Monday, May 20, 2013

Hong Kong Mercantile Exchange to Close Monday, Gold and Silver Paper Contracts will have Cash Settlements

The Hong Kong Mercantile Exchange (HKMEx) announces today it has decided to voluntarily surrender the authorisation to provide automated trading services (“ATS”) granted by the Securities and Futures Commission (“the SFC”).
With immediate effect, no new orders may be placed and all open positions will be financially settled at the settlement price determined by HKMEx and its designated clearinghouse.
The voluntary surrender decision was made to enable the Exchange to re-align its strategy with the new industry environment since its trading revenues have not been sufficient to support operating expenses and, as a result, its inability to meet the required regulatory financial conditions.(more)
Please share this article

The Decline and Fall of Canada. Prepare Yourself Accordingly ~ Stefan Molyneux

Please share this article

DFC Global Corp (NASDAQ: DLLR)

DFC Global Corp., through its subsidiaries, provides retail financial services to unbanked and under-banked consumers, and small businesses. The company's primary products and services include unsecured short-term consumer loans, secured pawn lending, check cashing, gold buying, and Western Union money transfer and money order, as well as foreign currency exchange, reloadable VISA prepaid debit cards, and electronic tax filing. It also offers military installment loan and education services, such as fee based services to enlisted military personnel applying for loans to purchase new and used vehicles. The company provides its products and services through retail storefront locations, as well as through the Internet, mobile phone, and other remote platforms. As of August 22, 2012, it operated through a network of approximately 1,400 retail storefront locations. The company operates its locations primarily under the Money Mart, The Money Shop, InstaCheques, Suttons and Robertsons, The Check Cashing Store, Sefina, Helsingin Pantti, MoneyNow!, and Super Efectivo brand names in the United Kingdom, Canada, the United States, Sweden, Finland, Poland, Spain, and the Republic of Ireland.
To analyze the company's stock for potential trading opportunities, please take a look at the 1-year chart of DLLR (DFC Global Corporation) below with my added notations:
1-year chart of DLLR (DFC Global Corporation) Prior to April, DLLR had been holding a key level of support at $15 (blue), which it eventually broke. Since then, the stock has consolidated sideways while finding support at $13 (green). DLLR has already hit the previous $15 level of support once as resistance, but a break back above that $15 level should mean higher prices for the stock.
The Tale of the Tape: DLLR has a key level at $15 and $13. A long position could be entered at $13 or on a break back above $15. A short play could be made on a break below $13.
Please share this article

Toyota Pulls Bond Deal Due To Soaring Yields: The Japanese "VaR Shock" Feedback Loop Is Back

Despite the eagerness of Abenomics and the new BOJ head Kuroda to have their cake and eat it too, in this case manifesting in soaring stock prices, plunging Yen, rising GDP and exports, and most importantly, flat or declining bond yields, so far they have succeeded in carrying out three of the four (assuming Japanese economic data reporting is more accurate than that of its neighbor China), as it is physically impossible for any central planner to completely overrule the laws of math, economics and physics indefinitely. In this vein, we have described on numerous occasions in the past several days the shock to the system that the massive one-way transfer out of all asset classes and into equities has engendered, and resulted in several JGB futures trading halts in an attempt to normalize a market where bond volatility has suddenly exploded. Volatility aside (and it shouldn't be as the below section from JPM explains), the recent surge in yields higher is finally starting to take its tool on domestic bond issuers. As Bloomberg reports, already two names have pulled deals from the jittery bond market due to "soaring" borrowing costs. The first is Toyota Industries which as NHK reported, canceled the sale of JPY20 billion debt. Toyota is among Japanese firms that put off selling debt as long-term yields on government debt have risen, increasing borrowing costs, public broadcaster NHK says without citing anyone. Last week JFE Holdings announced it would delay plans to sell bonds due to market volatility. Two names down... and the 10 Year is not even north of 1%. (more)

Please share this article

Is A Force Majeure Of The Comex Gold Exchange Really Just A Tinfoil Hat Theory?

On Thursday Reuters reported again on the tight supply conditions out of Asia. The story in the press has been reported as “high premiums for physical” but in reality the following quote is more descriptive.”Honestly, we don’t have enough physical gold to supply to the Chinese said a dealer in Singapore.  ”This is mad.”
Such stories are widespread and extend even to South Africa. According to the U.S. Census Bureau’s foreign trade division, 20,013 kilograms of unwrought gold worth $982 million left New York’s Kennedy International Airport for somewhere in South Africa ["Is South African Mint Short of Gold?"].

I’ve been posting articles on the complete stoppage of delivery to the Shanghai  Gold Exchange (SGE). Night after night there have been no deliveries made. The gold is “somewhere else.” Thursday, before the Friday POG dump du jour, demand was picking up again as 19,527 kg traded in the Au 9999 class. Then ignoring Chinese demand after the Shanghai closes, the bear raids commence. At least Chinese grannies who missed the first swoon will get a second chance. With the extreme storage of actual gold available — if we get another spike over 25,000 kg in SGE demand — the paper gold tigers kiss their crazy asses goodbye.

The other story that gets big play in the American press is the large-scale dumping of the gold ETF by institutional investors. This is now an old story. The GLD ETF coughed up 96,000 oz in Friday’s rout. That’s not completely inconsequential, but since I’m  convinced that this bear attack is designed to spook ETF holders out of gold shares that can be exchanged in 100,000 share lots for physical, this is really not much of a take. So the whole institutional dumping story is exaggerated at this point. The way the market traded Friday, I was expecting more. The managed-money Boyz may have spit out some more paper contracts, but those players are already at the lowest levels of paper gold exposure since the gold bottom of late 2008 (see last chart). (more)
Please share this article

US Weekly Economic Calendar

time (et) report period Actual CONSENSUS
8:30 am Chicago Fed national activity index April   -- -0.23
TUESDAY, may 21
  None scheduled        
10 am Existing home sales April
5.00 mln 4.92 mln
10 am Bernanke testimony to JEC        
2 pm FOMC minutes 4/30-5/1   -- --
8:30 am Weekly jobless claims 5/18
345,000 360,000
9 am Markit flash PMI May   -- 52.1
10 am New home sales April   430,000 417,000
10 am FHFA home price index March   -- 0.7%
8:30 am Durable goods orders April   1.5% -6.9%
Please share this article