Did A Raging Fire Burn Down JPMorgan’s Gold Vault?

As a reminder, it was Zero Hedge who broke the news in March about the location of JPM‘s vault, namely that it can be found 90 feet below street level at 1 Chase Manhattan Plaza (located over half a mile away on Liberty and William Streets). Which is relevant, because as the FDNY reports, and as the video clip below vividly confirms (with the Federal Hall National Memorial distinctly visible in the background), the fire response was focused on the area on Broad street between the New York Stock Exchange and what is now the 15 Broad Street block.

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So did a sweeping fire “take place” (in broad daylight and in front of video camera armed streetwalkers) providing the fire brigade a pretext to abscond with JPM‘s gold on orders from above, or merely give JPM an alibi to say it’s gold is “gone… all gone” or rather “burned… all burned” (leaving aside the propensity of a fire to propagate in the confined oxygen constraints to be found on top of the Manhattan bedrock and far below street level)? No. For the simple reason that 1 Chase Manhattan Plaza is over two blocks away from where the fire did take place as can be seen on the map below:

In other words, if there was a “fire” in JPM‘s vault, the response would have been not at 15 Broad Street, but over half a mile away at the perfectly fire-accessible Liberty Street (between the NY Fed and 1 CMP), across from the real JPM vault fire doors which can be seen in the following interactive image:

And yes: those who may suggest that any amount of gold tonnage may have been quietly moved over two blocks by the Fire Brigade have never actually carried the not-so-light-bars of gold themselves, especially not in broad daylight.

So why the confusion?

It appears the confusion stems from the Fire Brigade‘s designation of the fire as taking place at “JP Morgan’s building” which indeed is where the Fire Brigade was located. However, it is the 23 Wall Street building, also known as the “JPMorgan building” formerly owned by JPM, and subsequently owned by Morgan Guaranty Trust Company, best known for being the site of the September 16, 1920 Wall Street bombing, when 38 people were killed and 400 injured. Ironically, as was then reported, “because the Morgan building was so well known, many assumed that the target of the assumed anarchist bombing was actually the bank itself.”

For modern generations, 23 Wall Street may be better known as the (incorrect) facade of the NYSE as represented in The Dark Knight Rises.

Of course, JPM has long since moved on from its landmark location just across from the NYSE, and now can be located at its Park Avenue headquarters (with its Bear Stearns annex), and of course, at 1 Chase Manhattan Plaza.

So what is now housed in the 15 Broad/23 Wall Street block to where the FDNY was responding, if not any JPM? 23 Wall and 15 Broad Street were sold in 2003 for $100 million to Africa Israel & Boymelgreen (there is likely a far more interesting story surrounding Africa Israel and Boymelgreen here than there is about the “fire in JPM‘s vault”). The two buildings have become a condominium development, Downtown by Philippe Starck, named for French designer Philippe Starck, one of a growing number of residential buildings in the Financial District. Starck made the roof of 23 Wall into a garden and pool, accessible to the residents of the development.

Could there be a vault in the Downtown residential building, and could the FDNY have been responding to a fire in such a “commercial vault”? Of course: as anyone who has ventured into the skyscraper forest of New York‘s Financial District knows, there is an underground vault in virtually every building.

Source: http://www.zerohedge.com/news/2013-07-21/did-raging-fire-burn-down-jpmorgans-gold-vault

Are Gold Miner Dividends Sustainable?

Although the gold price has proved volatile in recent months, many gold miners continue to offer investors an attractive dividend. But is it sustainable?

For investors looking for a dividend from the large cap gold miners, the last decade and a half has proved fruitful. Frank Holmes, CEO and chief investment officer of US Global Investors, recently noted that the world’s top 20 gold companies have increased their dividends at a compound annual growth rate of 16% over the last 15 years, while gold only rose 12% annually over the same period.

At the moment, Barrick Gold’s (NYSE:ABX) dividend yield is 3.90%, while Goldcorp’s (NYSE:GG) dividend yield is 2.07%, Newmont Mining Corp.’s (NYSE:NEM) dividend yield is 4.09%, and Kinross’s (NYSE:KGC) dividend yield is 2.48%.

The miners themselves were optimistic about dividends heading into this year. According to PwC’s 2013 global gold price report, 100% of senior miners surveyed planned to use cash to continue to pay dividends this year, with 80% saying that they planned to increase the proportion of profits paid as a dividend.

Indeed, speaking about the climate for M&A in the gold space at the Bloomberg Canada Economic Summit last month, Barrick Gold president and chief executive officer Jamie Sokalsky said that investors are hoping for free cash flow, which he said they would perhaps rather see “returned to them in a higher dividend at some point.”

