- Date: Mon Sep 28 1998 23:33
Eldorado (@the scene) ID#173274: - Envy -- The paroxysm of 'money' chasing safety seems to have begun. It isn't indelibly engraved yet, but the hand-writing on the wall is becoming more legible by the day. It will be MOST interesting when it becomes just a 'wee' bit more clear to the near-sighted. Perhaps they'll put their reading glasses on one day real soon. The change should be sudden, immense, and unforgettable!
- Date: Mon Sep 28 1998 23:32
AZAU (Eldorado) ID#247273: - you have cut to the quick here, i.e., the demise of the usury based economy. When the parasites overwhelm the producers, that is the turning point. No one likes to talk in this manner; it is taboo for fear of offending those engaged in those activities, and getting fat from it. It is unpleasant, but we must keep this in focus as one of the major problems facing the economy. Imbalance creates fear, hate, and all those unseemly human attributes summed up as envy. Both on the side of the haves and the have-littles. thanks for your astute observations,
- Date: Mon Sep 28 1998 23:27
RB (Mozel) ID#408170: - Amen to you Sir. No one could have said it better.
The sadness in my heart for freedoms lost almost overwhelms me.
Thank you for your 23:02 post.
RB
- Date: Mon Sep 28 1998 23:25
EJ (WSJ Interactive Edition Editors
Copyright © 1998 EJ/Kitco Inc. All rights reserved - DOW Tops 8000
12/1/97
The Dow Jones Industrial Average soared above 8000 on Monday, its first move above that mark since the Asian financial crisis boiled over in mid-October. The average closed up 189.98 to 8013.11, while the Nasdaq composite jumped 30.17 to 1630.72.
----
Stock Prices Slide
12/18/97
The Dow Jones Industrial Average dropped about 110 points on Thursday, as investors remained worried about fallout from Asian economic turmoil and the outlook for U.S. corporate profits.
----
Stock Market Rallies
12/29/97
The Dow Jones Industrial Average rallied more than 110 points to about 7792 on Monday, amid hopes that stability will return to Asian financial markets.
----
Back to the future. Things seem to stay the same forever.
Then suddenly...
G'Nite, all. Sleep well.
-EJ - Date: Mon Sep 28 1998 23:23
James (Suspicious@Yes, I've heard it before. But it never ceases to rankle when those stocks ) ID#252150: - keep going up. What will really pi** me off is if the XAU tanks tomorrow after I covered my PDG short today. I think that is a real possibility because of producer selling & very nervous longs.
- Date: Mon Sep 28 1998 23:16
Eldorado (@the scene) ID#173274: - mozel -- And as usual, I must second your basic sentiment on that most important subject! But I have a hard time swallowing the statement that Congress is in control. Seems that they are just the rubber stamps for the presidential directives and executive orders.
- Date: Mon Sep 28 1998 23:13
ERLE (@Eldorado) ID#190411: - 22:55 Do you consider what those people could do to our earth if they were allowed to have a 4WD yuppiemobile? The consequences would drive algore to paroxisms.
I am advising my employees to hoard all of the money that they can.
Don't buy it if you cannot live without it. The consumer crowd is going to have their face torn off.
I see what is ahead, and it makes me physically sick. Mental too.
Yuppie houses for 30 cents on the dollar, coming to your hometown.
I am so indebted to my betters in gommint, for giving me the life that I have.
- Date: Mon Sep 28 1998 23:08
Earl (Mozel:) ID#227238: - Incontestably well said.
- Date: Mon Sep 28 1998 23:02
mozel (@JP) ID#153110:
Copyright © 1998 mozel/Kitco Inc. All rights reserved - After this deflationary phase is over and most of the debts have been wiped out, a golden age of PROSPERITY will begin. It will be based on US currency tied to gold as the anchor of the new monetary system.
I share your views on the deflationary phase. USG will push hard on the strong. To no avail. Total on book USG debt is 5.5+ Trillion. At risk is 26 Trillion in derivatives exposure by the banking system. Additionally, there are another 15 Trillions of unfunded liabilities and contingent liabilities from gurarantees of securities. It is not difficult for me to envision a scenario in which the 1930's method of reflating the banking system with credit will be foreclosed to USG.
From the time that Congress carved West Virginia out of Virginia and admitted it to the Union as a Provisional State in direct contravention of the Constitution, the die have been cast for us. By degrees government on this continent has been restructed. Congress has, practically speaking, a position of Absolute Power which does, in fact, corrupt absolutely. The only federal court whose judicial power is not restricted and regulated by Congress is, best case, the US Supreme Court. The President has, since the attempted impeachment of Andrew Johnson, served at the pleasure of Congress. The common-law Republics in the states have been restructured into greenback dependant copies of USG. They are Socialist Martial Rule or Feudal Rule Republics.
If you want to see our future, look to the Union of Soviet Socialist Republics. Because a Union of Socialist Republics is what we have now on this continent. The people of the former USSR lost their heritage under decades of socialist rule. So, have likewise the people of America. They have lost their common-law Law heritage. It is like alien knowledge to most readers of this board, I think. Their other cultural and religious heritage is also mostly gone and under constant attack by government. The holders on are officially cultists in the words of Janet Reno.
USG has never kept a committment on the subject of gold. It has defaulted on every one. The Constitution requires gold and silver coin in circulation now. Do you see any ? Central Banking, accommodated to the Constitution by a feckless Supreme Court, is nevertheless contrary to the whole spirit and purpose of the Constitution and the Decleartion of Independence.
Congress is uncontrolled in its power to borrow and to tax and supreme over the States and the other two branches of government. There will be nothing out of there but vanities until, I fear, the people here as in Russia begin to long for a Maximum Leader to conquer chaos. Everyman for himself; the devil take the hindmost. I agree wholeheartedly with Petronious assessment that the USA is an empty shell, the greater majority of the people devoid of the founding values, knowledge, traditions, and strengths of character. We, as a nation, have been living on the inheritance of our grandfather's father and his before him for a long time, but the accounts and the purse are almost empty. Until there is a relearning of our heritage by a substantial number of men and women, the chance of this people fixing things, governmentally, is about as remote as that of a band of savages repairing a broken 747 - Date: Mon Sep 28 1998 22:58
Bully Beef (I hope gold drops tommorrow. I'm on the verge of being smug.) ID#260119: - I hate smug. Stardate 09/28/98... Commander Troy what can you tell us about theGOLDBUGS?... Well Captain... I sense that they are experiencing some form of joy mixed with pride. Yes Captain I think they are becoming smug. Captain I sense that we should sell MICROSOFT! BILL GATES is evil!!! Beam us up Scotty there is no intelligent life here only holders of stocks and bonds and hedge funds an an an AHHHHHHH we are breaking up...
- Date: Mon Sep 28 1998 22:58
Envy (Gold Bull) ID#219363:
Copyright © 1998 Envy/Kitco Inc. All rights reserved - My call for the beginning of the gold bull is the same as it has been - it'll start when there isn't anywhere else left to run. When you've got 10000 yen in your pocket and you see the yen is falling, you buy whatever is going up, namely, dollars. When you see dollars start slipping and yen aren't climbing, you look for something else. The only thing left after dollars is another currency, precious metals, or something else that will retain it's value in the face of an economic slowdown. You think things move when speculators get in on them, wait until you see what the conversative capital preservation folks do to a market, now those guys get serious about stuff. There just isn't going to be anywhere else to run.
