Growing Strain of Control in Silver
CIGA Eric

Commercial traders continue to cover their short positions into strength in silver and gold. The size and speed of the short covering is particularly acute in the silver market. This unusual activity relative to price, first discussed as a money flow footprint ^[1], suggests a subtle shift within highly controlled markets. Any shift should be monitored close as it can imply growing strain on control.

Silver London P.M Fixed and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:
^[2]

Gold London P.M Fixed and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:
^[3]

More… ^[4]

Dear Jim,

The following article attempts to explain how Bank of America is using “creative” accounting techniques to reduce its required reserves for failed residential Mortgage Backed Securities that it claims to “hold.”

This is evidence of the “smoke and mirrors” OTC derivatives that you have been warning against for years.

With these admissions, I simply cannot understand how investors continue to buy these double-downgraded junk bonds, repackaged into AAA rated securities.

Respectfully,
CIGA Marie

Truth In Lending Audit & Recovery Services, LLC
Mortgage Fraud and Forensic Analyst
Certified Fraud Examiner
Marie.McDonnell@truthinlending.net ^[5]

Bank of America Re-Remics Cut Mortgage Debt as Basel Rules Loom
By Miles Weiss and David Mildenberg – Oct 14, 2010

Bank of America Corp., seeking to reduce risk and meet new capital standards, upgraded billions of dollars of distressed mortgage bonds by repackaging them into new securities using a variation of a Wall Street technique that failed during the credit crisis.

The transactions, known as re-remics, are designed to add a layer of protection to residential mortgage-backed securities that sustained losses, enabling them to regain investment-grade ratings. The strategy helped the bank pare its RMBS holdings by $5.2 billion in the second quarter, or about 15 percent, according to a company filing.

With bank stocks mired near historic lows in relation to book value, firms such as Bank of America and JPMorgan Chase & Co. are searching for alternative ways to meet rules set by global regulators since the 2008 financial crisis. By turning junk-rated securities into investment-grade bonds, Bank of America will need to hold less capital under rules agreed to by the Basel Committee on Banking Supervision.

“The larger banks are going to do anything and everything they can to create capital other than issuing stock,” said Matthew Pieniazek, president of Darling Consulting Group Inc., a Newburyport, Massachusetts, firm that provides asset-liability management advice to banks. “The most punitive way of raising capital is by issuing highly dilutive common equity in the current marketplace.”

‘Scrubbing’ Balance Sheets

Re-remics, short for re-securitizations of real estate mortgage-investment conduits, are one way for lenders to improve capital ratios without issuing stock, according to Pieniazek, who also runs educational programs for bank regulators. Firms such as Bank of New York Mellon Corp. have been doing re-remics since the credit crunch began in 2007, primarily to restructure private-label RMBS to make the bonds easier to divest.

More… ^[6]