The attempted rally in gold during the Far East trading session certainly blew out the open interest by the London open as it was obvious the HFT boyz were out and about. The gold price got sold down a bit once London began to trade, and the low price tick came at 1 p.m. GMT right on the button, and 20 minutes before the Comex open in New York.
The subsequent rally ran into obvious opposition, and the vertical price spike about 10:20 a.m. EST got dealt with in the usual manner. From that high, the gold price got sold down until shortly after 2 p.m. in electronic trading, and the smallish rally off that low didn't amount to much.
The CME recorded the low and high ticks at $1,277.30 and $1,293.80 in the December contract.
Although the gold price traded in a fairly tight price range, it only did so because it was being micromanaged; much like it is everyday. But some days are more obvious than others.
Gold finished the Thursday session in New York at $1,287.30 spot, which was up an even $5.00 from Wednesday's close. Net volume of 137,000 contracts was 30% higher than it was on Wednesday, and although not heavy, it wasn't exactly light, either.
Here's the New York Spot Gold [Bid] chart on its own so you can see the price action in North America in much more detail.
Silver rallied a bit in Far East trading on their Thursday, and then faded into the 10:20 a.m. price spike visible on the chart below. Silver's price spike wasn't anywhere near as impressive as the one for gold, and silver traded quietly after that into the close of electronic trading.
Since silver traded in such a tight price range yesterday, the highs and lows aren't worth mentioning.
Silver closed yesterday at $20.745 spot, up 13.5 cents from Wednesday. Once again, gross volume was very heavy, but net volume was 'only' 38,000 contracts, down 10% from Wednesday's net volume figures.
Platinum jumped up fifteen bucks in the first two hours of trading in the Far East on their Thursday. After that it chopped sideways. The two subsequent rally attempts during Comex trading hours in New York yesterday weren't allowed to go anywhere. Palladium rallied five bucks early on, and then traded flat for the rest of the day. Here are the charts.
The dollar index closed on Wednesday afternoon in New York at 80.80, and then climbed to its 81.19 high around 11:20 a.m. GMT in London. From there it chopped lower, with the low tick of 80.87 coming at 11:15 a.m. EST in New York. Then it rallied a bit into the close, finishing the Thursday session at 81.03, which was up 23 basis points from Wednesday.
Not surprisingly, the gold stocks gapped up a bit at the open, and then rallied unsteadily for the rest of the day. The HUI finished almost on its high, up 2.65%.
The same can be said for the silver equities, except that they performed even better. Nick Laird's Intraday Silver Sentiment Index closed up 3.47%.
The CME's Daily Delivery Report showed that zero gold and 15 silver contracts were posted for delivery within the Comex-approved depositories on Monday. Jefferies was the short/issuer on all 15, and JPMorgan was the long/stopper on 13 of them, all for its client's account. The link to yesterday's Issuers and Stoppers Report is here.
There was no sales report from the U.S. Mint.
Joshua Gibbons, the "Guru of the SLV Bar List" had this to say about the prior week's SLV in/out activities for the week ending on Wednesday, November 13: "Analysis of the 13 November 2013 bar list, and comparison to the previous week's list -- No bars were added, removed, or had a serial number change. As of the time that the bar list was produced, it was over-allocated 8.8 troy ounces.
There was a withdrawal of 1,733,842.8 troy ounces on Monday that has not yet been reflected on the bar list, and which should appear on the next bar list [as it normally takes a day or two for the bar list to get updated."
There was no sales report from the U.S. Mint.
Once again there was little gold in/out activity over at the Comex-approved depositories on Wednesday. Nothing was reported received, and only 160 troy ounces were reported shipped out.
And as is almost always the case, it was much busier in silver, as 300,925 troy ounces were reported received, and 601,137 troy ounces were shipped out the door on Wednesday. The link to that activity is here.
Here's the latest Monetary Base chart from FRED that's published by the St. Louis Fed, and I thank Casey Research's own Jeff Clark for sending it our way.
It's "Print, or die!" -- and that's precisely what they're doing.
I have quite a few stories for you today, and I hope you find the time to read the ones that most interest you.
Fed Vice Chair Janet Yellen on Thursday robustly defended the Federal Reserve's bold steps to spur economic growth, calling efforts to boost hiring an "imperative" at a hearing into her nomination to become the first woman to lead the U.S. central bank.
