A group of investors rescued Knight Capital Group Inc in a $400 million deal that keeps the embattled leader in U.S. equities market-making in business, but comes at a huge cost to existing shareholders.

There were immediate signs the Jefferies Group-led rescue gave Knight back some of the market confidence it had lost, as two large brokerages resumed routing orders through the company and new data showed volumes picking up from last week.

Blackstone Group LP, rival market maker Getco and financial services companies TD Ameritrade Holding Corp, Stifel Nicolaus, Jefferies and Stephens Inc purchased preferred shares for what works out to be a 73 percent stake in the company, Knight said.

This Reuters story showed up on their website last evening...and it's courtesy of Roy Stephens. The link is here.

Major banks, which often band together when facing government scrutiny, are now turning on one another as an international investigation into the manipulation of interest rates gains momentum.

With billions of dollars and their reputations on the line, financial institutions have been spreading the blame in recent meetings with authorities, according to government and bank officials with knowledge of the matter. While acknowledging their own wrongdoing, institutions are pointing out actions at other banks that they believe are worse — and in some cases, extend to top executives.

One official involved in the case said that banks are emphasizing that “we’re not as bad as the next guy.”

The Swiss bank UBS, which has a history of regulatory run-ins, has shared e-mails, instant messages and other information suggesting it had colluded with traders at Deutsche Bank, HSBC and the Royal Bank of Scotland to manipulate key interest rates, according to court documents and bank employees. In talks with authorities, HSBC is providing its own account of the activities, according to a lawyer briefed on the matter. Citigroup has also detailed rate manipulation with other banks.

This story was posted on The New York Times website late Sunday evening...and I thank Phil Barlett for sending it. The link is here.

Tensions within the eurozone over how to resolve the debt crisis are turning countries against each other and threatening to rip Europe apart, Italian Prime Minister Mario Monti has warned.

Resentment in Italy is growing against Germany, the European Union and even German chancellor Angela Merkel herself, he said, adding that “the pressures already bear the traits of a psychological break-up of Europe”.

Mr. Monti told German news magazine Der Spiegel that he was “concerned” about the deepening divisions and said governments “must work hard to contain it”.

His words were released as Greece pledged further economic reforms to avert bankruptcy at a meeting with the bail-out “troika” of the European Commission, European Central Bank and International Monetary Fund.

This story was posted on the telegraph.co.uk Internet sit on Sunday evening as well...and I thank Roy Stephens for bringing it to my attention. The link is here.

With his appeal in a SPIEGEL interview for national leaders to be given greater independence from parliaments in euro bailout decisions, Italian Prime Minister Mario Monti has sparked intense anger in Germany. Members of both Chancellor Angela Merkel's government and the opposition have labelled Monti's demands "undemocratic."

Italian Prime Minister Mario Monti is concerned that the euro zone is inflicting serious damage on Europe. In an interview with SPIEGEL published on Monday, he said: "The tensions that have accompanied the euro zone in recent years are already leading to a psychological dissolution of Europe." The 68-year-old warned that if the euro were allowed to become a factor in Europe drifting apart, "then all the foundations of the European Project will be destroyed."

But one statement in his interview in particular has sparked a contentious debate. Monti said that European leaders needed to defend their freedom to act against parliaments. "If governments allow themselves to be entirely bound to the decisions of their parliament, without protecting their own freedom to act, a break up of Europe would be a more probable outcome than deeper integration."

This story was posted on the German Internet site spiegel.de yesterday...and I thank reader Donald Sinclair for sending it along. The link is here.

In this last column before my summer break, I cannot resist returning to this year's leitmotif, the euro. Greece is due to run out of money on August 20 and the potential official providers of funds are dragging their feet. Quite understandably. Although the new Greek government agreed to the current bail-out package, it has failed to stick to the conditions. Surprise, surprise.

I suspect that the euro-establishment is ready to cut Greece adrift, perhaps in the next few weeks. Historically, September has been the month for crises. Lehman Brothers collapsed in September 2008; the Northern Rock crisis hit us in September 2007; the ERM crisis happened in September 1992; and the UK left the Gold Standard in September 1931.

Last week, the President of the European Central Bank, Mario Draghi, again failed to deliver the "big bazooka". Of course, he said: "The euro is irreversible". But what else could he say? That it was reversible?

He also used the word "modalities". That got me really worried. I remember when in 1992 the British Chancellor, Norman Lamont, said that he wanted to remove any "scintilla" of doubt that the pound would remain in the ERM. It was out within a month. I resolved that if ever I heard anyone using that word again I would believe the opposite. You can believe in Mr Draghi's "modalities" if you like, but I've heard enough. Draghi is in an impossible position. He is nobly trying to find sticking plaster solutions for gaping wounds.

This is another story that appeared on The Telegraph's website on Sunday evening...and I thank reader Iain Doherty for finding it. The link is here.

The good news is that Greece is not going to go bankrupt -- at least not this month. Despite Athens facing a €3.2 billion ($3.96 billion) bond repayment in August and rapidly running out of cash, the European Central Bank (ECB) last week rubber-stamped a request from the Bank of Greece, allowing it to boost the amount of money it can loan to the Greek government. The move should keep the country's head above water at least until September.

