The U.S. Commodity Futures Trading Commission has sued two companies for allegedly failing to properly handle customer funds.

Goldman Sachs' will pay $7 million to settle allegations it failed to diligently supervise accounts that it carried from about May 2007 to December 2009, the Commodity Futures Trading Commission said on Tuesday.

The CFTC said the Goldman unit, which provided back-office and other services to some clients who themselves are broker-dealers, did not properly supervise the handling of subaccounts. Goldman declined to comment.

In a separate lawsuit against New York-based futures clearing company MBF Clearing, the CFTC alleged that the company failed to properly segregate customer funds.

If you read the story, I think that MBF Clearing is getting shafted. This CNBC story was sent to me by West Virginia reader Elliot Simon...and the link is here.

The Fed just announced that the latest round of bank stress tests will come out Thursday at 4:30 PM Eastern time. [Note: The Fed was forced to release this data yesterday, following a disclosure by JPMorgan. - Ed]

As a reminder, this is the doom scenario banks will be stress tested against:

The supervisory stress scenario for CCAR 2012, which was designed in November 2011, depicts a severe recession in the United States, including a peak unemployment rate of 13 percent, a 50 percent drop in equity prices, and a 21 percent decline in housing prices. The supervisory stress scenario is not the Federal Reserve's forecast for the economy, but was designed to represent an outcome that, while unlikely, may occur if the U.S economy were to experience a deep recession at the same time that economic activity in other major economies contracted significantly.

Sooner or later this will all come to pass. This story was posted on the businessinsider.com website yesterday...and I thank reader Brad Robertson for sending it along. The link is here.

JPMorgan Chase & Co., which produced the most trading revenue among Wall Street firms last year, had the highest trading and counterparty losses of the biggest U.S. banks under the Federal Reserve’s stress scenario.

JPMorgan had an estimated $27.7 billion in projected losses from mark-to-market changes, credit valuation adjustments and counterparty default losses, according to the Fed results released yesterday. Goldman Sachs Group Inc. had an estimated $27.1 billion of such losses in the testing.

The Fed’s global financial market shock tested losses from declines in positions held, counterparty defaults and charges related to the deterioration of creditworthiness of trading partners through the end of 2013.

Bank of America Corp. had a projected $21.1 billion of trading and counterparty losses, Citigroup Inc. had $20.9 billion, Morgan Stanley had $12.8 billion and Wells Fargo & Co. had $6.9 billion.

This rather short Bloomberg story, filed late yesterday afternoon from New York, was sent to me by Washington state reader S.A...and is definitely worth the read. The link is here.

According to financial analyst Louis Boulanger out of Auckland, New Zealand..."Something very nasty may be about to happen in the derivatives complex..."

"Why would this latest announcement be important? Because it is the latest in a series since last week’s Greek government default on its sovereign debt and, while the mainstream financial media would have you believe this was a ‘non-event’ or ‘orderly default’ with minimal consequences, the truth of the matter is that we will not know how ‘orderly’ the default will be until the announced auction of the bonds to be swapped takes place next week at the date set by the ISDA. But, irrespective of the outcome next week, please note that last Friday WAS, in fact, the first sovereign debt default from a developed nation since World War II. That alone, makes it a very significant event."

"Since the default, there seems to be a raging wildfire behind the scenes as maybe the entire Credit Default Swap (CDS) market is stressed due to the Greek default. The losses may come fast and furious once the auction is held on March 19th, based on ISDA’s Big Bang Protocol."

Yesterday I ran the story that the CME's chairman was leaving at the end of 2012. One wonders if this turn of events, plus others, is behind it. We'll see.

Here's the press release from the CFTC's website...and I thank reader 'David in California' for bringing this must read story to our attention. The link is here.

It's being greeted as a breakthrough -- but it remains open whether it really is. When the 27 European Union finance ministers meet in Brussels on Tuesday, they plan to discuss the introduction of a financial transaction tax in Europe. It's the first time that the issue has been on the agenda at such a meeting, and supporters of the tax argue that is a sign that the tax is making progress in its long journey through the EU's institutions.

Indeed, a certain amount of progress can be seen in the ongoing battle over a tax on financial transactions -- at least on paper. French President Nicolas Sarkozy and German Chancellor Angela Merkel, the EU's two most powerful leaders, have made the issue a priority. And in September 2011, the European Commission presented a draft directive which foresees a financial transaction tax on all stock, bond and derivative transactions within the EU. The tax could come into force in 2014 -- provided all 27 EU members agree to it.

Therein lies the rub. There is little chance of such an agreement. Officially, supporters of the tax are still hoping for the "comprehensive solution," as the Commission's proposal is dubbed by the German government. But an agreement is already regarded as a pipedream. A whole row of naysayers, led by Britain and Sweden, are opposed to the tax unless it is introduced globally. They consider it to be detrimental to growth and fear that they will become less competitive on the international playing field if they introduce a tax. The unanimity principle applies to tax matters within the EU, so even a single veto would be sufficient to derail the plan.

This story was posted on the German website spiegel.de yesterday...and is Roy Stephens first offering of the day. The link is here.

European Parliament member Nigel Farage told King World News yesterday that the European financial elite is posing as if everything in the financial system has been fixed even as they are planning more bailouts. And Farage acknowledges that Germany and Switzerland are trying to figure out how to get their gold back from the United States.

I borrowed the headline and the introduction from a GATA release...and the link to the KWN blog is here.

There's a general view out there that with private creditors having agreed their 50pc haircut, the "Greek problem" has been solved, at least for now. Unfortunately, it has not.

According to Reuters, an unpublished "Compliance Report" by EU executives has concluded that Greece will have to impose a further fiscal squeeze in 2013/14 amounting to some 5.5pc of GDP in order to meet the targets that underpin the second international bailout. The chances of Greece being able to do this are about zero, though that is my conclusion, not that of the report.