- Date: Mon Sep 28 1998 22:57
Earl (pdeep:) ID#227238: - Ayn Rand was once asked what she thought about the poor. Her reply? Don't be one of them. .......... Be thankful you're not in the camp with those who love hot wheels and heavy gearing.
- Date: Mon Sep 28 1998 22:55
Eldorado (@the scene) ID#173274: - Gollum -- 'Tiss a real shame that the multi-nationals never allowed the third world 'slaves' to have a wage comensurate with becoming consumers. Thus the extreme over-abundance of capacity. We, as just so many people, too much debt as it is, and having probably already bought it anyway, simply cannot take up that kind of slack for long. Now their corporate profits that they much enjoyed on the backs of their slave labor is/will totally evaporate!
- Date: Mon Sep 28 1998 22:54
Gollum (Another night) ID#43349: - Off to retire. Then up early to see what the dawn brings.
Remember, remember the depths of September.... - Date: Mon Sep 28 1998 22:54
EJ (sharefin) ID#45173:
Copyright © 1998 EJ/Kitco Inc. All rights reserved - I can't recall the day I posted it so I'll redo it for ya, fin that shares.
He said he was sticking to his earlier prediction of Y2K system fixes. Keep in mind he has no insight into embedded stuff; he sells Y2K mainframe software tools. The following he feels will get fixed:
90% critical
50% moderate
10% non-critical
He feels the 10% critical failures will come from big corporates that screwed up their estimates of what was critical and either wasted time fixing non-critical problems or simply overlooked important stuff.
He has become more pessimistic about the impact of the 10% that he feels will not get fixed.
I maintain that on Y2K the bunch of crappy software that runs everything now that doesn't work very well in the first place will work even worse than before and will be fixed with an extraordinary effort. Recall the Hong Kong airport. Management told the geeks to put the systems on line even tho the geeks knew it wouldn't work. Then they ran around and got it all working, but it took a few months and there was much pain.
-EJ - Date: Mon Sep 28 1998 22:52
Earl (James:) ID#227238:
Copyright © 1998 Earl/Kitco Inc. All rights reserved - There is probably a lot that the CBs can do to frustrate matters but that's purely on a short term basis. As things now stand, the matter of gold, and stuff in general, is rapidly escaping their control. ...... Short of outright prohibition of ownership and/or confiscation. Neither of which is likely.
In the meantime, a potential short term reversal of 50% of recent gains ain't a big deal in the larger scheme of things. It's expected along the way. We have suffered worse and survived ...... and I won't be shaken out at the bottom.
Erle's personal comments earlier are worth reviewing. They outline exactly the gravity of the present situation. ..... from the CBs perspective.
Otherwise: Believe little, resist much. - Date: Mon Sep 28 1998 22:50
pdeep (Earl) ID#174103: - You remind us about the US consumers, some of whom have essentially bought equities on 100% margin by using thei credit cards and home refinancing cash. If equities do tank, how will *those* positions unwind? Brrr. Gives me the shivers.
- Date: Mon Sep 28 1998 22:50
Suspicious (James: No one ever went broke taking profit. ) ID#287312: - Bet you've heard that before : )
- Date: Mon Sep 28 1998 22:47
Suspicious (When the gold bull will be confirmed is ) ID#287312: - when the anouncement of a CB bullion sale is ignored by the market. When the equities market does panic and takes the XAU down with it, then is time to buy PM shares and XAU calls. IMHO
- Date: Mon Sep 28 1998 22:46
ERLE (More gold deflation) ID#190411:
- - The gold tied to the yen argument wears thin if examined by a person outside of the bubble.
Surely, the Japanese can buy fewer grams of gold with their savings when the POG rises in their currency.
So, what else is new?
Did any of you stop buying oil products when the price rose relative to your national currency? No, you got less of it per unit, but you could not forego that.
That is a consumable, as is paper money. But, when the paper gets consumed, as it is going to be soon, do you forego real money?
No, you just get less of it. When the flight to money is leaving the fiat currencies behind, you will simply have to exchange more paper for the real money. There is nothing arcane about that.
LGB's posts about the superior value of investing paper into productive enterprises are merely the opposite side of the same coin. - Date: Mon Sep 28 1998 22:46
Pete (EJ-Yield Curve Info) ID#222231: - http://www.marketscience.com/yield.htm
- Date: Mon Sep 28 1998 22:44
Eldorado (@the scene) ID#173274:
Copyright © 1998 Eldorado/Kitco Inc. All rights reserved - ERLE -- Being that the US is much the only nation driving consumption and given that the populace is now tapped out of 95% of their credit, I think that the government is now left with two options, based upon how/when it is to come down. One ) Lower rates, and lower them more. Lower credit requirements much more. Make sure the people can keep on spending. Make sure they get BIG raises so they CAN keep spending. Also 'push on the string' elsewheres so they might also be consumers. Two ) Let it disintegrate at its current pace, while making token gestures of 'remedy', and finally call out the jack-boots, which they would do sooner or later anyway. usury-based systems always end the same way and anything they do in the interim is just biding time.
- Date: Mon Sep 28 1998 22:42
SDRer () ID#290172:
Copyright © 1998 SDRer/Kitco Inc. All rights reserved - Far Eastern Economic Review
All Aboard EU commissioner outlines Asia's role
August 27, 1998
The euro is coming and Asia must be prepared. Those who are will prosper, those who aren't will fall behind. So says Yves-Thibault de Silguy, the European Union's monetary-affairs commissioner. He spoke recently with the REVIEW's Brussels correspondent, Shada Islam, about what Asia should expect and how it can prepare.
What do you think will be the euro's biggest effect on Asia?
As of January 1, 1999, European companies who'll be switching to the euro in their own internal accounts will start asking their Asian partners to use the euro. Asian suppliers who're capable of working in the euro will be able to take advantage of this. At the moment, all transactions within Europe are in different national currencies. From next year, these will automatically be in euros. I believe that some European corporates who use dollars in their international transactions will be switching to the euro.
- Date: Mon Sep 28 1998 22:42
James (Earl@You may well be right,--in which case I will be extremely POd that in the) ID#252150: - last week I sold all my AU stocks, my PDG ABX LEAPS & even most of my BGR Prec mtls fund. I still have a real problem picturing the CBs standing around wringing their hands while their currencies & bonds are being trashed as investors seek a safe haven in AU.
Then again, this could be the new, new paradigm.
- Date: Mon Sep 28 1998 22:42
TheMissingLink (Highrise, BEARX) ID#373403: - I too decided to diversify a little from my 100% gold holdings and went into BEARX. Now I am kind of regretting not being 100% gold. Even with a market crash of 1,500, a gold increase to $330 would probably make gold equities a much better investment.
- Date: Mon Sep 28 1998 22:39
Gollum (@Earl ) ID#43349: - Perhaps if the cash hadn't been pulled out of global economies the asians, South Americans, Russians, and others would still be using all the commodities now in over supply.
- Date: Mon Sep 28 1998 22:38
Reify (RANGY!?) ID#413109: - Seems to be a popular subject of discussion.
