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Partnership to "strengthen our physical presence in commodities," bank says

Deutsche Bank will join forces with London-listed metals refiner Johnson Matthey to clear and store platinum and palladium to build on its position in the physical commodities market, it said on Wednesday.

Germany's largest bank said it would offer storage for platinum and palladium in ingot, plate and sponge form for its clients, together with Johnson Matthey, one of the world's largest refiners and recyclers of platinum group metals (PGMs), which are used predominantly in catalytic converters to cut harmful vehicle emissions.

"Deutsche Bank is committed to continuing to build and strengthen our physical presence in commodities," sais Raymond Key, global head of metals trading at Deutsche Bank. "Working with Johnson Matthey enables us to offer greater efficiencies and controls to our clients for their platinum and palladium trading and storage."

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Combination of tax hikes and spending cuts would contract economy by 1.3%, says Congressional Budget Office study

A new government study released Tuesday says that allowing Bush-era tax cuts to expire and a scheduled round of automatic spending cuts to take effect would probably throw the economy into a recession.

The Congressional Budget Office report says that the economy would shrink by 1.3 percent in the first half of next year if the government is allowed to fall off this so-called "fiscal cliff" on Jan. 1 -- and that the higher tax rates and more than $100 billion in automatic cuts to the Pentagon and domestic agencies are kept in place.

There's common agreement that lawmakers will act either late this year or early next year to head off the dramatic shift in the government's financial situation. But if they were left in place, CBO says it would wring hundreds of billions of dollars from the budget deficit that would "represent an additional drag on the weak economic expansion."

CBO projected that the economy would contract by 1.3 percent in the first half of 2013, which would meet the traditional definition of a recession, which is when the economy shrinks for two consecutive quarters.

"Such a contraction in output in the first half of 2013 would probably be judged to be a recession," CBO said.

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Unprecedented move lets Beijing got straight to the U.S. Treasury to buy bonds

The Treasury, apparently dissatisfied with the speed of indirect bank and/or Fed-inspired monetization of its exponentially rising debt-load at ever-cheaper costs of funds, decided in June 2011 to allow the Chinese, with their equally large bucket of USDs to bid directly for US Treasuries.

As Reuters reports, China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government. The documents, viewed by Reuters, indicate that the US Treasury has given the PBOC a direct computer link to its auction system - which was first used in the 2Y auction of June 2011. Perhaps this helps explain the massive spikes in direct bidders July and August 10Y auctions (around the US downgrade).

Interestingly, Primary dealers are not allowed to charge customers money to bid on their behalf at Treasury auctions, so China isn't saving money by cutting out commission fees; instead, China is preserving the value of specific information about its bidding habits. By bidding directly, China prevents Wall Street banks from trying to exploit its huge presence in a given auction by driving up the price. This, after the 2009 discovery (and relaxing of other reporting requirements to cover this) that China was using special deals to hide its bond purchases, seems like more pandering to the large-holder-of-Treasuries as "direct bidder status may be controversial because some government officials are concerned that China has gained too much leverage."

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Jan Hatzius tells CNBC that the scales are starting to tip in favor of further monetary easing by the Fed

With the latest existing homes sales data looking relatively strong and other economic data suggesting the US recovery is stable, many investors believe further Fed intervention is off the table.

But Goldman Sachs chief economist Jan Hatzius says not so.

Although he admits, "The Fed hasn't made up its mind," Hatzius believes if you list out the pros and cons - the scales are starting to tip in favor of further monetary easing and the Fed knows it.

"Given the financial conditions and given where we see the economy - the lost ground that needs to be made up - we think the case for additional monetary stimulus is still pretty good," says Hatzius on CNBC's Fast Money.

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With more than $2 billion taken out of gold before the Facebook IPO, some of that money should be returning to the metal, Phil Streible says

"$1,600 is a key resistance level" for gold, RJO Futures broker Phil Streible tells The Street in a May 21 interview, "so that's the part that we've got to get back over. ...

"Some of the fundamentals have changed a little bit. It seems like more economic weakness is here. What it's doing is it's causing that need for additional monetary accommodation."

"A lot of people shifted money [from gold] to be able to play that [Facebook initial public offering last Friday]. Now with that fizzling out and it not having that pop that people were looking for, they might reallocate their money back into some of these oversold safety plays like gold, like silver."



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