According to the report, the austerity measures already adopted by Athens should be enough to bring the primary deficit down to the agreed 1.5pc this year. However, "current projections reveal large fiscal gaps in 2013-14". The projected shortfall is reckoned to be about 5.5pc of GDP. All this, of course, assumes that Greece achieves the output levels forecast by the Troika, the chances of which are again about zero. So in fact, the required squeeze will be even larger, further undermining growth and digging an even deeper hole.

This story showed up in The Telegraph yesterday...and is another Roy Stephens offering. It's worth skimming...and the link is here.

Top exporter Saudi Arabia and other Persian Gulf producers say surging oil markets are beyond their control and prices could spike higher unless tensions between the West and Iran subside.

Saudi Oil Minister Ali al-Naimi and OPEC Secretary General Abdullah al-Badri are expected to focus on high oil prices in their addresses to the International Energy Forum gathering of oil ministers and executives on Wednesday, several OPEC sources said.

"Volatility is a concern for us and it can only be resolved if the issue with Iran can be resolved," said a Persian Gulf oil industry source.

This Reuters story was posted in the Tehran Times this morning...and is another Roy Stephens offering. The link is here.

Foreign investors have been rushing Australian government bonds with a record three-quarters of the Commonwealth's $232 billion debt on issue now held offshore.

For big foreign investors, Australia has emerged as a relative safe haven in the face of Europe's debt problems and the US last year having its cherished AAA-rating cut by one credit ratings agency.

Adding to the allure of Australian government debt, Canberra is still paying attractive interest rates for its long-term borrowing costs.

These 'attractive interest rates' won't last for long, dear reader, because I'm sure that Australia's central bank wants a zero interest rate policy as fast as they can get there...and the bond junkies are buying everything in sight while the rates are high.

This story was posted over at theage.com.au website earlier today...and I thank Australian reader John Ilmenstein for sharing it with us. The link is here.

Beijing's tough defense of its rare-earths export quotas is expected to escalate trade disputes over the minerals and spur mining investments although China has strengths in the industry that are potentially long-lasting.

The U.S., the European Union and Japan Tuesday filed a complaint against China at the World Trade Organization over Chinese restrictions on shipments of raw materials, including rare earths, a category of 17 mineral elements and alloys essential to high-tech goods from iPads to the Toyota Prius hybrid car. The complaint, which will be ruled on around the end of 2012, demands that China remove its export restrictions or face trade sanctions. Some uses are more esoteric: Europium is an anti-forgery marker in euro banknotes.

Xinhua, China's state-run Chinese news agency, said in a commentary Tuesday the move could "trigger a backlash from China instead of settling the rift." Xinhua said the move "may hurt economic relations between the world's largest and second-largest economies."

This story from yesterday's edition of The Wall Street Journal was posted in the clear in this GATA release...and I thank Casey Research's own Doug Hornig for sending it to me. It's a must read in my opinion...and I can hardly wait for them to add silver to that list. The link is here.

Grant compared gold's performance with that of Coca-Cola's common stock since 1996 (see below) and found that gold has outperformed the stock for a while. And remember, Berkshire Hathaway owns 200 million shares of Coke.

Grant applauded Buffett for investing a company that has improved significantly over the years. But ultimately, returns are returns and gold has crushed coke. Here's what Grant said:

"It's humiliating to the people who own [Coca-Cola] common. This is why valuation is so important. This is why price and the margin of safety is so important. In 1996 Coke was whatever 39 times earnings or something and gold was known to be the refuge of not the fearful but of the idiots. And to be sure I don't fault Mr. Buffett as an investor it would hardly behoove me to do so, but I do observe that over these past not so prosperous dozen or so or more years, the commodities have done better than even the best quality equities."

This must watch 11:10 minute video is posted over at the businessinsider.com website...and is Roy Stephens final offering of the day. The link is here.

The first is from Rick Rule...and it's headlined "$150 to $170 Oil, Gold, Fraud & Dangerous Times". The second is from Richard Russell. The title reads "More QE After 40 Year Monster Bubble".

On the latest edition of "The Keiser Report" on the Russia Today network, Max Keiser and Stacy Herbert discuss the growing concern in Germany and Switzerland about the vulnerability of their gold reserves in United States custody. GATA's work is cited.

I borrowed the intro and headline from another GATA release yesterday...and the video is posted over at youtube.com...and the applicable part runs for the first 8:50 minutes. It's a must watch...and the link is here.

This 12:36 interview was done in the second half of the above-mentioned 'Keiser Report'. It, too, is a must watch in my opinion...and it's also posted over at the youtube.com website...and the link is here.

South Africa, only a couple of decades ago the world's largest producer of gold by a huge margin, but recently overtaken by China, Australia and the U.S., and in danger of being overtaken by Russia, has seen the decline continuing according to Statistics SA.

The state statistical body's report on South Africa's mine production in January this year sees an overall decline year on year for all metals and minerals of 2.5%, but in the gold sector the decline was a massive 11.3%, more than even that in December when gold output fell by 8.2%

For the country's economy, higher metal prices have mitigated the production fall-off to a major extent, but the continuing output decline as many of the country's biggest gold mining operations have reached the ends of their lives and have closed down, and/or are having to work much lower ore grades, sees no end to the continuing downturn. The country's gold output is nowadays less than a quarter of what it was at its peak in the early 1970s and the fall-off has been the major contributor to at best flat global gold production over the past few years.

This story was posted over at the mineweb.com website yesterday...and I thank reader Bob Fitzwilson for sending it along. The link is here...but the most salient points in the article are cut and paste above.