After that, though, all bets are off. The country's international creditors, represented by the troika of the European Commission, the ECB and the International Monetary Fund, left Athens on Sunday, but not before getting the government of Prime Minister Antonis Samaras to agree to push forward far-reaching reforms and further savings measures -- all of which promise to be difficult to push through in the face of increasing weariness on the part of Greek voters.

Furthermore, there are new indications that the euro zone's biggest paymaster, Germany, is rapidly losing its appetite for footing the bill and that Chancellor Angela Merkel will have difficulties keeping her coalition together in the face of difficult currency challenges to come.

This is another offering from reader Donald Sinclair from yesterday's spiegel.de website...and the link is here.

The company's chief financial officer, Simon Henry, told The Times that Shell is cutting back its exposure to European credit risk in the worst-hit economies and putting a higher price on doing business with the region's peripheral nations.

"There's been a shift in our willingness to take credit risk in Europe. The crisis has impacted our willingness to afford credit," Mr Henry is quoted as saying.

Asked whether Shell regarded risk as different in Germany compared with some of the eurozone’s southern and heavily indebted members, he said: “We differentiate between different credit risk.”

Mr Henry is cited as saying that the Anglo-Dutch oil major would rather deposit $15bn of cash in non-European assets, such as US Treasuries and US bank accounts.

The firm is forced to keep some money in Europe to fund its operations, but is keeping the bulk of its reserve liquidity out of the eurozone to avoid growing macroeconomic risk, the report said.

This story was posted on the telegraph.co.uk Internet site early yesterday morning...and I thank Roy Stephens for bringing it to our attention. The link is here.

Using its New York-based operations, a major British bank schemed with the Iranian government for nearly a decade to launder $250 billion, leaving the United States financial system vulnerable to terrorists and corrupt regimes, New York’s top banking regulator charged on Monday.

The New York State Department of Financial Services accused Standard Chartered, which the agency called a “rogue institution,” of masking more than 60,000 transactions for Iranian banks and corporations, motivated by the millions of dollars it reaped in fees.

Senior management at the 150-year-old bank used the New York branch “as a front for prohibited dealings with Iran — dealings that indisputably helped sustain a global threat to peace and stability,” according to a regulatory order sent to the bank. The order requires the bank to explain the apparent violations of law in a hearing later this month and justify why its license to operate in New York shouldn’t be revoked.

The bank said Monday night that it “strongly rejects the position and portrayal of facts” by the agency.

This 2-page story showed up in The New York Times on Monday...and I thank Scott Pluschau for digging it up on our behalf. The link is here.

The Tokyo Stock Exchange has halted trading in derivatives due to a system error, Bloomberg reports.

This includes trading in TOPIX and JGB futures contracts.

Stocks are trading normally. The Nikkei 225 index is up 0.5%.

Earlier during Europe's Monday trading session, the Spanish stock market was shut down for hours due to glitches.

It seems to be an odd coincidence.

You just read the entire 5-paragraph story that was posted on the businessinsider.com Internet site last night...and it's another contribution from Roy Stephens. The link to the hard copy is here.

The first is with John Embry...and it's headlined "Expect Squeeze in Gold, Price Headed Multples Higher". The next is with Rick Rule. It's entitled "We're at Risk of a Spectacular Collapse of Confidence". Here's a blog with Michael Pento that's headlined "This Is The Next Destructive Move By Central Planners". Next is BMO's Don Coxe with a blog entitled "Get Ready: Gold to Re-enter the Financial System". Next is Dan Norcini...and his interview bears the headlined "This is Why Gold & Oil May Explode Higher in August". The first audio interview is with Egon von Greyerz...and the second audio interview is with James Turk.

Copper miners and gold miners with high-quality reserves in the ground in politically secure regions are becoming more and more valuable, said BMO Capital Markets' Don Coxe in his August edition of Basic Points.

"The commodity story is essentially a scarcity story," said Coxe. As global living standards improve, the problem will be finding and producing enough metals and minerals to sustain economic progress.

Noting that gold was priced below $1,000 an ounce as recently as three years ago, Coxe observed that analysts "are agreed that nearly all gold companies now need at least $1,250 an ounce to make any money on current production when the costs of new capex are factored in."

This story was posted on the mineweb.com Internet site yesterday...and I thank Donald Sinclair for finding it for us. The link is here.

Interviewed for GoldMoney by the economist Alasdair Macleod, gold and silver market letter writer Turd Ferguson remarks that recent declines in gold and silver have been manufactured to help relieve bullion banks of their short positions, a development he thinks will soon will lead to an explosion in prices.

While recommending continuing acquisition of the monetary metals -- real metal in hand -- Ferguson warns against short-term trading in the metals because their markets are so manipulated.

Ferguson believes that "the great Keynesian experiment" in fiat money is ending and will be replaced with some form of gold backing for currencies. I borrowed this headline and the introduction from a GATA release on Saturday. The interview is 27 minutes long and is posted in audio format at the goldmoney.com Internet site here.

