Oct 072015

Back in July I reported on some unusual figures in the US Office of the Comptroller of the Currency’s (OCC) quarterly report on precious metal derivatives. In the OCC’s 2015 Q1 report they had a figure of $75.62b, which was a huge increase from the 2014 Q4 figure of $22.42b. However, in the latest OCC report, the 2015 Q1 figure has been revised down to $26.94b. I have cut and pasted the two figures from the previous report (in green) and the new report (in red) below:


No doubt someone on the internet will claim this is a cover up, but looking deeper into the numbers it seems to be a case of a fat finger keying error. If we go back to the 2015 Q1 report it is clear that the main contributor to the $75.62b figure was Citibank, as can be seen from Table 9 below:


At the time Nick Laird of Sharelynx.com contacted the OCC and questioned them about the dramatic $42.048b and $10.970b figures (circled in blue) and the OCC confirmed that the figures were correct and provided the following screenshot of Citibank’s schedule RC-R as proof (relevant figures circled in blue):


I noted the large difference between Citibank’s centrally cleared derivative contracts figures versus their over-the-counter figures, saying it made “me wonder if the red figures are a fat finger and belong in a different row”. Looking at those figures in blue in light of the revised 2015 Q1 figure of $26.94b leads me to think the numbers are in the right row, just that the decimal place was keyed wrong by two points, that is, the figures were overstated by 100.

If we divide the centrally cleared figures by 100 and add them to the over-the-counter figures, we get revised Citibank white precious metal derivatives totals of:

Maturity < 1yr = 3,083,000 + (38,965,000 / 100) = 3,472,650
Maturity 1-5yrs = 703,000 + (10,267,000 / 100) = 805,670

If you plug these figures into Table 9, the Precious Metals All Maturities figure reduces from $75.62b to $26.88b. That is very close to the OCC’s revised figure of $26.94b and the remaining difference is probably the usual sort of minor adjustments the OCC has made to its figures in the past. So it doesn’t look like there was any real increase in silver/platinum/palladium derivatives in Q1 and nor was Citibank cornering that market.

There is one other dramatic change in the OCC report – a 75% reduction  in commodity derivatives:


No revision was made to the Q1 figure and almost all of the Q1 increase, and Q2 decrease, was JP Morgan, so we assume the +$4 trillion figure stands. Very unusual.

  • Shavi Tupyraz

    Silver appears to have stalled at the $16 congestion level established during January and April and re-tested throughout June. If this is a rally, it still has a lot to prove

    Gold still can’t convincingly take out the June/August $1148 level, and I am looking forward to Keef’s cobasis analysis next week (by which time the Chinese will be back from holiday and the Turks will probably have shot down a Russian jet over Syria)

    • Shavi Tupyraz

      Silver 8th October 00:24 GMT : $15.98

      prompting Jesse to note that “Silver was holding on to the 16 handle extremely well.”

      whilst posting this chart as supporting evidence http://3.bp.blogspot.com/-ASbY0pOmzIE/VhWFgBxw6II/AAAAAAABEKU/ubM5aNQOgNc/s1600/silverweekly8.PNG

      According to the screenshots embedded in that article, 0.05% of Silver inventory and 0.03% of Gold inventory was withdrawn from COMEX, allowing Jesse to to maintain his habitual narrative that “The bullion warehouses continue their slow bleed of inventory”.

      am I missing something, or are these people not strictly on the same planet as the rest of us?

      • festina

        I see you have a one-of-a-kind name. Shavi Tupraz, wow. I see it can be broken up into shavit up r az. Could it be derived from Shove It Up ur Ass? If so, does this reflect how you feel about the people you are writing your comments for?

        • Shavi Tupyraz

          Please feel free to call me any name you choose (many do); its not important to me, and if you have any sense, it won’t matter to you either. In the meantime, should I address you as “Mr. Festina” or is that also perhaps not your real name either?

          I make no pretence about the utter contempt in which I hold charlatans who seek to mislead innocent civilians; whether my own contributions evoke a similar reaction is for you and others to decide and hopefully does not depend on the pseudonym under which I write them, else I might otherwise have styled myself “Ura Niddyot”, “Laura Vaverages” or “Rose O’chairs”.

          In brief, none of this warrants taking too seriously

          • festina

            I am just an old timer that believes in good manners and showing other people respect. I don’t think the name you are using does that. Festina is a pseudonym and is a latin word. Hopefully it does not insult anyone. I haven’t really studied your articles but have noticed they are often unnecessarily vitriolic which may / does downrate them to junk. Put another way, the redneck style of negotiating buys very few converts. However, you do have strong opinions on gold – if presented in a gentlepersonly way may change minds. Thus you would have a better chance to neutralise charlatans (and help save the world).