Patience my good fellows- I should know never had much.
http://www.iqc.com/chart/default.asp?period=180&time=week&chart=bar&chart1=bb&volume=y&stochastics=y&symbol=rangy
And then some guy named Confusion said something about a picture once,
having more value than words. - Date: Mon Sep 28 1998 22:35
TheMissingLink (Gut Feeling Crash Indicators Going Crazy Tonight!) ID#373403:
Copyright © 1998 TheMissingLink/Kitco Inc. All rights reserved - The Federal Reserve is not really giving up it's fight over inflation. Greenspan stated that we will do what is good for OUR economy. He went on to say that global problems are only eating away at the fringes of our economy. Our economy is still going strong and wage inflation is reportedly on the creep.
Still, he has committed himself to the rate cut and markets will surely be crushed without one now. Knowing that he will be changing course in the near future he cannot risk any more than a 1/4% cut. Further, LTCM and other hedge funds which have made massive, FED RECOGNIZED MARKET DESTABLIZING, bets that rates would rise, his cut can only be for show. He also cannot fire off all cannons now anyways as he needs the ability to make decisive cuts later if things get worse.
We are the reserve currency so the deflation going on in the world may not affect us similiarly. Dollars may soon come pouring in to the United States due to the Europeans and maybe Asians forming their own currency blocs. We have abdicated our position as the worlds central bank by taking an isolationist monetary stance, for better or worse. The rest of the world may rightly assume Bretton Woods dead and dishoard dollars.
Precious metals are reacting to the future. Even without a rate cut, the dollar is headed lower as there will be less future demand for dollars. The action tomorrow will be a 1/4% cut and the markets will react violently to the downside.
We are in a global state of overproduction and that is the reason for the credit crunch, not liquidity. Lower interest rates will not spur economic activity as the future holds uncertainty. Fear will cause all rate cuts and tax cuts to become a welcome source of reducing credit risks for both borrowers and lenders. Witness Japan with a nonexistant interest rate and liquidity induced bankruptcies. - Date: Mon Sep 28 1998 22:35
Earl (Gollum (Deflation?:) ID#227238:
Copyright © 1998 Earl/Kitco Inc. All rights reserved - Your thesis regarding the hoarding and unproductive use of capital may indeed be correct. At the same time it's hard to ignore the fact that the world's productive capacity has just flat exceeded present demand.
If that lending capacity had been made available for consumption, who would have taken advantage of it? The US consumer is loaded as it is and poorer nations are not structured for credit based consumption. At the same time, it seems that those poorer nations have placed most of their emphasis on production and export rather than an expansion of their own domestic consumption. - Date: Mon Sep 28 1998 22:35
HighRise (BEARX) ID#401460: -
The markets were strong, so, I thought I would buy some BEARX. Instead of going down when the DOW closed up 80, it gained 0.08.
Tomorrow is shaping up as one of the more interesting days of the year.
Another bank lowers their prime rate, and the Fed is going to drop rates 0.5% tomorrow; so why was the DOW up only 80 pts and the other markets were down?
HighRise
- Date: Mon Sep 28 1998 22:35
Lan Man (@Chaostan Countdown moved to #2) ID#320108:
- - As per the Sept. issue of Richard Maybury's U.S. & World EARLY WARNING REPORT, the Chaostan Countdown has been moved to number 2, the lowest ever. This is based upon:
1 ) Alex. Lebed announcing on July 24th that he may take over the nuclear missiles at the Uzhursk missile base in Krasnoyarsk. Reportedly having 520 of the big strategic warheads, about a tenth of Russia's stockpile.
2 ) Kosovo
3 ) Clinton's Aug. 20 attack on Osama bin Laden
Ongoing Forecast: World War
Investment___War Prices__Confidence Level
Oil__________$100_____________9
Gold_________$2000 to $5000____8
Silver_______$50 to $100________8
Platinum_____$2000 to $5000_____9
Numismatics__Up at least 400%____8
CRB__________900_____________9
T-bond int___15+%_____________8
His web site is at http://www.chaostan.com
- Date: Mon Sep 28 1998 22:30
Gollum (Meanwhile back in Brazil (remember Brazil?) )) ID#43349: - http://biz.yahoo.com/rf/980928/gb.html
- Date: Mon Sep 28 1998 22:28
Eldorado (@the scene) ID#173274: - Usury-based CONfidence games; What a concept! HAR! How fast can you run around with your 'staple gun' trying to keep the house-of-cards together? Its' end was written the day it was born! But don't expect any 'niceties' coming out of its demise though, even if 'Humpty Dumpty' acquires some gold colored bandaids, 'cause it'll also have 'nazi jack-boot' written all over its heel! The final demise of sovereign nations and people is the goal and it is all but finalized. It'll come down to what the people themselves REALLY have down deep for ideals, ideas, and balls.
- Date: Mon Sep 28 1998 22:24
Earl (James:) ID#227238: - Your assumption, of course, is that the XAU and its constituent components will not be an attractive hold when this tax loss selling season begins.
Presently Dec gold is up $1.40. When these overnite gains are no longer faded in the morning action, I think we will be in a whole nother ball game. - Date: Mon Sep 28 1998 22:22
sharefin (EJ) ID#284255: - Please could you point me to the post you made the other day.
I was away for a week and missed the post.
Most curious.
tia - Date: Mon Sep 28 1998 22:20
EJ (Gollum) ID#45173: - Japan is ( was? ) their primary trading partner, unable to help them in their time of need. A bad situation got quickly out of hand. Lucky for Brazil and Mexico, their primary trading partner is in perfect economic health. Er, come to think of it, Japan was in perfect economic health before their asset bubble burst. Um, maybe I'll see if I can pick up a wee more silver tomorrow a.m.
-EJ - Date: Mon Sep 28 1998 22:19
HighRise (GOLD) ID#401460:
Copyright © 1998 HighRise/Kitco Inc. All rights reserved -
298.00
299.50
297.90
299.20b
+1.20
9/28/98
19:05 - Date: Mon Sep 28 1998 22:15
Gollum (Deflation?) ID#43349: - I wonder how much of the apparent deflationary trend was due to so much of the liquidity in the banking system having been sucked up by LTCM and others of it's ilk? Tying up $1.25 trillion chasing after bond hedges seem like it ought to have some impact.
- Date: Mon Sep 28 1998 22:14
James (XAU/POG negatively correlated to USD) ID#252150: - If anyone thinks that the JY & DM are a good bet to appreciate against the USD then they should place their bets on PMs/stocks. I think that eventually sanity will prevail & the USD will reverse course. That combined with tax loss selling which starts earlier every year, producer selling & oversupply could cause the XAU to give back at least 50% of recent gains.
- Date: Mon Sep 28 1998 22:14
EJ (Monkey Person -- Speaking of BEARX) ID#45173: - Someone there asked a good question that might get answered here:
In the history of the U.S., when ever the yield curve inverts, it is ALWAYS followed by economic slow down. The inverted curve is more accurate than any chart or economist. It has never failed.
True or false? I cannot find any info to contradict this statement.
-EJ - Date: Mon Sep 28 1998 22:09
Gollum (@EJ) ID#43349: - Yes the Japanese are of more concern. The irony is that this whole thing started in the Korea/Indonesia neck of the woods. Doesn't look lije they've turned the corner yet, does it?
