Housing Starts Tumble, Miss Most Since January 2007; Permits Have Biggest Two-Month Plunge Since Lehman
Tyler Durden on 07/17/2014 08:55 -0400
"Epic disaster." Those two words best explain what just happened with US housing starts and permits in June.
Those who want a slightly more detailed narrative of what the Department of Commerce just reported here it is: in June housing starts were expected to print at a solid 1020K, to validate the sustainable "recovery." Instead, what happened was that the May downward revised number of 985K, which was a consensus beating 1001K last month, crashed to 893K, a drop of 92K which was the biggest since the January "polar vortex" effect, the biggest miss to permaoptimistic expectations since January 2007, and which brought the total number of starts to the lowest level since September 2013. Was it the harsh weather’s fault this time too?
Biggest miss since January 2007!
The reason for the collapse: a plunge in both single and multi-family starts, so one can’t blame the end of Wall Street’s distressed buying frenzy for this one. In fact, single-family starts cratered to 575K – the lowest since November 2012!
Insider Trading and Financial Terrorism on Comex
July 16, 2014
Paul Craig Roberts and Dave Kranzler
July 16, 2014. The first two days this week gold was subjected to a series of computer HFT-driven “flash crashes” that were aimed at cooling off the big move higher gold has made since the beginning of June. During this move higher, the hedge funds, who typically “chase” the momentum of gold up or down, built up hefty long positions in gold futures over the last 6 weeks. In order to disrupt the upward momentum in the price of gold, the bullion banks short gold in the futures market by dumping large contracts that drive down the price and make money for the banks in the process.
As we explained in previous articles on this subject, the price of gold is not determined in markets where physical gold is bought and sold but in the paper futures market where contracts trade and speculators place bets on the price of gold. Most of the contracts traded on the Comex futures market are settled in cash. The value of the contracts used to short gold and drive down the price is well in excess of the actual amount of physical gold that is kept on the Comex and available for delivery. One might think that regulators would pay attention to a market in which the value of contracts outstanding exceeds by several multiples the amount of physical gold available for delivery.
The Comex gold futures market trades 23 hours per day on a global computer system called Globex and on the NYC trading floor from 8:20 a.m. EST to 1:30p.m. EST (the 8:30 a.m. opening time on the face of the graph below is a draftsman’s error). The Comex floor trading session is the highest volume trading period during any 23 hour trading period because that is when most of the large U.S. financial institutions and other users of Comex futures (jewelry manufactures and gold mining companies) are open for business and therefore transact their Comex business during Comex floor hours in order to achieve the best trading execution at the lowest cost.
The big hedge funds primarily trade gold futures using computers and algorithm programs. When they buy, they set stop-loss orders which are used to protect their trading positions on the downside. A “stop-loss” order is an order to sell at a pre-specified price by a trader. A stop-loss order is automatically triggered and the position is sold when the market trades at the price which was pre-set with the stop-order.
The bullion banks who are members and directors of Comex have access to the computers used to clear Comex trades, which means they can see where the stop-loss orders are set. When they decide to short the market, they start selling Comex futures in large amounts to force the market low enough to trigger the stop-loss orders being used by the hedge fund computers. For instance, huge short-sell orders at 2:20 a.m. Monday morning triggered an avalanche of stop-loss selling, as shown in this graph of Monday’s (July 14) action (click on graph to enlarge):
In the graph above, the first circled red bar shows the flash crash that was engineered at 2:20 a.m. EST, a typically low-volume, quiet period for gold trading. 13.5 tonnes of short-sales were unloaded into the Comex computer trading system. The second circled red bar shows a second engineered flash-crash right before the Comex floor opened at 8:20 a.m. EST. This was triggered by sales of futures contracts representing 27.5 tonnes of gold. A third hit (not shown) occurred at 9:01 a.m. This time contracts representing 40 tonnes of gold hit the market.
Gold Manipulators are Desparate
From Egon von Greyerz
With virtually empty gold vaults, the central banks and bullion banks are now becoming desperate.
The action we are seeing in the paper gold market with the recent $50 takedown is yet more proof of the corner that the gold manipulators have put themselves into by having virtually no physical gold left.