          • Shavi Tupyraz

            those are certainly not unreasonable observations, and I am sure you are not alone in those opinions, but I really am not in the slightest bit interested in converting or persuading anyone of anything, and if people feel more comfortable with a slick “pink & fluffy” approach, then they are already well catered-for by the Mike Maloneys of this world (who unfortunately do have a very real interest in converting people to the “all lived happily ever after” school of adulant gullibility)

            Having spent the early years of my career on the floor of a Futures exchange, I quickly learnt that a loud mouth and sharp elbows can be valuable assets in the markets, and I rapidly came to appreciate that when dealing with an audience which is by and large immune to reasoned argument, a succinct headbutt can often prove far more eloquent than a wordy academic discourse. If you feel uncomfortable with this, then by all means feel free to redirect the thrust of my comments towards someone else’s arse (and let’s face it, we surely find ourselves in what the US Marine Corps might refer to as “a target rich environment” on that count)

            It is what it is, and whilst I try to ensure that no profanities are involved, if people feel offended or personally insulted by a few intemperate remarks, then I sense that their problems may perhaps range far wider than the vagaries of the Precious Metals markets. I am not writing in order to attract friends or converts – I am simply telling it the way I see it, and if that’s a little too raw for some delicate sensitivities, then I am am surely neither the only nor the most excessive offender. The British call it “banter” http://www.bbc.co.uk/news/uk-england-norfolk-30234121

          • Auldenemy

            Ah, so I was correct in my observation earlier that you are a trader. No wonder you are as hard as hard as nails and have absolutely no perception of life outside of trying to make yourself rich. I feel you infest this site to simply show off. My advice to you would be to go and get a life, a real one, before it’s too late.

          • Shavi Tupyraz

            I love the sound of ad hominem attacks early in the morning – it sounds like…. bigotry

            Hey, look – each to their own; if you don’t like it, don’t read it. You can dream up any back story or impute any motives you like, but the simple truth is I’m just someone calling out nonsense as and when I see it. If Bron wants me to stop, I’m sure he’ll tell me, and until then you’re just going to have to get over yourself and deal with it.

          • http://goldchat.blogspot.com/ Bron Suchecki

            Lets just all keep it civil and clean please.

          • joey

            There goes another 460 jobs from Glencore.
            Was going through this site and found very little on Backwardation Bron? Would it be of interest to have a squiz at this phenomenon?
            I have read some articles that say Silver and Gold are in severe Backwardation in the USA and London?
            Do you think this is normal or should happen, especially when demand is so high and supply is tight? I don’t.

          • http://goldchat.blogspot.com/ Bron Suchecki

            I’ve got heaps on backwardation on the private blog http://www.goldchat.blogspot.com.au/search/label/Backwardation, will get around to revisiting that and updating/rewriting for this blog.

          • Victor Fantastico

            The story of silver shortage (and backwardation) is over.


          • Auldenemy

            Well said….it converses like a scorpion who has been trained to speak.

          • Auldenemy

            ‘I make no pretence about the utter contempt in which I hold charlatans who seek to mislead innocent civilians’.

            In which case, why don’t you rage against the stinking corruption of the Western banking-political cabal? Oh, silly question, you either work for a commercial bank or are some kind of trader who makes an easy living in algo. land.

        • Auldenemy

          Great work Sherlock……love it! This Shavi character is certainly a fake.

  • joey
    • Victor Fantastico

      in the second paragraph of that article:

      using the standard economic metrics, there was a lot of merit in cutting rates.

      the new repo rate is set at 6.75% – still far higher than in many of India’s competitors;

      get over yourself already

      • joey

        Still waiting for your reply to Backwardation?? Well, I guess you’re not so fantastico !

        • Victor Fantastico

          it appears that most obvious challenge facing readers of these discussions is not backwardations, but mentally retarded Australians

          • joey

            Yeah, whatever. know nothing racist Troll.

          • Bob

            Yea, ole Rag had to cut, inflation dropped all the way down to 4%!

      • joey

        “There are no markets anymore, just interventions.” wouldn’t you say??

  • joey

    I’ve noticed with some of the people here when backed into a corner, rather than have a civil conversation come out denigrating and racially discriminating. Not good for the site nor for the readers.

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  • Ferdinand The Bull

    If that type of fat finger can occur on such a major document then we are in even worse trouble then before. We have over paid morons in charge of our most sensitive data.
    I would say, was anyone fired? was a correction posted?
    If not your opinion is no more valid then those on the internet and you have been just as bias as they have been from time to time

    • http://goldchat.blogspot.com/ Bron Suchecki

      Yes a correction was posted, that’s how I found it. The error came from Citibank, but it seems the OCC just accepts whatever figures are reported and doesn’t check them for reasonableness and query back to the submitters.

  • James Hanson

    I inquired of the $4 trillion question at a AICPA Banking conference and 3 times to banking regulators. For some reason, no one will answer. Seems a fair question to me.

    • http://goldchat.blogspot.com/ Bron Suchecki

      IMO it is more unusual that that the figure jumped up then jumped down and existed for one quarter only, than if it stayed at $4t.

      • James Hanson

        A figure of that amount, even if a futures contract, should have been amended if incorrect. It is my strong assumption this has something to do with monetary policy, or else I might get some answers.

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