http://www.nrlmry.navy.mil/satdat/goes8_images/trop_atlantic_ir/LATEST.jpeg

All kinds of storms, financial & weather both. Physical holdings looking better every day. Rare coins and stox are up, all thats left is the gold derivatives market to take off...

nice netiquette rules.

I guess it's time now to move on to bigger and better discussion groups. There are many sites around that will be quite receptive to your contributions. In them, you'll find the discourse that you seek. But don't attempt any intelligent analysis of the precious metals markets or you may be asked to leave. Here's a few to get you started:

soc.culture.palestine

soc.culture.lebanon

soc.culture.jewish

soc.culture.israel

alt.revisionism

Have fun. Don't forget to write.

If I recall correctly, he finished the conversation telling me how he was going to tell his clients at the seminar that capital losses aren't all that bad as they can be used to offset capital gains. Oh boy, do I wish him the best of luck with that sales pitch. That'll sure calm his clients down ( *grin ) I don't think he is going to get a standing ovation with that style of presentation and if he doesn't tune into what's happening soon, he may be risking his life by attending such seminars in person.

Regards

Rolly

I forget the names of the other two hurricanes waiting in the wings. Don't have a clue where they will wind up.

I'm flattered that you thought I might know all of these wealthy clients, but sadly my bank account does not come close. I'd be happy with a small fraction of one million. I have a friend who is in equities, and is worth a couple million. When the markets tanked recently, he lost more in one day than I and spouse make in a year. He was in shock. He is not so sure I'm nuts anymore.

I'll bet the reason LTCM is getting bailed out so quickly is that the derivatives trading industry does not want to lose their clients -- which might even include a few CB's. I think the risk of a world-wide financial crisis is rising.

I don't think CB's will be anywhere near as open about their failed trades as LTCM.

Interesting that the rumor spread that LTCM had gold derivatives trades ( now denied ) . As our gold bull gathers strength, some rumor like this is bound to have electrifying effects on the gold markets fairly soon.

1 ) Japanese Banks: Perhaps we need a Diogenes to investigate the Japanese banks, running through the streets of Tokyo, yelling 'Is there a solvent bank?'. Sign of the times.

Perhaps Diogenes' time was not so different from our current one.

2 ) Derivatives trade losses: I get a feeling of foreboding -- and that is the ground state around here ( Kitco ) . The derivatives clock is ticking. Exponential derivatives growth by definition cannot go on forever in real life -- just in theoretician's minds.

Anyone know what we watch? Sadly, I think there is no early warning indicator, except the frequency of firms declaring bankruptcy due to bad derivatives trades. Good thing we heard about the current wipeout of LTCM. Think the liquidity crisis about 10 days ago was due to the news of LTCM only? The next time we may not just have a twitch.

Perhaps we will get a little warning if long term interest rates start to rise. Comments, anyone?

I must admit I do not know how a 'credit spread' works, but the article says that the scheme would work as long as treasury bond prices were dropping. But -- as we know -- they went up. How about explaining what this credit spread is for naive me? I'll bet some others on Kitco don't fully understand it either. I would guess that a credit spred might work with falling or rising rates, as long as you set it up correctly.

Boy -- when John Meriwether and derivatives Nobel prize winner Scholes get caught on the wrong side of a derivatives trade, that does not bode well for all of those less sophisticated investors such as the banks. Guess it shows you that all the math in the world -- and expensive models too -- dont work all the time. The market rules can 'change on a dime'. And then the model dosn't work. My guess is that the derivatives traders get lulled into a false feeling of security when they make a fortune, and forget to protect themselves from the day the rules change. If they raise the stakes too high, one trade can wipe them out.

I agree that the South American situation is far more serious. Closer to home. Don't you find it interesting how quickly the Hedge funds get support when they get in trouble? Recently there have been entire countries that don't get that kind of service. It is clear that bad debt come in many flavors, and certain kinds get prefferred treatment.

But -- the Russian debacle may be closer to home, because Brazil and other South American companies bought Russian debt, and we ( USA ) unfortunately have invested a great deal in South America, though I don't know how bad it is. Last I heard Brazil alone had 60 billion at risk short term, due in the next month or so. Don't know how bad the Mexico situation is, but it is clearly not good.

My guess is the G7 pledged to support Brazil because they are worried about the financial domino effect. Perhaps nothing will happen until about a month or so after the Brazilian elections on Oct 8.

Next crisis November?

What puzzles me is that if the IMF is broke, what can the G7 give to Brazil? Promises only won't go very far.

Think the Oil rally will continue through the winter, or is this the first wave only? Things sure move fast when they move, don't they? Kept some of my energy funds ( FSESX ) during the recent downturn - was -20% at one time. Now plus 20%. Could be the US dollar, Kosovo, or Iran/Afganistan. N Korea lobbing a missle uncomfortably close to Alaska, and Saddam seem distant second choices.

Notice that we have three hurricanes heading our way now? Texas grade weather this year?

What puzzles me is there is nearly $2 trillion in bad debt and counting since the SEAsia episode, and I still don't know if it was rolled over or not. Usually 'the powers that be' try to figure out how the make the unknowing public pay for the loss -- low interest bonds, etc.

Judge for yourself about this wave count from about Dec 1997 bottom in Gold vs Rand terms.

We could be past wave 5, or in a ( current ) downtrend in a larger pattern. Who knows?

http://pacific.commerce.ubc.ca/xr/plot.html

When we have our day of reconing from the derivatves market, I think it will be like what we had about a week ago -- a sudden drying up of liquidity -- no indicators warning -- nothing.

http://www.WorldNetDaily.com/exclusiv/980924.exrivero_clinton_bo.html

Also, when people mention 'bull or bear market, it is not always clear by the context whether they refer to the DOW or to the Gold Market.

France 3423.78 +200.29 +5.85%