- Date: Mon Sep 28 1998 22:05
ERLE (@ gold deflationists) ID#190411:
Copyright © 1998 ERLE/Kitco Inc. All rights reserved - I have read many opinions here regarding the deflationary hypothesis. They are well reasoned and logical. I have had a problem with them, although. I almost became convinced of the 200 dollar crowd.
I always asked myself, ( an economic illiterate, without a college education ) , What if the boyz get too greedy. What if the other side of the bet doesn't pay?
I know that most governments in this bloody century of socialistic fervor have defaulted. The arguments of the gold deflationists discount this simple historical fact. They are considering the USD as a fulcrum of world economy. This was the case for the largest part of this century, but, I cannot see any way that it will continue. There is too much greed, debt, and claims upon the productivity of the private sector American tax-cow, than that dwindling entity can finance.
The derivative mess will dwarf the capacity of the fiat banking system.
There is no way that we can pay down the debt, as the charlatan politicians like to claim. The debt of a family of five exceeds 100,000 paper dollars. ( 337 ounces of gold, twenty-four pounds avoirdupois ) .
The debt is seventeen thousand million ounces ( on budget ) .
Obviously, the FED is going to pile more monetized debt upon that.
It's All Over Now------Jagger/Richards Jagger was trained at the London School of Economics, supposedly. - Date: Mon Sep 28 1998 22:05
Gollum (Tuesday takes shape) ID#43349: - Globex down. Bonds mixed. Dollar down. Metals up. Oil up.
They better have one helluva rate cut planned, or we got problems right here in River City. - Date: Mon Sep 28 1998 22:05
EJ (Gollum) ID#45173:
Copyright © 1998 EJ/Kitco Inc. All rights reserved - Ah! So economic turmoil has political implications? The Japanese worry me more, the way they suffer quietly, for a very, very long time, and then... SUDDENLY BLOW UP!
TV news had images of Japanese sleeping on park benches tonight with a VO on the great plan announced today to solve the nation's economic problems, ...the worst in 50 years. Implications: they are now on their way to a far deeper and more dangerous stage of political and economic crisis. The Nikkei tells the story.
On Korea labor riots, read P.J. O'Rourke's Vacations in Hell for the best ever reporting on Korean labor/student rioting. These guys really know how to make their displeasure known to the authorities.
-EJ
- Date: Mon Sep 28 1998 22:01
Gollum (@Envy) ID#43349: - Echos of '29
Coming soon to a neighborhood near you - Date: Mon Sep 28 1998 21:58
Gollum (Potential new fire in the hole?) ID#43349: - http://www.tampabayonline.net/news/news1014.htm
- Date: Mon Sep 28 1998 21:54
Envy (@Gollum) ID#219363: - Don't you love when they have to call in the bully boys with riot gear to protect banks.
- Date: Mon Sep 28 1998 21:53
Gollum (Planning on using medicare in Y2K?) ID#43349: - http://www.tampabayonline.net/news/news101i.htm
- Date: Mon Sep 28 1998 21:50
THE GOLDEN PROPHET (NEW PREDICTION!!) ID#372262: - GOLD $10,000 by DOW 1,000 by y2K!! Hehehe! BGEIX UP another 20 cents!! UP 55.25% in September alone!!! Heheheh! Deus, amo aureum!!!
- Date: Mon Sep 28 1998 21:49
Gollum (Meanwhile back in Korea (remember Korea?) ) ID#43349: - http://www.tampabayonline.net/news/news101i.htm
- Date: Mon Sep 28 1998 21:47
Envy (Japan Stocks Slip) ID#219363:
Copyright © 1998 Envy/Kitco Inc. All rights reserved - TOKYO ( AP ) -- The U.S. dollar rose against the yen early Tuesday ahead of the Federal Reserve Board's policy-making meeting later in the day. Japanese stock prices slipped. The dollar bought 136.35 yen in early trading, up 0.63 yen from late Monday in Tokyo and also above its level of 135.85 yen in New York. Traders were awaiting the outcome of the Federal Open Market Committee meeting amid increasing speculation the Fed will announce a cut in interest rates after the gathering in a bid to revive the global economy. In New York, the dollar moved higher in line with a rise on Wall Street before losing some of its early gains. The U.S. currency's intermittent moves higher were also cut short by remarks from Treasury Secretary Robert Rubin. Rubin reiterated his great concern over the recent weakness of the Japanese currency. The Dow Jones industrial average closed up 80.07, or 1 percent, to a one-month high of 8,108.84 points. On the Tokyo Stock Exchange, many investors were holding back to await the outcome of the Fed meeting.
http://www.newsday.com/ap/rnmpfn1q.htm - Date: Mon Sep 28 1998 21:37
Monkee Person (the parenthetical was... ) ID#350199: - They're asleep at the wheel alright.
You're welcome, EJ. See ya' at BEARX.
Petronius, I liked that one too. As well as the one that stated they ( the banks ) don't know what to do.
- Date: Mon Sep 28 1998 21:32
Monkee Person (They're ) ID#350199: - Some of the big manipulators of these funds have gotten to a couple of members of the Congress and this language has been put in here and I think that most everybody else around here is not paying enough attention, Hinchey said.
http://biz.yahoo.com/rf/980928/bi6.html
- Date: Mon Sep 28 1998 21:31
Boardreader (Donald: Your 18:37 ............) ID#20770:
Copyright © 1998 Boardreader/Kitco Inc. All rights reserved - It is almost a coin toss .... almost.
Battles are won and battles are lost. George Washington lost nearly every battle except the most important one, the last.
Are we in the last battle here? I believe so, and have put 100% of my investment capital ( 65% of barely adequate wealth ) into precious metal mining shares.
A bear market is the most grueling and demoralizing thing that an investor endures. However, when the time is at hand, we must not forget that decisive action requires critical mass for maximum effect. This kind of movement is drawn from one place .... BALLS OF GOLD!
Bob in DC - Date: Mon Sep 28 1998 21:28
EJ (Monkee Person) ID#45173: - Nice find on the SCMP article.
-EJ - Date: Mon Sep 28 1998 21:24
demon (Nikkei 225 - new low if it breaks 13,521) ID#272219: - Nikkei just fell to 13,556 ( -2.53% ) . Tonkatsu time soon.
- Date: Mon Sep 28 1998 21:19
Highhopes (Gillette story) ID#404410: - Assuming that the Gillette story hit after the market close, this could be really BAD news for the market. This is considered to be a very good holding in recession type times, yet Gillette is having to take drastic measures to restructure ( of course, they all like to use this term rather than run for cover ) . Doesn't sound healthy to me.
Highhopes - Date: Mon Sep 28 1998 21:19
Petronius (Monkee Person - HEDGE FUNDS) ID#225236: - I like this quote better:
He estimated that the notional value of the US banking system's exposure to leveraged derivatives at US$26 trillion.
Gee, let us see! They mean to tell us that the banks might be very well on the way to piss away more than the combined worth of all publicly traded US companies? Does anybody have ANY doubt that should something like that unwind ( even partially ) , the US dollar would be worth less than a piece of toilet paper of similar size? - Date: Mon Sep 28 1998 21:18
Lurker 777 (I take much GLEEEEEEEEEEEEEEEE in reporting the following:) ID#317247: - Dec. Gold UP $1.10 to $299.10
Japan Nikkei 13652.06 -257.31 -1.85% - Date: Mon Sep 28 1998 21:04
small investor (XAU TARGETS? LOOK AT THE CHARTS OF NEM BACK IN 1985-1987.) ID#105143: - This was not even a Bull Market. The potential is much larger then that move. In the beginning of a Bull Market, everybody trades because they do not believe it is for real. At the end of a Bull Market, nobody trades because they project the past into the future. XAU TARGET ( 1.618 X ? ) plus five waves equals ( alot higher than you think! ) History is a luxury! Keep on trading!