Answering questions before the Senate Banking Committee, Yellen made plain she would press forward with the Fed's ultra-easy monetary policy until officials were confident a durable economic recovery was in place that could sustain job creation.
"I consider it imperative that we do what we can to promote a very strong recovery," Yellen told the panel.
I note that this Reuters story from yesterday, which is very much worth reading, has had a headline change by the 'Thought Police', as it now reads "Yellen says stronger job growth a Fed imperative". I thank West Virginia reader Elliot Simon for today's first news item.
What needs to be confronted is the scandal of Federal Reserve independence. Where in the Constitution does it say that monetary policy is supposed — or permitted — to be independent of politics? If the Founders of America had wanted the monetary power to be given to a body independent of politics, they could have given it to the Army or the Navy or the Supreme Court. But they sat down in Philadelphia and gave the power to “coin money and regulate the value thereof and of foreign coin” to, in the Congress, the single most political institution in the entire constitutional system.
So where in the world does Mrs. Yellen come off lecturing the Congress on the need for independence? It’s not as if independence and opacity have produced much in the way of results. The value of the dollar has collapsed to levels that would have appalled not only the Founders of America but the congress that founded the Federal Reserve. Even after rising a bit in the past year or so, the value of the dollar is still, at a 1,250th of an ounce of gold, less than half of its value on the day Mr. Bernanke acceded to the chairmanship and a shadow of what it was when the Fed was founded.
This editorial comment was posted on The New York Times website yesterday...and I found it buried in a GATA release that Chris Powell filed from New Orleans late last night. It's worth reading as well.
The U.S. Department of Housing and Urban Development for the first time failed to sell some of the soured mortgages it’s auctioning off in the wake of the housing crisis, according to four people with knowledge of the results.
HUD deemed bids on about $450 million of home loans too low to accept at an Oct. 30 sale, said the people, who asked not to be named because the details are private. Since 2010, the agency has sold about 50,000 non-performing single-family loans insured by the Federal Housing Administration to investors willing to either help keep the borrowers in their homes or rehab the properties for sale.
The sales are an attempt by HUD to simultaneously stem losses at the financially troubled FHA and pursue its public mission of averting foreclosures on the underlying properties. The refusal to accept bids on some of the pools may reflect that the FHA reached its limit on the losses it was willing to realize to keep some borrowers in homes or stabilize markets.
This Bloomberg news item was posted on their Internet site late on Wednesday evening MST...and it's the second contribution to today's column from Elliot Simon.
There is a reason why U.S. consumer revolving (credit card) credit growth is getting lower and lower and lower and at last check posted a mere 0.2% annual increase.
That reason is that as the N.Y. Fed disclosed moments ago, federal student loans officially crossed the $1 trillion level for the first time ever. Notably: the quarterly student loan balance has increased every quarter without fail for the past 10 years!
This short Zero Hedge article from yesterday contains three excellent charts...and I consider it a must read. I thank Manitoba reader Ulrike Marx for her first contribution of the day.
Moody’s Investors Service cut its ratings on four of the biggest U.S. banks after deciding the government would be less likely to help them repay creditors in a crisis.
Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of New York Mellon Corp. had their senior holding company ratings lowered one level yesterday after Moody’s concluded a review of eight U.S. banks that began in August. Spokesmen for the four companies declined to comment.
U.S. banking regulators have been preparing rules and procedures that seek to allow the government to wind down even the largest financial companies without providing taxpayer assistance. The plans would require investors to accept losses and could require bonds to be converted into equity capital.
This Bloomberg article was posted on their website yesterday afternoon Denver time...and I thank reader U.D. for sending it our way.
To promote its standing in China, JPMorgan Chase turned to a seemingly obscure consulting firm run by a 32-year-old executive named Lily Chang.
Ms. Chang’s firm, which received a $75,000-a-month contract from JPMorgan, appeared to have only two employees. And on the surface, Ms. Chang lacked the influence and public name recognition needed to unlock business for the bank.
But what was known to JPMorgan executives in Hong Kong, and some executives at other major companies, was that “Lily Chang” was not her real name. It was an alias for Wen Ruchun, the only daughter of Wen Jiabao, who at the time was China’s prime minister, with oversight of the economy and its financial institutions.
