Golden Minerals Company

Jamie Dimon said it could get worse...and it is.

The JP Morgan trading loss that was $2 billion four days ago is now $3 billion, report Nelson Schwartz and Jessica Silver-Greenberg in The New York Times.

Why?

Because every hedge fund in the world knows JP Morgan is stuck in a position so big that it can't unwind it... and they're taking the other side of the trade.

Great shades of LTCM...as this is precisely what happened to them when they tried to get out of all their losing trades. Eric Sprott's comments about further loses by JPMorgan in his New York speech yesterday were prophetic. This story was posted on the businessinsider.com website late yesterday evening...and it's worth the read. I thank Roy Stephens for sending this...and the link is here.

It pays to be rich, powerful and a Democrat with friends in Washington. While Anna Gristina, a Connecticut mother accused of being a New York “madam” sits in a cell on Riker’s Island, Jon Corzine, the former CEO of MF Global sits at home in his New Jersey mansion. MF Global had been a publically traded securities firm with $40 billion in assets, but with liabilities even larger, filed for bankruptcy late last year, after being accused of co-mingling customer funds with its own, a flagrant violation of securities law.

As we all know, prostitution is illegal. Ms. Gristina has been charged with providing attractive young women to testosteronic men for money — a crime, but largely victim-less. Nevertheless, she has already spent two months on Riker’s Island, awaiting a June 21st hearing. Bail for her was set at $2 million in a bond, or $1 million in cash. Despite the misappropriation of an estimated $1.6 billion, Mr. Corzine has yet to be charged. Yet 36,000 clients had their money appropriated under his watch. It is hard not to believe that his status as a former Senator from and Governor of New Jersey, and major bundler for President Obama’s campaign has not provided him special privileges. Is not justice supposed to be blind?

It is hard to imagine that Ms. Gristina, whose business was to introduce consenting adults, could be an enormous risk to society. On the other hand, a wealthy and powerful man who appears to have cheated his clients is a fraud and a menace. MF Global was a public company, until it became the nation’s 8th largest bankruptcy when it filed last October. Thus, not only are customers, for whose funds Mr. Corzine had a fiduciary responsibility, out their money, but shareholders of MF Global lost their investment as well. Of course, it is perfectly possible that the morally challenged Mr. Corzine was unaware that embezzling is a crime. However, as CEO he is responsible for financial transgressions within his firm. It is unfortunate that he is not man enough to admit it.

This most excellent essay showed up over at The Daily Reckoning yesterday...and is a hoot to read! Corzine was also involved in the LTCM debacle as well. As one of the 'rescuers'...he knew all their positions...and he and his firm [Goldman Sachs] were betting heavily against them. This guy is a real piece of work, dear reader. Once again I thank Roy Stephens for sharing this with us...and the link is here.

There was a time when retail investors were mocked and derided by all: after all whenever the big boys needed to unload they jest blew the whistle, and like obedient lap dogs retail would buy at the very peak of the market because "stocks are a once in a lifetime buy", leading to what some call distribution, and others, a plunge. Not any more.

In spite of the recent 20% surge in stocks, following a pattern absolutely identical to the one from September 2010 to March 2011, for the entire 32 week duration of the artificial central bank induced rally beginning October 5, there were a total of 3 weeks of inflows into the market, totaling a whopping $2.8 billion. The outflows: 29 weeks for a total of $96.6 billion, with $2.4 billion pulled out in the most recent week.

This short but worthwhile read was posted over at zerohedge.com yesterday...and the graph is worth the trip all by itself. Make sure you click on it so you can view the whole thing. As reader U.D. said..."Has the electronic casino, a.k.a. the stock market lost a key play...the sheeple?" The link is here.

A pattern that we've observed before is how pathetic the stock market has been behaving these days.

Each day we see periods of downs and ups, but in the end, the market ends down, usually fairly near the lows, with miserable performance in the final hour.

Today was no exception, as a nothing day (that at one point was decently higher after the FOMC minutes came out at 2:00 PM ET), turned into a 0.4% loss.

You've just read three of the four short paragraphs of this businessinsider.com piece from yesterday evening. The graph that accompanies the article is definitely worth a quick look. This is another story courtesy of Roy Stephens...and the link is here.

Minutes of the central bank's April 24-25 meeting released Wednesday stated that "several members" thought additional Fed support could be needed if the recovery lost momentum or if the risks to the economy became great enough.

The minutes did not spell out what circumstances would trigger further Fed efforts to lower interest rates to boost the economy. But they did note some threats to the U.S. economy. One is Europe's debt crisis. Another is the risk that spending cuts and tax increases that could take effect at year's end if Congress can't reach a budget agreement could slow growth more than expected.

The comments stood in contrast to the previous minutes, which said that only "a couple" of members expressed support for further bond purchases. Since the financial crisis, the Fed has pursued two rounds of bond purchases to try to push down long-term interest rates, with a goal of encouraging borrowing and spending.

This usatoday.com piece was posted on their Internet site early yesterday afternoon...and I thank West Virginia reader Elliot Simon for sending it along. The link is here.

Europe’s financial crisis lurched into a perilous new phase as dire predictions emerged of a collapse in Greece’s economy, with a run on its banks bringing an inevitable end to its membership of the euro.

As leaders in Athens accepted the need for a new general election to end a national stalemate, the International Monetary Fund said Europe’s leaders should prepare for the possibility of a Greek departure from the single currency.

