U.S. futures industry investigators are looking into why Iowa-based collapsed brokerage PFGBest used a tiny accounting firm that appears to be operating from inside a suburban Chicago home to audit its books, according to a person familiar with the matter.

Experts said the use of such an auditor should have been a red flag to regulators of a futures brokerage with more than $500 million in assets and several hundred employees across the United States as well as in Shanghai and Canada.

There are comparisons with the way convicted Ponzi schemer Bernard Madoff used an auditor operating out of a strip mall in suburban New York and convicted swindler Allen Stanford's investment firm retained a little-known auditor on the Caribbean island of Antigua.

This must read story was posted on the Reuters Internet site very early yesterday morning...and I thank reader 'David in California' for sending it our way. The link is here.

The Federal Reserve and other central banks manipulate interest rates every day, James Grant of Grant’s Interest Rate Observer told CNBC’s “Closing Bell” on Thursday.

“The Fed is in the business of trying to manipulate markets, the macro economy, interest rates, unemployment and inflation through various monetary means, including the twisting around of yield curves and interest rates,” Grant said.

Commenting on the growing London Interbank Offered Rate fixing scandal, Grant said “the idea that the banks are in charge of manipulating interest rates is absurd. The central banks do it all the time and they do it massively.”

The Libor scandal might get bigger, Grant conceded, but outrage should be directed at the world’s central banks, he said.

Mr. Grant certainly doesn't pull any punches...and I thank West Virginia reader Elliot Simon for bringing it to our attention. It's posted on the cnbc.com Internet site...and is a very short must read. The imbedded video clip runs for six and a half minutes. The link is here.

When Timothy F. Geithner ran the Federal Reserve Bank of New York, he acknowledged fundamental problems with the process for setting key interest rates in the midst of the 2008 financial crisis, according to documents provided to The New York Times.

Mr. Geithner, who is now the United States Treasury secretary, questioned the integrity of the benchmark as reports surfaced that Barclays and other big banks were misrepresenting the rates. In 2008, Barclays had several conversations with New York Fed officials about the matter.

Mr. Geithner then reached out to top British authorities to discuss issues with the interest rate, which is set in London. In an e-mail to his counterparts, he outlined reforms to the system, suggesting that British authorities “strengthen governance and establish a credible reporting procedure” and “eliminate incentive to misreport,” according to the documents.

But the warnings came too late, and Barclays continued the illegal activity.

This story was posted on The New York Times website late last night...and I thank Phil Barlett for his first story of the day. It's worth reading...and the link is here.

State attorneys general are jumping into the widening scandal over whether banks tried to manipulate benchmark international lending rates, a move that could open a new front against the top global banks.

A handful of state attorneys general said they are looking into whether they have jurisdiction over the banks, and are starting preliminary discussions to determine what kind of impact the conduct involving the Libor rate may have had in their states.

"Our office is aware of the allegations around the manipulation of the Libor, and we are working with other state agencies to determine whether Massachusetts has suffered any losses as a result," a spokesman for Massachusetts Attorney General Martha Coakley said.

This Reuters story was posted on their Internet site late on Wednesday evening...and I plucked it from yesterday's edition of the King Report. The link is here.

A report from the Federal Reserve Bank of New York suggests that the bulk of equity returns for more than a decade are due to actions by the US central bank.

Theoretically, the S&P 500 would be more than 50 percent lower—at the 600 level—if the bullish price action preceding Fed announcements was excluded, the study showed.

Posted on the New York Fed’s web site Wednesday, the study sought out to explain why equities receive such a high premium over less risky assets such as bonds.

What they found was that the Federal Reserve has had an outsized impact on equities relative to other asset classes.

I thank reader E.F. for bringing this second CNBC story from yesterday afternoon. It, too, is worth reading...and the link is here.

After the financial crisis, regulators vowed to overhaul supervision of the nation’s largest banks.

As part of that effort, the Federal Reserve Bank of New York in mid-2011 replaced virtually all of its roughly 40 examiners at JPMorgan Chase to bolster the team’s expertise and prevent regulators from forming cozy ties with executives, according to several current and former government officials who spoke on the condition of anonymity.

But those changes left the New York Fed’s front-line examiners without deep knowledge of JPMorgan’s operations for a brief yet critical time, said those people, who spoke on the condition of anonymity because there is a federal investigation of the bank.

This story was posted on the dealbook.nytimes.com website late on Wednesday evening...and I thank reader Phil Barlett for sending it. It's worth skimming...and the link is here.

Regulators are examining JPMorgan Chase’s sales tactics, after claims that the nation’s largest bank pushed its own mutual funds over competitors’ investments.

Authorities are responding to current and former JPMorgan financial advisers who said they had felt pressure to sell the bank’s products even when cheaper or better performing options were available.

Several brokers told The New York Times that they had been encouraged to favor JPMorgan funds, and they described a broader culture that emphasized sales over client needs. Also, in the marketing materials of one major offering, JPMorgan published hypothetical performance results, even though actual returns existed, according to internal bank documents reviewed by The Times. In each case, the actual gains were lower than the theoretical results.

This is another story about JPMorgan that's also courtesy of Phil Barlett...and the link is here.

Jamie Dimon will do his best to put the "London Whale" trading flap behind him on Friday when JPMorgan Chase & Co reports earnings, telling Wall Street that the bank has capped losses from the bad trades and found the key risk management flaw behind the positions.

But that doesn't mean the firm is off the hot seat.

Former employees and experts outside the bank say JPMorgan may be underplaying deeper management problems. Senior executives at the bank missed multiple red flags at the group responsible for the bad trades, including high turnover among risk managers, that raise questions about how far up the chain blame should be assigned.