I - Date: Mon Sep 28 1998 20:52
Monkee Person (@SCMP -- Hedge funds face failure as borrowing costs surge. ) ID#350199: - I especially like this line: I think LTCM is just one of many that got their faces ripped off in August.
- Date: Mon Sep 28 1998 20:51
BillD (Gold Futures up 1.50 to 299.50) ID#261295: -
as per DBC ... and on the back of a strong dollar as well....up about a buck in the last 30 minutes...go gold.. - Date: Mon Sep 28 1998 20:49
Envy (Envy's Golden Rules) ID#219363:
Copyright © 1998 Envy/Kitco Inc. All rights reserved - Don't count your rate cuts before they hatch.
Weaker dollars means stronger stuff.
Foreign money travels in a big herd, and it scares easy.
When everyone says the bottom is in, things will get much worse.
Inflating your way out of deflation is funny, especially in a year.
Whatever foreigners buy, they eventually sell.
You know things are getting bad when politicians start asking questions.
Running with the herd is safe and fun, until it gets chased off a cliff.
But low, sell high.
If APH says it's going to happen, well, I wouldn't bet against it.
and finally ...
If the market is priced at assets to the power of good interest rates to the power of low inflation to the power of low un-employment to the power of strong earnings to the power of lots of foreign money to the power of bullish sentiment, and one of those things changes, things are getting ready to take a turn for suck-ville. - Date: Mon Sep 28 1998 20:47
sharefin (Swing chart updated - time for a swing?) ID#284255:
- - http://www.cairns.net.au/~sharefin/Markets/Swing.jpg
Note how we are just coming into a crossover.
The red line should cross the blue line in the next day or so.
Also the tick @ 720 minutes
http://www.cairns.net.au/~sharefin/Markets/Tick2.jpg
Note also how the oscillation of the tick is at the top of the cycle.
Soon it should trend downwards.
These two indicators are pointing to a selling phase coming up.
The PPT will be sharpening their pencils for this sell phase.
How low will it go this time?
- Date: Mon Sep 28 1998 20:34
JTF (LTCM and dollar/gold carry trade) ID#254321:
Copyright © 1998 JTF/Kitco Inc. All rights reserved - Donald: There is a good argument that the dollar/gold carry trade is unraveling with dropping dollar interest rates and a spike in the gold lease rate. Furthermore, a Canadiand news source disclosed that LTCM was heavily short gold. We also know that LTCM was betting that interest rates would go up - not down. And -- for some reason AG became very concerned about LTCM. Now one thing that would really concern him was if LTCM was heavy into gold shorts, and got caught.
Do you have any idea what sort of gold trading LTCM was up to, if any?
By the way, didn't UBS get burned on some gold shorts a few months ago -- I think it lead to UBS merging with Bank of Switzerland ( not sure of name ) .
With WJC's problems really heating up, and Russian instability, I think bullish pressure on gold is reaching the boiling point. Hope it does not go up too fast, though.
- Date: Mon Sep 28 1998 20:22
Donald (@SDRer, BillD) ID#26793: - How convenient; there is a new BIS office just next door in HK
- Date: Mon Sep 28 1998 20:19
CoolJing (Donald) ID#343171:
Copyright © 1998 CoolJing/Kitco Inc. All rights reserved - from the Privateer site:
the long term 40-week MA has turned UP for the first time since August 1996 but within this we have seen the XAU/spot ratio get ahead of itself, maybe that is just a natural non-correcting divergence that you'd get in a bull market in the calf stage. I know I don't know.
Getchell and Newmont seem to be skewing the index, takeover targets ( ? ) .
How about Xau drops to 65, and gets over 100 next leg up.
I am in the gold exploration business and am constantly surrounded by the doom and gloomers and have since late August tried to project my confidence in a strong bull gold market, almost doing it with 'righteous indignation' because of what I take to be a ridiculously low gold price.
Anyway I am almost sure that I am the only buyer of physical gold in an office of 20 people, most are like deer in the headlights waiting to be laid-off. - Date: Mon Sep 28 1998 20:18
EJ (Donald's 19:41 post) ID#45173:
Copyright © 1998 EJ/Kitco Inc. All rights reserved - The most important news I have seen in years:
Former Fed governor Lawrence Lindsey warned in an opinion piece in the Wall Street Journal on Monday ``the global effect of feeding the American equity bubble is even more problematic.''
``Global investors now have every incentive to allocate even more money to 'fully valued' American equities. That means less capital in high-risk areas like Asia and Latin America, making their recovery even more distant,'' Lindsey also remarked.
Meanwhile, back at the T-Bill ranch:
Traders said one risk the Fed may be facing is that the Treasury market will take the lead in monetary policy by pricing in more easing than the Fed intends to implement.
In February 1994, FOMC members were stunned at the abrupt Treasuries sell-off sparked by an initial 25-point hike -- the first in five years.
The long-bond yield went from a then-record low of 5.75 percent to a high around 8.0 percent in just one year and did not stabilize until the Fed resorted to a bold 75-point hike in November 1994.
``What is very difficult for anyone to guess is whether the Fed easing will calm markets or fuel a fresh Treasury market rally that could further distort spreads,'' one trader at a European brokerage firm said.
``That's why the market will be particularly careful about the wording of the Fed's announcement to get a sense of future policy,'' the trader added.
The FOMC'S decision is expected to be released on Tuesday around 1415 EDT/1815 GMT.
Did I forget to mention that the last rate change was NOT just before the end of September, heading into the gnarley October earnings season?
Fasten yer seatbelts, folks.
-EJ - Date: Mon Sep 28 1998 20:13
Envy (@Donald) ID#219363: - Don't try this at home, indeed. I lost 685 billion once, oh wait, it was 20 dollars, nevermind.
- Date: Mon Sep 28 1998 20:11
Mike Sheller (cherokee) ID#347447: - the shiny one looks like it wants 310.
- Date: Mon Sep 28 1998 20:09
Donald (Details of the LTCM-UBS deal that cost UBS $685 million. Kids; don't try this at home!) ID#26793: - http://biz.yahoo.com/bw/980928/derivative_1.html
- Date: Mon Sep 28 1998 20:08
Bully Beef (The unwinding of Long Term's various positions will obviously effect all kinds of d) ID#260119: - peculiar market happenings. Try selling 90 billion worth of stuff and have it not make an impact. Got Microsoft?
- Date: Mon Sep 28 1998 20:08
BIGIrishman (HopeFull RE: RANGY) ID#261252: - I too feel something is not out on RANGY after watching
the way the stock has been performing.I was almost ready
to add to my position when I decided to totally unload
my shares and put the money elsewhere.Although I feel the
POG is likely to skyrocket and probably RANGY along with
it,I feel uncomfortable with RANGY,call it 6th sense.
- Date: Mon Sep 28 1998 20:06
Mike Sheller (Gollum) ID#347447: - AG is a gradualist. He will do it a little at a time. Even a quarter point at these levels is a reasonably significant percentage of the whole interest rate. Also, it will be expected that a small reduction indicates a new direction - that there will be more to come as needed.