This interesting story was posted on The New York Times website late on Wednesday evening...and I thank reader Lou Horner for bringing it to our attention.
From their desks at some of the world’s biggest banks, traders exchanged a series of instant messages that earned them the nickname “the cartel.”
Much like companies that rigged the price of vitamins and animal feed, the traders were competitors that hatched alliances for their own profits, federal investigators suspect.
If those suspicions are correct, the group of traders shared a mission to alter the price of foreign currencies, the largest and yet least regulated market in the financial world. And ultimately, they flooded the market with trades that potentially raised the cost of currency for clients but aided the banks’ own investments.
“The manipulation we’ve seen so far may just be the tip of the iceberg,” the United States Attorney General, Eric H. Holder Jr., said in a rare interview discussing an active investigation. “We’ve recognized that this is potentially an extremely consequential investigation.”
What about the precious metal markets, along with copper and oil, Mr. Holder? This story was posted on The New York Times website late yesterday evening...and I thank Phil Barlett for sharing it with us.
The euro zone economy all but stagnated in the third quarter of the year with France's recovery fizzling out and growth in Germany slowing.
The 9.5 trillion euro economy pulled out of its longest recession in the previous quarter but record unemployment, lack of consumer confidence and anemic bank lending continue to prevent a more solid rebound.
In the three months to September, the combined economy of the 17 countries sharing the euro grew by a slower than expected 0.1 percent. In the previous quarter it rose 0.3 percent - the first expansion in 18 months.
This Reuters news item, co-filed from Brussels and Paris, was posted on their website early yesterday morning EST...and it's the first contribution of the day from Roy Stephens.
The doves are seizing control of the European Central Bank. They are already laying the ground work for a blitz of Anglo-Saxon QE, whatever the Germans, Dutch, Austrians, and Finns (?) have to say about such wicked Latin conduct.
Welcome to the next fascinating phase of the EMU opera buffa, opera tragica.
The ECB's Peter Praet – the board member in charge of setting economic policy debates – has given an astonishing interview to Brian Blackstone at The Wall Street Journal, opening the floodgates for bond purchases.
It is clear that the slide towards deflation and Euroland's fizzling recovery have caused a revolt at long last. The ECB's Latin (plus) majority simply refuses to accept Bundesbank orders any more.
Ambrose Evans-Pritchard is at it again! This blog was posted on the telegraph.co.uk Internet site sometime yesterday...and it's worth reading. My thanks go out to Roy Stephens for his second offering in a row.
Having run out of traditional tools to boost economic growth and push inflation towards the 2 percent target, the European Central Bank is considering to introduce a negative interest rate or purchase assets from the banks.
"If our mandate is at risk we are going to take all the measures that we think we should take to fulfill that mandate. That's a very clear signal", Peter Praet, the ECB executive board member, told the Wall Street Journal.
The negative rate on bank holdings at the ECB means that banks will receive back less than they initially deposited. It is a sort of “penalty” for holding money on account at the central bank. The measure is intended to stimulate banks to plough money back into economy rather than to hold it in reserve.
This very short news items is on the same subject as Ambrose Evans-Pritchard wrote about in the previous story, but with a Russia Today spin. It was posted on their Internet site late yesterday afternoon Moscow time...and it's courtesy of South African reader Bob Visser.
Eurozone finance ministers will meet on Thursday (14 November) with the currency union's four bailout programmes dominating an otherwise quiet agenda.
Officials are, once again, becoming frustrated by Greece. The Greek government and its creditors are "billions apart" on the country's 2014 budget, an EU official with knowledge of the programmes told reporters earlier this week.
The Greek government believes that it needs to find spending cuts worth a further €500 million, while the Troika - composed of officials from the European Commission, the International Monetary Fund and the European Central Bank - estimates the current shortfall to be €2.9 billion.
This news item was posted on the euobserver.com Internet site yesterday morning Europe time...and it's another offering from Roy Stephens.
The U.S. and other Western powers have imposed sanctions on Iran not because it poses a serious threat but because a weak economy would keep Iran under control of the international community, Caleb Maupin, an International Action Center organizer, told Russia Today.
RT: Washington has renewed what it calls 'a state of emergency regime' with Tehran. How significant is that?