Christine Lagarde, head of the IMF, warned she was “technically prepared for anything” and said the utmost effort must be made to ensure any Greek exit was orderly. The effect was likely to be “quite messy” with risks to growth, trade and financial markets. “It is something that would be extremely expensive and would pose great risks but it is part of options that we must technically consider,” she said.

This story was posted on The Telegraph's Internet site on Tuesday evening...and I dug it out of yesterday's King Report...and the link is here.

Greece is no longer the main event. Everyone knows it’s a matter of when, not if, ouzoland leaves the euro. Not least the Greeks themselves, who are pulling euros out of local banks at a right lick in preparation for the glorious return of a cheapo drachma.

Bank deposits, already down from €244bn (£195bn) at December 2009 to €171bn at the end of March, are now being withdrawn at the rate of around €3bn a week. In the real world the exit is underway, as another dive in Greece’s benchmark 10-year bond also indicated. It dropped for the 10th day running to just 14.4 cents on the euro.

Rather than trying to keep Greece in, Europe’s politicos, the ECB and the IMF should be focusing on how to contain the impact of its inevitable exit. And, if IMF chief Christine Lagarde, really is “technically prepared for anything”, she must have a solution for Spain.

This story was posted on the telegraph.co.uk website early yesterday evening...and I thank Roy Stephens for sending it along. The link is here. This is worth reading.

Argentina's quest to keep dollars in the country is spawning illegal money trades inside offices and even schools. But big companies have fewer ways to skirt currency controls and must adapt to the country's offbeat, changeable rules.

As the red tape piles up, businesses face delays and distortions that are hitting private investment. Analysts say the tightened state grip could backfire as an economic slowdown cools consumer and corporate spending.

With limited access to dollars on the formal market, individuals and some small companies go in search of greenbacks on the black market, where costs are rising sharply.

This Reuters piece was filed from Buenos Aires yesterday afternoon...and I thank Roy Stephens for sending it along. The link is here.

The cloud cover of sophistry that has been characteristic of India's Iran policy in recent years lifted on Tuesday when the government admitted in parliament that it had taken a policy decision to reduce oil imports from Iran.

The frank admission came on a day when an emissary from Washington, Carlos Pascual, special envoy on energy matters in the United States State Department, arrived with the proclaimed intention of weaning New Delhi away from Tehran's fuel.

The Barack Obama administration will be delighted that the sustained diplomatic and political pressure on India is finally bearing fruit. Tehran, on the other hand, will view this as the unkindest cut of all the blows that New Delhi has inflicted on it over the past five year. Meanwhile, a protagonist lurking in the shade is all excited - Saudi Arabia.

A mystery lingers. What did the Obama administration promise the Manmohan Singh government as quid pro quo? Manmohan most certainly sensitized US Secretary of State Hillary Clinton of India's "wish list" during her recent hurried visit to hold consultations personally with him just ahead of the US-India Strategic Dialogue co-chaired by her, which is scheduled to convene in Washington.

For those of you interested in the new "Great Game"...this is a must read...and is Roy Stephens last offering in today's column. It's posted over at the Asia Times Internet site...and the link is here.

The first is with Rick Santelli...and it's headlined "Traders Taxing JPMorgan to Exit Losing Postions". The second is with technical analyst Louise Yamada. It's entitled "We Now Have Massive Tops on Global Markets". And lastly is this blog with Caesar Bryan of Gabelli & Company...and it's headlined "What Investors Need to Know About Gold & the Mining Shares".

Egon von Greyerz is founder and managing partner of Matterhorn Asset Management out of Zurich, Switzerland. The interview runs about 23 minutes...and is posted on the metallwoche.de website...and the link is here.

Both of these commentaries are imbedded in this GATA release from yesterday...and the link to the GATA release is here.

World gold demand fell 5% to 1,097.6 metric tons during the first quarter compared to the same period a year ago, with jewelry consumption down but investment demand higher, the World Gold Council said in its quarterly trends report released early Thursday.

“It was quite a complex quarter,” said Marcus Grubb, managing director for investment at the World Gold Council.

He pointed out that prices climbed year-on-year despite the lower global demand, including a sharp decline in buying from India, historically the world’s largest consumer. This meant there had to be “a lot of positives” elsewhere for demand to hold up as well as it did, Grubb said. Chinese buying surged, far outpacing India for both gold jewelry and investment, and central banks remained net buyers.

I found this story posted over at the kitco.com website in the wee hours of this morning...and it's definitely worth reading. The link is here.

Okayama Metal & Machinery has become the first Japanese pension fund to make public purchases of gold, in a sign of dwindling faith in paper currencies.

Initially, the fund aims to keep about 1.5 per cent of its total assets of Y40 billion ($500 million) in bullion-backed exchange-traded funds, according to chief investment officer Yoshisuke Kiguchi, who said he was diversifying into gold to "escape sovereign risk."

The move into a non-yielding asset comes as funds in the world's second-biggest pension market are under increasing pressure to meet promised payments, as domestic interest rates remain rooted near zero. This year, the first of Japan's baby boomers turn 65, becoming eligible for payouts.

This story showed up in the Financial Times yesterday...and is posted in the clear in this GATA release. I thank reader 'David in California' for giving Chris Powell and myself the 'heads up' on this FT piece...and the link is here.