This Reuters story was posted on the chicagotribune.com website early yesterday afternoon...and I thank Washington state reader S.A. for sending it along. The link is here.

HSBC, the largest financial institution in Europe, has become the latest British bank to reveal major internal-control problems, saying that senior officials would apologize to United States lawmakers next week for not cracking down soon enough on money-laundering activities in America.

The money laundering, which a United States Senate subcommittee indicates was linked to terrorism and drug deals, could result in HSBC paying fines of up to $1 billion, according to analysts.

“Our anti-money-laundering controls should have been stronger and more effective, and we failed to spot and deal with unacceptable behavior,” Stuart T. Gulliver, the chief executive of HSBC, wrote in a memo that became widely circulated after it was released to employees late Wednesday.

This story was posted on The New York Times website late yesterday evening...and I thank Phil Barlett for his third and final offering in today's column. The link is here.

The single currency has been sliding relentlessly since the European Central Bank cut its discount rate to zero last week, triggering an exodus of money market funds, but has now broken key resistance levels watched by technical analysts.

It tumbled to 0.7882 against sterling today, the lowest since late 2008, overpowering efforts by the Bank of England to weaken the pound with its latest £50bn burst of quantitative easing.

Against the dollar it fell below $1.22. “We’re on the brink of a very bearish turn for the euro: if we break the 2010 low of $1.19, we’re going to see a big move down,” said Ian Stannard from Morgan Stanley. “The global growth picture is really worrying markets so people are retreating to the safe-haven of the dollar.”

I found this Ambrose Evans-Pritchard offering on the telegraph.co.uk website yesterday evening...and it definitely worth reading. The link is here.

Near-bankrupt Greece is dependent on aid from the European Union and the International Monetary Fund, who have demanded spending cuts that have helped push its economy into a fifth year of recession and forced thousands of businesses to close.

The jobless rate for April was up from a revised 22pc in March, Greece's statistics service EL.STAT said on Thursday. It also marked a sharp rise from 16.2 percent in April last year.

There was one piece of slightly better news. Youth unemployment, which has more than doubled over the past three years, fell slightly in April to 51.5pc, from 52.8pc in March.

Analysts said that the jobless rate could rise further, despite a brief respite thanks to the summer tourism season.

This story was posted on The Telegraph's website yesterday afternoon local time...and the link is here.

China's economy reported 7.6 percent of growth in the second quarter, the lowest since the first quarter of 2009 when the global financial crisis was rampant, amid concerns about the slow-down of the second-largest in the world and the strongest one in the major economies.

The National Bureau of Statistics said on Friday that in the first half, the country's economy grew by 7.8 percent to 22.71 trillion yuan ($3.56 trillion). The growth in the first quarter was 8.1 percent.

It is the lowest growth in the past 13 quarters.

China's manufacturing, foreign trade and investment have been slowing down this year, triggering worries about a hard landing of its economy, whose role is more important as the eurozone is still struggling with the debt crisis, the US is still on the way to recover and emerging economies such as India and Brazil are also slowing down.

This story was posted this morning on the chinadaily.com.cn website...and is a must read. The graph alone is worth the trip...and I thank Hong Kong reader Graham C. for sharing it with us. The link is here.

The first is with Citigroup analyst, Tom Fitzpatrick. It's headlined "Stocks to Plunge Another 15% to 20%". The second blog is with Bill Fleckenstein...and it's entitled "Central Banks & The Fed Are Close To Panic". And lastly is this blog with The Porta Group's Robert Fitzwilson. It bears the title "A Clash Of Two Systems On A Global & Historic Scale".

Merrill Lynch has added its voice to the chorus of gold bulls who have been predicting that bullion will hit $2000 an ounce.

Francisco Blanch, Head of Global Commodity & Multi-Asset Strategy Research at the investment bank, says he expects the Federal Reserve to initiate an asset-purchasing program of as much as $500 billion in the second half of the year, which will drive spot gold much higher by the end of the year.

"We think that $2,000 an ounce is sort of the right number,” Blanch said on CNBC Asia’s “Squawk Box” on Thursday. “We believe that ultimately the Fed will be forced to do quantitative easing. If it happens in September, as our economists expect, we will get a rally sooner in gold. If it happens after the election (in November), we will get the rally a little bit later; probably we will touch $2000 an ounce sometime next year.”

I thank West Virginia reader Elliot Simon for his second story in today's column. It was posted over at the CNBC website very late on Wednesday night...and the link is here.

Gold will climb to a record by yearend as the global economy slows from the weight of too much debt, says Eric Sprott, the founder and chairman of Canadian fund manager Sprott Inc.

“I just can’t imagine the demand for gold is going down,” he said in a July 9 interview at Bloomberg’s Toronto office. “I don’t personally see a solution to the problem that we’re in, the financial leveraging issue that we all have where everybody wants to shed debt and there’s no buyers.”

Sprott’s company manages funds investing mainly in gold, silver, and precious-metals equities. He expects bullion will rise as investors seek the safest assets while governments spend to stimulate their economies, increasing chances that inflation will accelerate.

This story was posted early yesterday morning on the Bloomberg Internet site...and the link is here.

I'm not going to steal Chris Powell's thunder on this one. This GATA release contains links to two different gold commentaries that are both must reads...as is his extensive preamble to both. The mineweb.com story [one of the two essays embedded in this GATA release] by Lawrence William entitled "LIBOR scandal brings gold price manipulation once more to the fore" should be framed for posterity. This 'double header' is posted over at the gata.org website, so top up your coffee and then click here.