- Date: Mon Sep 28 1998 20:06
SDRer (Well lookee here! ) ID#290172:
Copyright © 1998 SDRer/Kitco Inc. All rights reserved - Global Intelligence Update
According to Japan's Kyodo News Service, Japan will propose at
the upcoming G-7 meeting that an Asian Monetary Fund be
organized. According to Kyodo, which is usually well informed,
Japanese diplomats are now in the process of coordinating with
other Asian countries to present a coherent framework. This idea
was proposed previously by Japan and other Asian countries, but
was rejected by the United States.
Earl@Studio.R.Glossary That is a glossary well worth the wait!
Add my name to the list please. {:- ) )
TYoung@Using.the.operative.Word Fraud...When one knows an exit
strategy isn't available, fraud seems to cover it doesn't it? - Date: Mon Sep 28 1998 20:05
cherokee () ID#288232: -
the shiny one....
http://www.digisys.net/futures/chart/ts_cha22.gif
massive shorts riding? better think again..
the bigger picture next.... - Date: Mon Sep 28 1998 20:04
BillD (I hate long posts ... try not to read them .. but ..) ID#246432:
- -
This seems really important ... could not of even been envisioned 6 month ago ... another example of NASB....
Global Intelligence Update
Red Alert
September 29, 1998
Obuchi Refloats Idea of Asian Monetary Fund
President Clinton clearly resisted the temptation to play the savior last week, sending Japanese Prime Minister Obuchi home empty handed. Whether Clinton was showing extraordinary good sense, was relieved at public reaction to his Grand Jury testimony, or was hemmed in by Federal Reserve Chairman Alan Greenspan's refusal to countenance a coordinated interest rate cut is immaterial. Clinton resisted. Interestingly, Greenspan then went on to announce the likelihood of interest rate cuts, which buoyed world markets without decreasing pressure on Japanese banks.
The consequences of Obuchi's failure to extract American help started to appear Sunday night, as Japan Leasing Corporation went bankrupt -- over $16 billion in debt and with no hope of recovery. The hopelessness of its situation was made clear in Japan's Diet, which finally hammered out an agreement that appeared to have some possibility of lasting longer than a day. The agreement saw the Japanese ruling LDP abandon its position that government funds should be used to save ailing financial institutions. In a compromise with its opponents, the LDP agreed that funding would be provided to buyers of ailing banks, but not to the banks themselves. In other words, depositors would be saved, along with some investors, but the management of the banks would be punished. With all hope lost, Japan Leasing, a subsidiary of the ailing Long Term Credit Bank of Japan, went under. Japanese markets actually rose on the news, relieved that the blood-letting was about to begin.
In the midst of this excruciating process, the Japanese leadership is desperately searching for a policy to call its own. Recognizing finally that Japan's problem and Asia's are one and the same, Japan is refloating a potentially historical idea. According to Japan's Kyodo News Service, Japan will propose at the upcoming G-7 meeting that an Asian Monetary Fund be organized. According to Kyodo, which is usually well informed, Japanese diplomats are now in the process of coordinating with other Asian countries to present a coherent framework. This idea was proposed previously by Japan and other Asian countries, but was rejected by the United States. Obuchi seems to have decided that if Clinton was not prepared to help Japan, then Japan was under no obligation to remain within the American conceptual framework.
The basic idea of an Asian Monetary Fund is the same one that underlies the International Monetary Fund. Asian countries would pool their remaining foreign reserves and use that war chest to defend the currencies of weaker countries when faced by sudden and unexpected outflows of capital. This is the role that the IMF is supposed to play. However, IMF funding usually comes with strict requirements, including budget cuts, closing failing financial institutions, writing off bad loans, and opening markets to foreign competition. In this sense, the IMF is increasingly seen by Asia as an American tool, used to pry open closed markets and destabilize potential competitors.
Since the Japanese are not getting much direct help from the U.S., and since the IMF has become increasingly suspect throughout the region, an Asian Monetary Fund has become an increasingly important idea. It would be expected that it would provide funds without the onerous requirements of the IMF. This would mean that the existing social and economic structures would not be destabilized. In other words, an Asian Monetary Fund would do what the IMF does without the toll that IMF help exacts.
Of course, there is more than a bit of fantasy involved here. All of Asia is in financial meltdown and monetary reserves have drained out of the region. The idea that Asia can collectively protect their currency, where not one of them has been able to do so, is arithmetically dubious. First, it assumes that there is a reserve to draw on. Second, it assumes that financial imbalances will courteously queue up, allowing a limited asset to be sequentially allocated. Finally, it assumes that stronger nations will willingly pool sufficient cash to protect weaker nations, in spite of the fact that this will increase their own vulnerability.
In spite of these obvious weaknesses, the idea has a growing body of supporters in Asia. It is a logical expression of the growing Asianist bloc in the region. It also is said to have some American supporters, like Paul Volcker, former Federal Reserve Chairman, whom former Prime Minister Miyazawa claims is in favor of it. It is certainly not something entirely against U.S. interests, since it forces Asia to clean up its own mess and excuses the U.S. from any action. In the long run, however, an Asian Monetary Fund has profound implications.
Given its obvious weaknesses, such a fund could not function in the short-term without some degree of regional currency control. For the reasons given, the AMF could not, by itself, stanch the outflow of money from a major country, like Korea. However, its infrastructure could serve as an instrument for the administration of regional currency controls. If that were done, short-term fluctuations could be avoided, while the reserve fund could be organized as an Asian version of the Eurodollar to facilitate regional trade.
It is extraordinary how far we have gone. Japan, which has eschewed regional political leadership and which has benefitted most from Breton Woods, is now essentially moving to create a yen bloc. We suspect that this is not what Obuchi really wants. By leaking that he is planning to offer the proposal at the G-7 meeting, he is trying to warn the United States of the consequences of its unwillingness to help Japan. As a bluff it is unlikely to work. A massive U.S. bailout of Asia is not going to happen in the current American political climate.
Therefore we are in a classic situation where a desperate bluff may well turn out to be policy. Since Japan and the rest of Asia cannot genuinely restructure their economies without being willing to endure social upheaval, they are going to trade long- term recovery for short-term stability. This has been their policy all along. It is a policy that has so enervated their economies that the only way to maintain their dilatory policies is with a modest step with radical implications. If Asia creates an Asian Monetary Fund, it will not stop until it creates an Asian currency bloc under Japanese leadership. When that happens, and we believe it will, the very texture of the international system will have changed irretrievably. We are entering a world of regions, replacing the much-vaunted global economy. - Date: Mon Sep 28 1998 20:00
Donald (Ashanti Gold news) ID#26793: - http://biz.yahoo.com/rf/980928/13.html
- Date: Mon Sep 28 1998 20:00
Envy (Facts on Japan's Financial Crisis) ID#219363:
Copyright © 1998 Envy/Kitco Inc. All rights reserved - --HOW IT STARTED: Banks financed speculative real estate projects in the late 1980s that have fallen in value by as much as 80 percent. Economists worry that moving to clean up bad loans could drive the real estate market even lower by flooding it with bargain properties.