Caleb Maupin: Well, it’s really outrageous. Iran has made clear for the last several decades that it has absolutely no intention of developing nuclear weapons, that it only seeks to develop peaceful nuclear power and it has abided by every single requirement of it with the International Atomic Energy Agency under the Non-Proliferation Treaty and yet this propaganda continues to go out claiming that there is some kind of Iranian threat to world peace. Well the reason that the United States, Israel, France, and countries like that are threatened by Iran is not because Iran is aggressive or anything like that. They’re threatened because Iran seeks independent economics. In the Iranian Revolution of 1979 the people of Iran rose up, they overthrew the Shah – who was a brutal US-backed dictator – and they began a course of independent economic development. The profits from Iranian oil go to the Iranian economy. They don’t go to the bankers on Wall Street, they don’t go to the London Stock Exchange, they go to the people. They go to the Iranian economy. And they don’t want independent economic development and that’s what the aggression against Iran is all about. And Iran has been more than accommodating, it’s made clear it has no desire for aggression. When President Rouhani was at the United Nations he made clear that he was talking of a world against violence and extremism and making clear that Iran is not aggressive, Iran does not want violence. But it’s clear that the Wall Street bankers and the corporations and the US government which represents them is very very committed to hostility toward Iran and that’s what we’re seeing with these new sanctions.
The man speaks the absolute truth, dear reader. That's what all this is about. If you haven't read G. Edward Griffin's Book "The Creature from Jekyll Island: A Second Look at the Federal Reserve", it's not too late to rectify that state of affairs. This is an absolute must read, and not just for students of the New Great Game.
1. The first interview is with GATA's secretary/treasurer Chris Powell...and it's headlined "Asian Central Banker's Shocking Confession About the West". 2. The second commentary is by Robin Griffiths. It bears the title "The Ingredients For a Massive "Crash" Are Now in Place". 3. The last commentary is from Keith Barron, and it bears the headline "Chilling Warning Coming From China and the Elites".
[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]
Gold may be on vacation, but it will come back soon, according to John Hathaway and Doug Groh, co-portfolio managers of the Tocqueville Gold Fund, because extreme monetary policies seen across the major economies in the world — namely Japan, Europe and the United States — are pouring a foundation of support beneath the yellow metal and its miners.
In a column for Investment News, Hathaway and Groh wrote that government policy is one of the best things gold has going for it.
The duo wrote that dovish Janet Yellen's nomination as the next head of the Federal Reserve means near-zero interest rates are likely to be extended against a backdrop of increased gold demand in emerging markets like India and China.
True enough on the face of it, I suppose...but not a word about what's at the root of all this, and that's the fact that JPMorgan Chase controls the Comex futures market in all four precious metals. John knows it to be true, but not a word about escaped his lips. This article was posted on the moneynews.com Internet site early Wednesday morning EST...and I thank Elliot Simon for sending it.
China is this year set to usurp India as the world's biggest gold consumer by a convincing margin as strict import rules introduced by New Delhi bite, forecasts from the World Gold Council showed on Thursday.
The industry body cut its outlook for Indian demand in 2013 to around 900 tonnes from the 1,000 tonnes predicted previously, while keeping its forecast for China unchanged at 1,000 tonnes.
Plummeting demand from India could further pressure global prices that have dropped around 24 percent this year on fears the U.S. Federal Reserve would cut its economic stimulus.
"The administrative measures that the Indian government has imposed on the market have proven to be quite effective and imports have slowed down," Albert Cheng, the WGC's managing director for the Far East told Reuters.
This Reuters story is another news item I found in a GATA release from yesterday. It was filed from Singapore yesterday afternoon IST. The real headline reads "WGC sees China well ahead of India as world's No. 1 gold consumer".
In the first nine months of the year, physical gold ETFs saw almost 700 tonnes in redemptions.
But, according to Marcus Grubb, MD Investments at the World Gold Council, recently "We have almost seen a cessation of outflows and, in fact, we had some net inflows globally in the last two to three weeks into November."
Speaking to Mineweb on the release of the Council’s Gold Demand Trends for Q3 2013 report, Grubb said, "It was striking to me that despite considerably stronger-than-expected economic numbers on Friday last week - Non farm payroll and GDP - we have not seen significant ETF redemptions since then, a couple of tonnes at the most... what that means is a lot of the commodity super cycle investors have exited gold and also those investors were fearful of a collapse of the banking and financial system."