Few financial newsletter writers work harder than Jay Taylor, editor of J. Taylor's Gold, Energy, and Tech Stocks newsletter. Taylor not only provides weekly analysis from a hard-money point of view but also produces an Internet radio interview program on which GATA Chairman Bill Murphy and your secretary/treasurer have appeared and speaks on financial television and radio programs and at financial conferences around the world. Last week Taylor was appearing on Business News Network in Canada and his latest letter describes how he was urged not to mention GATA on the air.

This is a change of attitude for BNN, as for years, under the editorship of Jim O'Connell, the network was glad to inquire into gold market manipulation and let GATA be part of the discussion. But O'Connell died five years ago, perhaps taking BNN's courage with him.

Taylor's letter about BNN and GATA is posted over at the gata.org Internet site...and the link is here.

MineWeb's Lawrence Williams today takes note of newsletter writer Jay Taylor's admonition by a producer for Business News Network in Canada not to mention GATA on the air...and also taking note of it is Jeff Nielson of SilverGoldBull.com. The GATA release containing both items is linked here. Both commentaries are worth the read.

This was the headline to Monday's edition of Casey's Daily Dispatch. The commentary by Vedran Vuk includes some interesting graphs...and it's worth reading if you have the time. The link is here.

But gold fizzled even before it became clear that the Fed and the ECB were not going to make reflationary, gold-stimulating moves. Measured by the active December CME contract floor close, the metal lost 0.54% on the week, while the NYSE Arca Gold Bugs Index was down 1.07%.

To be sure, this involved a considerable recovery from the alarming lows of mid-week.

But the damage done was still very severe. The thoughtful website The Golden Truth published an essay on Friday titled “Chart Porn: Value Play Of The Decade,” featuring a chart from 1984 comparing the PHLX Gold/Silver Index against gold. Gold shares have fallen to a new low: 2012 has been ghastly. From the peak in 1996, the ratio is down 70%.

The Golden Truth annotated its chart: “Are mining companies going out of business …or absurdly cheap?”...and there is unusual division among what I call the “Radical Gold Bugs” as to what is happening.

This marketwatch.com item, which I found in a GATA release from yesterday, is a must read, especially towards the end where it talks about gold imports for July in South Korea, Turkey...and China. The link is here.

Gold coins discovered last month in an ancient crusader castle that lies in what is now Israel provide surprising information on how economic transactions were made about 1,000 years ago.

“The scientific value is unprecedented,” Oren Tal, director of the excavation and chairman of Tel Aviv University’s Department of Archaeology and Ancient Near Eastern Cultures, said in an e-mailed statement. Crusaders “were not afraid to use older coins to complete large transactions and run large- scale businesses,” he added.

The hoard, which contains mostly dinars dating back to the Fatimid Period that predated the crusaders, was discovered in an excavation of the Arsur castle, also known as Apollonia.

The site was a stronghold between the ancient ports of Jaffa and Caesarea and served as a trading center for industrial and agricultural goods from 1241 until its destruction in 1265, when it was attacked by Egyptian Sultan Baybars and conquered after a 40-day siege.

This Bloomberg item was posted on their website late Monday afternoon...and I thank Washington state reader S.A. for sending it. The link is here.

A four-year investigation into the possible manipulation of the silver market looks increasingly likely to be dropped after US regulators failed to find enough evidence to support a legal case, according to three people familiar with the situation.

The Commodity Futures Trading Commission announced that it was investigating "complaints of misconduct in the silver market" in September 2008, following a barrage of allegations of manipulation from a group of precious metals investors.

In 2010, Bart Chilton, a CFTC commissioner, said that he believed there had been "fraudulent efforts" to "deviously control" the silver price.

This subscriber-protected story shows up in the Financial Times on Sunday...and it's posted in the clear in this GATA release. I asked Ted Butler what he thought of the story...and he said that "It's clearly a trial balloon designed to gauge reaction." I thank U.K. reader Tariq Khan for being the first person through the door with this...and the link to this absolute must read story is here.

There was also a Zero Hedge story on this on Sunday evening that was headlined "Libor May Be Manipulated, But Silver Is Not, CFTC To Conclude"...and I thank Elliot Simon for that item.

Silver Doctors today quotes U.S. Commodity Futures Trading Commission member Bart Chilton as criticizing yesterday's Financial Times story reporting the end of the commission's investigation of the silver market. The FT report, Chilton is quoted as saying, is "premature" and "inaccurate." And Chilton today repeats his belief that there have been improprieties in both the silver and gold markets.

The extensive commentary by Chris Powell, plus the link to the silverdoctors.com story is embedded in this GATA release...and I consider it a must read. The link is here.

More support for U.S. Commodity Futures Trading Commission member Bart Chilton comes from financial writer Christopher Barker, who observes that suspicion of U.S. government manipulation of the gold and silver markets is growing throughout the world. Barker's commentary is headlined "CFTC Commissioner Bart Chilton Comments on the Silver Investigation". It's posted over at the Motley Fool website...and the link is here. It's definitely worth reading.