--CREDIT CRUNCH: Japan's banks have cut back on new lending. Big companies can raise money by issuing stock or selling bonds, but small- and medium-sized firms rely almost exclusively on bank loans to finance their operations. Smaller firms have been failing in record numbers.
--COST: Cleaning up mess could cost taxpayers $382 billion versus the U.S. savings and loan fiasco losses of the 1980s that totaled $480.9 billion. In Japan, there is debate over whether taxpayer money should be used for the financial crisis cleanup.
http://www.newsday.com/ap/rnmpfn1c.htm
--
What a strange AP wire. - Date: Mon Sep 28 1998 19:57
Gollum (One shot, or a volley?) ID#43349: - If the Fed eases rates, the question is would it be construed as a one time thing or just the first of a series of easings.
If it considered just this one for at least several months, then bond holders will take their windfall and run. Which would of course tend to counteract the cut.
If it is considered a case of just one toe in the water to begin with, but more to follow shortly, it will bring even more money rushing into bonds and the market. Which would tend to overaccentuate the cut. - Date: Mon Sep 28 1998 19:56
Envy (Rubin Discusses Fund Fallout) ID#219363:
Copyright © 1998 Envy/Kitco Inc. All rights reserved - WASHINGTON ( AP ) -- Treasury Secretary Robert Rubin tried to reassure markets Monday that the near-collapse last week of a huge investment fund wasn't likely to lead to a broader credit crunch. I don't see why that should happen, Rubin said in response to a reporter's question about the $3.5 billion private bailout of the hedge fund, Long-Term Capital Management LP. I think that the issues are indicative of the kinds of problems that the world and international community and ... financial authorities are dealing with as the world works itself through a very difficult time, Rubin said. While hedge funds are largely unregulated, the Federal Reserve and the Treasury Department do have responsibility for the nation's banking system, which could be severely affected by a major hedge-fund collapse.
http://www.newsday.com/ap/rnmpfn1e.htm - Date: Mon Sep 28 1998 19:53
Donald (Traders targeting areas where LTCM may have had vulnerability) ID#26793: - http://biz.yahoo.com/rf/980928/bfq.html
- Date: Mon Sep 28 1998 19:50
BillD (Apologize if this has already been posted...) ID#246432:
Copyright © 1998 BillD/Kitco Inc. All rights reserved -
For those who follow this tread...
TAKEN FROM THE USA GOLD SITE...
Friend of Another ( 9/28/98; 13:53:09MDT - Msg ID:224 )
Goldfly ( 9/27/98; 19:47:36MDT - Msg ID:219 )
Goldfly, --------- I don't mind being nailed down on price predictions. It's just that in the past I haven't had a time parameter. Read my post of ( 9/24/98; 09:38:18MST - Msg ID:140 ) , them add to that what Another said in his ( ID:203 ) post that he would add flavor to this market. Now I feel we can say that gold is going to start moving, now! After today's action, I can see someone is adding that flavor! My direction on gold? We will be through $300 tomorrow and be in the $320 range in a week or so! It won't stop there now that the BIS has blocked the funds from covering by buying any new large supply. I don't want to see it, but I think we will break that $360 level before the end of the year. Before the Euro comes out. Also, all the movement in the price of oil this year has been little more than posturing before the long process begins to remove oil from the dollar standard. We shall see? FOA
*** End of page :- )
COMMENT: Sure would be nice, huh...eh... - Date: Mon Sep 28 1998 19:49
Envy (Goldman Sachs Cancels Stock Sale) ID#219363:
Copyright © 1998 Envy/Kitco Inc. All rights reserved - NEW YORK ( AP ) -- Goldman Sachs & Co. abruptly canceled plans to dissolve its 130-year-old private partnership and sell a stake to the public, citing the turmoil in global financial markets that has reduced the company's potential value. The decision announced Monday night by Wall Street's last remaining big private firm indicates what some of the most prominent investment bankers think about the prospects for a quick recovery of the hemorrhaging stock market. Our executive committee made this difficult decision after giving full consideration to the volatile state of global financial markets and the disproportionately negative impact on the financial services sector, Jon S. Corzine and Henry M. Paulson, the firm's co-chairmen said in a statement. Goldman's six-member executive committee acted after consulting with the firm's 189 general partners. The firm had been widely expected to delay its initial stock sale from late October or early November. Instead, it withdrew the plan.
http://www.newsday.com/ap/rnmpfn1k.htm
--
Apologies if this has already been posted, I didn't see it. - Date: Mon Sep 28 1998 19:47
Donald (@T's, Young & Rex) ID#26793: - Thank you
- Date: Mon Sep 28 1998 19:41
Donald (The Fed is being drawn into a global role that exceeds its legal mandate) ID#26793: - http://biz.yahoo.com/rf/980928/1x.html
- Date: Mon Sep 28 1998 19:38
Bully Beef (Explanation on gold shorting by hedge funds.In particular the Long Term OOPS ) ID#260119: - Fund.Saw it on SI reply 19999.Did they or didn't they? Only there hairdresser knows for sure.
- Date: Mon Sep 28 1998 19:34
Donald (Dollars still flee Brazil; today was worst outflow of past two weeks) ID#26793: - http://biz.yahoo.com/rf/980928/5v.html
- Date: Mon Sep 28 1998 19:32
Dabchick (Silverbaron) ID#258195: - My ( newspaper ) FT will arrive in eight hours time. I will post actual lease rates here just after 04:00am Kitco time. And so to bed....
Regards.....Dabchick
- Date: Mon Sep 28 1998 19:31
Pedro (Donald re XAU) ID#224151: - My guess is one or two more up days than pull back to 200 day moving average for week long breather or so.The worm has turned.Early stages of new Gold Bull!
- Date: Mon Sep 28 1998 19:28
Silverbaron (Dabchick) ID#288295: -
Yep - I got it. Thanks very much - I will be watching the spread as an approximation. For the time being it still looks positive, although down from Friday, which is not what I would have guessed judging from today's action. - Date: Mon Sep 28 1998 19:28
BillD (@Golddancer 19:03...Damn I wish I had said that) ID#246432: -
Your 19:03 sums it up perfectly, IMNSHO...I agree with your general asumption NASB..AND I agree specifically with your DROOY.
wish I had said all that.....heh heh - Date: Mon Sep 28 1998 19:26
JTF (Elizabeth Ward Gracen say she was terrorized by Clintonistas to remain silent) ID#254321: - All: It is finally coming out -- the shady, seamy side of WJC and his followers. The Monicagate eposide has taken its toll, and those who feared for their safety now feel free to make their cases known.
We are seeing a major turning point in American History, and it is not pleasant to face. I could have voted for this man in 1992, had I not known a bit about him then. He is a grand master of lies.
- Date: Mon Sep 28 1998 19:18
Aragorn III (Symphony No. 9 op. 125 D minor; Presto - Allegro assai) ID#212323: - I've said it before--Only gold is 'good as gold'. But this is perhaps the next best thing. This...Beethoven. Fear not for the EU. Evidence that they know what they are doing is filling my senses even as I type this.
Away...to flail about with a purpose.
got gold?
- Date: Mon Sep 28 1998 19:17
Dabchick (Silverbaron @Lease Rates) ID#258195: - I replied to you at 18:53......did you see it?
Regards..........Dabchick - Date: Mon Sep 28 1998 19:16
Earl (JTF:) ID#227238: - Earlier you made reference to the 2 year down channel in gold. By my reckoning we are about break it. A solid close above 300 for a few days will do it. ...... That's judged by the monthly chart.