The implication of this, Grubb says, is that those investors now holding ETFs "are strategically committed to gold and have it as a unique hedge asset and a diversifier in their portfolio."
This article was posted on the mineweb.com Internet site yesterday...and I thank Ulrike Marx for sending along.
Gold demand fell 21% in volume terms during the third quarter of 2013, the World Gold Council says, driven lower by continued outflows from ETFs.
Writing in its Gold Demand Trends report for the three months to end September, the Council said, gold demand fell to 868.5 tonnes. This translated, in value terms to US$37bn, down 37% on the quarter.
While this was lowest quarter in value terms since the first three months of 2010, the figures continue to follow the two key themes that have emerged during the year the council says - "the rising level of consumer demand off-setting outflows from ETFs, and the geographical flow of gold from western to eastern markets.
This commentary, which is worth reading, was also posted on the mineweb.com Internet site yesterday...and it's also another offering from Ulrike Marx.
The graph below is from The World Gold Council's latest Gold Demand Trends report and is appropriately titled West to east.
The Council makes the point in its commentary that this flow can also be marked in the volume of the metal being converted from London Good Delivery bar-form into smaller, 'Asian consumer-friendly denominations of kilo-bars and below'.
According to the WGC, "Eurostat show exports of gold from the UK to Switzerland for the January – August period grew more than tenfold, to 1,016.3t.1 This compares with a total of just 85.1t for the same period in 2012."
This is another story by Geoff Candy over at the mineweb.com yesterday...and it dovetails nicely with the precious story. The embedded graph is worth a look, but tiny numbers and words will be a challenge to read for some. It's the third story in a row from Ulrike Marx.
Billionaire hedge fund manager John Paulson, who cut his gold holdings by more than half in the second quarter, maintained his bet on the metal over the next three months as prices rebounded.
Paulson & Co., the largest investor in the SPDR Gold Trust, the biggest exchange-traded product for the metal, held 10.23 million shares as of Sept. 30, unchanged from June 30, according to a government filing yesterday. Billionaire George Soros took a stake in the Market Vectors Gold Miners ETF.
This longish Bloomberg story was posted on their website yesterday evening MST...and I thank reader Ken Hurt for digging it up for us.
Silver coins are gaining favor among investors and sales could rise to a record high in 2013, thanks to a sharp fall in the precious metal’s price.
Demand for silver, which is sought after by investors and industrial users alike, is expected to rise, consultancy Thomson Reuters GFMS said in a recent report. The industrial sector accounts for about 45% of global silver consumption, it said.
Already, sales of the U.S. Mint’s American Eagle silver coins have surpassed 2012 levels, as investors are snapping silver coins up “at a breakneck pace,” said Dallas-based precious metals dealer Dillon Gage Inc. The dealer expects American Eagle silver coin sales in the U.S. to exceed a record of 39.868 million troy ounces set in 2011. Silver coin sales totalled 39.17 million ounces in the 10 months ended Oct. 31, eclipsing the 33.74 million ounces sold in 2012, it said.
This news item was posted on the blogs.wsj.com Internet site in the wee hours of yesterday morning...and it's certainly worth skimming. I thank Elliot Simon for his last contribution to today's column.
Captain Robert Mayne stands at the wheel as he guides the steel-hulled Aqua Quest from the docks in the Florida Keys, pointing the vessel toward what he’s been assured is a gold-laden shipwreck that may be worth tens of millions of dollars.
Mayne, 60, says experience has taught him such gold hunts can be perilous: inspiring obsession, sending treasure hunters on endless journeys and blinding them to reason.
“Gold makes people crazy,” says Mayne, who in his youth smuggled marijuana, and now has neatly combed, greying hair. “They become lost in their dream.”
Even he finds the pull irresistible. Investors who hold rights to the site southwest of Key West say it may be the resting place of a galleon sunk by a 1622 hurricane. Mayne has agreed to cover the cost of the excursion in exchange for half of any treasure.
This very interesting story was posted on the Bloomberg Internet site late Wednesday evening Mountain Time...and I thank Ken Hurt for sharing it with us.
