for hacked UK fullz straight out of a payment processor”), but it’s not uncommon for these kinds of claims to be bogus.
In June, for example, a text file was passed around a black market message board, claiming to hold records from the breach of the US government’s Office of Personnel Management, and the nature of the data seemed to line up with the claim. But reporter Brian Krebs later discovered the records had actually come from a different government agency. Usually, we don’t know where data from large breaches ends up, or where black market identities come from, unless someone is arrested.
One such person, who was arrested in 2012 and sentenced to 13 years in prison earlier this month, procured the identities he sold online in one of the largest data breaches on record. Hieu Minh Ngo, a Vietnamese national, obtained access to 200 million records, complete with social security numbers, from a company called Court Ventures, which is owned by Experian.
Ngo’s case proves that the business of stealing identities in vast numbers and selling them through online marketplaces can indeed be extremely lucrative. He netted more than $1.9 million from selling the records, according to a prosecutor at Ngo’s plea hearing....
MORE---UTTERLY APPALLING AND HORRIBLY FASCINATING
The going rate for a stolen identity is about twenty bucks.
Tens of millions of people have lost their private information in data breaches over the past few years. But what happens after that—how the data are leveraged for financial gain—remains murky. Many of those stolen records end up for sale on the anonymous, seedy area of the internet commonly known as the dark web.
Analyzing the sale of those records sheds some light on the vibrant market for stolen identities. On the dark web’s eBay-like marketplaces, the full set of someone’s personal information—identification number, address, birthdate, etc.—are known as “fullz.” We analyzed listings for individual fullz that were put up for sale over the past year, using data collected by Grams, a search engine for the dark web. Our question: How much is a stolen identity worth?
Among tens of thousands of records in the Grams data, we were able to identify more than 600 listings for individual identities—some including credit card information, others without. The listings ranged in price from less than $1 to about $450, converted from bitcoin. The median price for someone’s identity was $21.35.
?w=640
The market for your data
Though the transactions are usually illegal, marketplaces on the dark web function much like those on the popular internet. Prices for stolen identities vary based on factors like quality, reliability, robustness, and the seller’s reputation.
The most expensive fullz we examined, from a vendor called “OsamaBinFraudin,” was listed at $454.05. The vendor explained in the listing that this was a premium identity with a high credit score:
hello this ad if for usa profiles that have been freshly created and already currently have 720 credit scores or higher with no current bad history and no fraud alert you can use profiles for your own identity to get loans cars housing anything u can use a identity with perfect credit the profile will come with full name addresses associated with profile ssn dob credit karma login to verfiy credit score price is high because these profiles are pre built and already have high credit scores and you can use these identities as your own long as you like
The second most expensive identity, at $248.22, came with an American Express card that the vendor claimed had a $10,000 limit:
Amex CC Account Fullz Balance 10K
Once you place the order you ll have a first hand Account with American Express Full information Account Simple Login Information User ID Password Billing Information Name Surname Address City Zip Code State Phone Number Birth Day Birth Month Birth Year Place of Birth Social Security Number Mother s Maiden Name Mother s Date of Birth Credit Card Information Credit Card Number Exp Date Name On Card CVV2 ATM Pin CSC Pin E mail Information E mail Address Password
Listings on the lower end were typically less glamorous. They included only the basics, like the victim’s name, address, social security number, perhaps a mother’s maiden name. In these listings, vendors did not offer assurances of good credit scores or credit card limits, and in some cases they were selling identities with “dead,” non-working credit cards. This description of a $2 identity, from vendor “mrq1234,” explains that these are valuable for people in-the-know:
Here s the listing for x1 DEAD UK fullz Please be clear on the fact that you will be receiving a dead card In some cases the card maybe live but we will not be checking or guaranteeing this The information provided can be used to take out phones lines of credit etc The people out there who know how to monetize such information will have a field day with this
In general, fullz containing credit scores were listed at higher prices. Fullz with dead cards went for considerably lower amounts.
?w=640
Easy to navigate
Marketplaces on the dark web, not unlike eBay, have feedback systems for vendors (“cheap and good A+”), refund policies (usually stating that refunds are not allowed), and even well-labeled sections. There are no special codewords to learn, no back-channels that must be sussed out. On the AlphaBay market, for example, one can just click on the button marked “Fraud,” then into subsections like “Personal Information & Scans” or “CVV & Cards.”
?w=640&h=347
It’s impossible to verify whether listings for identities on the black market, including the ones we analyzed, correspond to real people or are themselves fraudulent. It’s also difficult to determine where the data originated. Some vendors claim their fullz come from specific sources (“Limited supply of these ultra fresh Turbo Tax profile[s]”) or allude to vague ones (“This listing is for hacked UK fullz straight out of a payment processor”), but it’s not uncommon for these kinds of claims to be bogus.
In June, for example, a text file was passed around a black market message board, claiming to hold records from the breach of the US government’s Office of Personnel Management, and the nature of the data seemed to line up with the claim. But reporter Brian Krebs later discovered the records had actually come from a different government agency. Usually, we don’t know where data from large breaches ends up, or where black market identities come from, unless someone is arrested.
One such person, who was arrested in 2012 and sentenced to 13 years in prison earlier this month, procured the identities he sold online in one of the largest data breaches on record. Hieu Minh Ngo, a Vietnamese national, obtained access to 200 million records, complete with social security numbers, from a company called Court Ventures, which is owned by Experian.
Ngo’s case proves that the business of stealing identities in vast numbers and selling them through online marketplaces can indeed be extremely lucrative. He netted more than $1.9 million from selling the records, according to a prosecutor at Ngo’s plea hearing....
MORE---UTTERLY APPALLING AND HORRIBLY FASCINATING