All else being equal, dividends from the gold miners do help mining equities look more attractive to gold ETFs, explains Elizabeth Collins, director, basic materials equity research at Morningstar.

“But unfortunately for gold mining equities, gold ETFs provide leverage to gold prices without the added headaches of cost inflation, production level disappointments, and political risk,” she adds.

This week, Australia’s Newcrest Mining (ASX:NCM) announced that, as a result of a reduction in profitability for the 2013 financial year following a sharp decline in the gold price, it expects that it will not pay shareholders a final dividend.

The company notes that as growth in production and earnings continues from two of its mines over the coming years, and costs and capital expenditures are reduced further, it “is confident it will be well-positioned for both an accelerated reduction in debt levels and a return to dividend payments.”

Back in April, Newmont Mining — which uses a gold price-linked dividend policy, with each quarterly dividend based on the company’s average realized gold price for the preceding quarter — cut its dividend to $.35 per share, based on the average London PM Fix of $1,632 per ounce for the first quarter of 2013. In February, the company’s quarterly dividend was 42.5 cents per share based on the average gold price of $1,718 per ounce for the fourth quarter.

Certainly, the ability of many miners to continue to pay an attractive dividend depends on the gold price’s moves. Earlier this year, RBC Capital Markets ran a “downside stress test” on North American gold producers, to see how robust miners’ balance sheets are. While the test found that most of the companies appear to be able to weather gold prices of $1,500 or $1,4000 per ounce, at $1,200 per ounce, within 24 months most companies would have to cut capital spending and dividends.

“I think many gold miners’ dividends are sustainable as long as gold prices don’t fall. Many miners are cutting back on exploration and capital expenditures in order to boost free cash flow and return more cash to shareholders. However, many gold miners’ dividend levels are either directly or implicitly linked to gold prices. So if gold prices fall, so too would dividend levels,” says Collins.

Source: http://www.minyanville.com/trading-and-investing/commodities/articles/GG-NEM-ABX-KGC-NCMAX-gold/6/7/2013/id/50235

Japan and China start new (bidding) war (for gold)

Reuters / Tyrone Siu

Citizens of America’s two biggest creditors China and Japan are now fighting each other to buy Gold and Silver. But could they be doing something more intelligent with their time and money?

Mrs. Wang, China’s mythical housewife is buying Gold hand over fist, so is Japan’s mythical housewife Mrs. Watanabe. Unlike during past downturns in the price of Gold, the peasants (anyone not a partner at Goldman Sachs or JP Morgan) are reacting with long queues at the local bullion dealer with fistfuls of fiat, fractional bank reserve notes to swap for the currency of kings: Gold.

Apparently, the emerging world ‘gets it.’ There will never be an exit from the Quantitative Easing by any of the world’s central banks. (The ECB has just reduced rates to ½% to match the UK). The Fed in America is sticking to their ultra-low rates and Japan led the parade decades ago with their Kamikaze ZIRP (Zero Interest Rate Policy) monetary madness.

In private conversations, the world’s central bankers let slip that their plan is to keep interest rates close to zero for 10, 15 years or longer – however long it takes to increase the global population enough to create enough ‘violence growth’ to start retiring some of the $100 trillion in debt on these bank’s books.

In other words, there is no exit. There can be no exit. There will only be more money printing and all fiat currencies around the world will continue to be debased until the sheer size of the global population is so great growth occurs as overpopulated areas start fighting each other for air, water, and food. This is the banker’s plan: everybody fighting everybody with the survivors needing credit (inflation) and the losers dying (deflation).

Citizens of America’s biggest creditors; China and Japan, aren’t waiting around, they are doing the equivalent to picking up their pitchforks and torches and buying gold in record amounts. On the NYSE $16 bn. in ‘paper gold’ was sold via the exchange traded fund GLD while Chinese housewifes (and other members of their households) bought that amount and then some. The wealth that is Gold is being transferred from West to East. Paper gold is being swapped for physical.

And what about the China and Japan saber rattling the disputed Senkaku islands? I implore both the Chinese and the Japanese to see past this silly island dispute and instead focus your combined, massive buying power to take enough physical gold and silver off the market to put the Western paper bugs and market manipulators out of business. Your skirmish over islands is a rear-guard action that will amount to nothing. Instead, fight the real enemy: the US dollar and the bankers who – by virtue of the Dollar as world reserve currency – get your people to finance America’s wars in the Mid-East and Africa.

This is the time to do some deep soul searching and realize the enemy is not each other China and Japan, but the common enemy, the US dollar.

Source: http://rt.com/op-edge/japan-china-war-gold-827/