A rising gold price is dangerous for the manipulators. This would inevitably lead to more physical demand, something that would be disastrous for the manipulators. As the holders of paper gold begin to realise that neither Comex nor the bullion banks or the Central banks have a fraction of the gold required to satisfy the gold paper claims, they will demand delivery. With the paper gold market being up to 100 times the physical market, there will of course be nowhere near the gold available at current prices to satisfy the outstanding paper claims.
The gold manipulators are going to lose this game. This is a certainty. The only question is when. They have managed to frighten investors by manipulating the price down substantially in the last few years. In spite of that gold has gone from $250 in 1999 to $1,300 today.
The reason why the manipulators now are desperate and that we are getting nearer to a cataclysm is that physical demand has been at very high levels in the last few years mainly due to substantial buying from Asia and in particular China. This has led to the physical gold in the vaults of the bullion banks and central banks migrating from the West to the East.
As both the world economic and geopolitical situation deteriorates this autumn, we are likely to see major changes in markets. As the dollar comes under pressure, the precious metals will be major beneficiaries. This will lead to the beginning of the end of the manipulation in the paper gold and silver markets and strongly rising gold and silver prices.
Dr. Paul Craig Roberts and Dave Kranzler have just published an excellent commentary, with some very telling charts, on how the gold market is being manipulated.
“The first two days this week gold was subjected to a series of computer HFT-driven “flash crashes” that were aimed at cooling off the big move higher gold has made since the beginning of June. During this move higher, the hedge funds, who typically “chase” the momentum of gold up or down, built up hefty long positions in gold futures over the last 6 weeks. In order to disrupt the upward momentum in the price of gold, the bullion banks short gold in the futures market by dumping large contracts that drive down the price and make money for the banks in the process.”…
Please go to PaulCraigRoberts.org to read the full ‘ must read’ article.
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Egon von Greyerz
Malaysia Airlines Jet Crashes in Ukraine, May Have Been Shot Down
By NEIL MacFARQUHAR and DAVID M. HERSZENHORNJULY 17, 2014
MOSCOW — A Malaysia Airlines Boeing 777 with nearly 300 people aboard crashed in eastern Ukraine near the Russian border on Thursday, the Ukraine government and a regional European aviation official reported, and the Interfax news agency said it had been shot down.
Ukraine’s president, Petro O. Poroshenko, said in a statement that he was calling for an immediate investigation of the crash. He did not rule out that it might have been shot down.
A regional airline official said the plane had been flying at about 33,000 feet when radar trackers lost it over eastern Ukraine near the Russian border.
Eastern Ukraine has been roiled for months by a violent pro-Russian separatist uprising in which a number of military aircraft have been downed. But this would be the first commercial airline disaster resulting from the hostilities in Ukraine.
Malaysia Airlines, still reeling from the mysterious loss of another Boeing 777 flight in March, said it had lost contact with the flight, MH17, from Amsterdam to Kuala Lumpur over Ukraine but offered no further details immediately. Prime Minister Najib Razak of Malaysia said in a Twitter post that he was “shocked by reports that an MH plane crashed. We are launching an immediate investigation.”
Malaysian Plane ‘Shot Down With 295 On Board’
A Boeing 777 travelling from Amsterdam to Kuala Lumpur reportedly comes down in Ukraine, close to the Russian border.
A Malaysian passenger plane with 295 people on board has been shot down as it flew above eastern Ukraine, according to aviation sources.
The plane, which is believed to have been flying from Amsterdam to Kuala Lumpur, was travelling at an altitude of 10km (6.2 miles) when it was shot down, Russia’s Inferfax reported.
The aircraft, reportedly a Boeing 777, was brought down by a ground-to-air missile, an adviser to the Ukrainian interior ministry quoted by the news agency said.
A spokesman for Malaysian Airlines confirmed it had lost contact with flight MH17, which departed from Amsterdam at 12.14am local time.
The flight disappeared from radar as it flew over Ukrainian airspace, he said.
Sky’s Katie Stallard, in Moscow, said media reports suggest the plane came down in the Donestk region, where there has been recent heavy fighting amid continuing tensions between Russia and Ukraine.