The precious metal arrived late Monday on a special flight from Bangkok and is under armed guard at the temple in Bodh Gaya, a holy town about 100 kilometres from Patna, the capital of Bihar state.
"A 40-member team including experts and two dozen commandos from Thailand have arrived at Bodh Gaya with gold in 13 boxes," Arvind Kumar Singh, a member of the temple management committee, said.
The Mahabodhi Temple, built about 1,500 years ago, is a UNESCO world heritage site and marks the place where the Buddha is said to have attained enlightenment in 531 B.C.
This is another very interesting story. It was filed from Patna, India...and posted on the Bangkok Post website late yesterday evening local time. And I thank Ulrike Marx for her final contribution to today's column.
Central bankers are aware of the fractional-reserve nature and vulnerabilities of the international gold banking system, your secretary/treasurer told King World News yesterday in an interview about his recent presentations in Asia, Australia, and New Zealand.
The gold price suppression scheme, Powell added, could collapse abruptly as the London Gold Pool did in 1968 or, more likely, will end in an international currency revaluation that prices gold at a much higher level.
This interview was posted under the King World News blogs further up in this column, but because of its importance, I thought it worth posting on its own just to make sure you didn't miss it. It's a must read for sure.
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A few words about the horrid silver price action the past few days, especially relative to gold. As is almost always the case, there are no legitimate supply/demand developments to account for the one dollar loss in silver so far this week. Once again, this is strictly a blatant episode of JPMorgan and allied commercials rigging prices lower to induce technical fund selling. The succession of lower lows on increasing volume virtually guarantee that this week’s COT report will show significant reductions in the total net commercial short positions for both Comex silver and gold. - Silver analyst Ted Butler: 13 November 2013
With the exception of the smallish rally in gold in the Far East, and the rally in early New York trading, which got dispatched in the usual manner, it was pretty quiet in the precious metal world yesterday. Gold volume was higher because JPMorgan et al probably had to throw a decent amount of Comex paper at these attempted breakouts to prevent them from getting out of hand. Mission accomplished, but it blew out the volume a bit. Silver's volume was actually down from Wednesday.
As Ted mentioned in the quote above, we get the latest Commitment of Traders Report today for positions held at the close of Comex trading on Tuesday, and both of us are expecting it to show big improvements, as the price action during the reporting week certainly indicates that this is what the report will show. As Ted also said the other day, you know the silver and gold markets have been rigged for decades when you can forecast in advance with almost absolute certainty what will be in it, and I'll have all the details for you tomorrow.
We're still not out of the woods yet as far as the precious metal prices are concerned, and it won't end until "da boyz" have taken all the blood out of the technical funds and small traders that they can. I don't know the timing, but as I mentioned either late last week, or early this week, this could drag on until we get past First Day Notice at the end of the month. With December being the biggest delivery month of the year in both gold and silver, I doubt very much that the powers that be will want too much excitement between now and then.
Since they are 100% in control of prices, that's probably the scenario that we'll have, no matter what external forces want to drive the market.
But they can't control prices forever, and as Chris Powell said earlier, one of these days we're going to get a big monetary/financial reset, which is something I [and others] have been talking about off and on for years; and when that day comes, you'll be either all the way in, or all the way out.
There was a bit of a positive bias to precious metal price in early trading in the Far East on their Friday, but as the Hong Kong trading day wore on, prices faded. All four precious metals are back at, or below, their Thursday afternoon New York closes going into the London open, which occurred a few moments ago as I write this paragraph. Volumes are exceedingly light, and the dollar index is comatose.
More than two hours have passed since I wrote the above paragraph, and I note that all four precious metals are below where they were at the London open, and volumes in gold and silver are almost double what they were then, especially silver volume. But, having said that, overall volumes aren't all that heavy. Net volume in gold is 21,000 contracts, and in silver it's 5,500 contracts. And as I hit the send button at 5:10 a.m. EST, gold is down about six bucks, and silver is down 15 cents. The dollar index still isn't doing a thing.
Precious metal trading in New York on a Friday always makes me nervous, and I shan't hazard a guess as to what JPMorgan et al have in store for us for the remainder of this trading session. But nothing should surprise you, dear reader, as it certainly won't surprise me.
That's all I have for this column, which is more than enough.
Enjoy your weekend, or what's left of it, and I'll see you here tomorrow.