- Date: Mon Sep 28 1998 19:14
Oak (Tyoung) ID#240241: - BMG rose on a 200,000 block Friday & a 100,000 block today.
Wonder who those institutional fools were? This fool is enjoying the
ride since I got in at 5 1/6. Better odds then going to the Casino's.
- Date: Mon Sep 28 1998 19:13
Silverbaron (What happened with that FT article?) ID#288295: -
I didn't mean to throw the system into the 'deep blue' sea.... - Date: Mon Sep 28 1998 19:10
Earl (SDRer:) ID#227238: - Words are, gasp, inadequate to express my gratitude for the explanation of VAR and its impact on my potential liquidity. You may be sure that this evening will be devoted to implementing same for immediate use. ..... Just as soon as I get that email from Studio R explaning just what all them words mean. ..... {:- ) )
- Date: Mon Sep 28 1998 19:08
JTF (Looks bad for Yeltsin) ID#254321: - 6pak: Siberia next? Wonder what the new leader of Germany thinks of Russia, or of the EURO and gold, for that matter.
EDWARD LUCE: Liquidity crunch threatens (From FT)) ID#288295:
-
MONDAY SEPTEMBER 28 1998 Equities
EDWARD LUCE: Liquidity crunch threatens
By Edward Luce
The bail-out last week of Long-Term Capital, the
Greenwich-based hedge fund, could not have
happened at a more fitting moment. Coming just a
few days before finance ministers and central bank
governors arrive in Washington for the annual
meeting of the International Monetary Fund and the
World Bank, the crisis should concentrate minds
wonderfully.
The downfall of Long-Term Capital surprised even
some of the hedge fund's own investors. As the
much admired Rolls-Royce of the leveraged
finance sector, the effective bankruptcy of LTCM
has underlined the increasingly global reach of
the collapse of many emerging market economies
over the past year. Although LTCM, like many banks
and other hedge funds, was heavily invested in the
Russian market, most of its exposure was in the
US, Europe and Japan, in markets about as far
removed from Indonesian bonds or Brazilian stocks
as you can get. Yet its balance sheet was wiped
out.
The so-called flight to quality, in other words
- with investors pouring their money into the
safest western government bond markets, such as US
Treasuries and German government bonds - is no
longer a geographic phenomenon. The battered
economies of Asia and ( increasingly ) Latin
America, have probably lost most of the portfolio
flows they are going to lose. Spreads on emerging
market bonds have hit near record levels while
Asian and Latin American stock markets are at
their lowest levels for years. Investors are
therefore conducting fire-sales of their exposures
to many non-emerging market instruments, such as
US corporate bonds, shares in western banking
stocks and over-the-counter derivatives contracts.
The effect, as LTCM's demise amply highlighted, is
the extension of the emerging market liquidity
crunch into mainstream US and European markets.
Hedge funds with losses in one market are
liquidating assets in others to meet growing
margin calls.
Investment banks ( a few of which are little more
than glorified hedge funds themselves ) are
unscrambling many proprietary exposures to other
banks, sub-investment grade markets and, of
course, to various hedge funds. Consequently swap
spreads - the difference between the yield on
floating rate money and government bonds - have
widened to near record levels. The 10-year swap
spread in US dollars is approaching 90 basis
points - a reflection of investors' desire to
minimise their exposure to the banking sector. The
net result is the growing threat of a global
liquidity crunch.
Giles Keating, chief economist of Credit Suisse
First Boston, the investment bank, says that
global liquidity growth has slowed significantly
during 1998. Although notoriously difficult to
measure, CSFB calculates global liquidity by
adding emerging market foreign exchange reserves
to the growth rate in base money in the
industrialised economies. The first has shrunk,
the second has slowed markedly. The phenomenon is
still confined to the wholesale markets with
western retail spending showing little sign of
coming to a halt. If the crisis persists, however,
it is only a matter of time before banks start
calling in loans to riskier borrowers and refusing
to extend fresh credit lines to new ones. The
western consumer would not be immune to such a
process.
What, then, is to stop the current liquidity
squeeze becoming a full-blown credit crunch? The
short answer is that all eyes are on the finance
ministers and central bank governors of the Group
of Seven leading industrialised economies. The
futures markets have already priced in about a
half-a-point reduction in US and UK interest rates
before the end of the year.
Such is the severity of the liquidity squeeze and
such is the fear pervading the markets, that any
reduction in US interest rates would probably, in
itself, not be enough to stop the global flight
to quality. As important is a signal that
Congress is prepared to grant the IMF the $14.6bn
that the US has pledged in additional reserves.
Without this, the G7 could not guarantee the
prevention of another Russian-style debt default.
© Copyright the Financial Times Limited1998
FT and Financial Times are trademarks of The
Financial Times Limited.
- Date: Mon Sep 28 1998 19:06
6pak () ID#335190:
Copyright © 1998 6pak/Kitco Inc. All rights reserved - September 28, 1998
OECD report points to social impact of e-comm
OTTAWA ( CP ) -- Electronic commerce is expected to be a positive force in the global economy, but a new report from the Organization for Economic Development and Co-operation also suggests a number of pitfalls in the much-hyped digital marketplace.
For example, people in the developed world may see their leisure time reduced because new technologies will keep them constantly wired to work.
Visions of a global knowledge-based economy and universal electronic commerce characterized by the death of distance must be tempered by the reality that half of the world's population has never made a telephone call ..., the report said.
The digital markeplace is fast becoming a top priority for countries like Canada, Germany and the United States, where the forecast for growth has risen to $1 trillion US by 2003-2005.
http://www.freecartoons.com/BizTicker/CANOE-wire.Electronic-Commerce.html - Date: Mon Sep 28 1998 19:03
Gold Dancer (cross currrents...) ID#377196:
Copyright © 1998 Gold Dancer/Kitco Inc. All rights reserved - Different posters doing different things with gold. Some covering shorts some geting out. Sounds like a market to me.
But I will say this again, when it comes to gold it doesn't knock
too many times. If you got out of your positions in Asia you were
locked out so fast it made your head spin. Russia was even worse.
I am not selling until the govt. tries to sell me some of theres
telling me it's the best deal in the world.
We are a long way from the top and I don't plan on missing the
best bull market to ever come a long in my life time. This baby is
going to turn on its turbo charger sometime and I am not going to miss
the event. It will be better than the Challenger taking off.
This market is a no brainer. With so many people yet to join in, my
head swims at the delight of such a happening. Can you imagin what will
haappen to the gold stocks when even 5% of the money in the stock
market mutual funds gets converted to gold? How can some of you try and
trade for a few cents or a few 8ths? Boggles the mind.
I expect DROOY etc. to rocket towards past highs. DROOY 's is 16.
Could happen in 8 weeks time. Same with HGMCY and RANGY.
One more point. The stock market didn't require thinking. Charts or
past behavior didn't mean a thing. Technical analysis didn't count
either. So I do not think it will mean anything as people see the
world melting down and now they are going with it. When it comes to
fear or loss of wealth price is no object. I repeat price is no object
when your shaking and pissing in your pants!!! Good luck to all and remember for
every action there is an equal reaction. DROOY at least 50 in two years.
Probably much higher as they prove up that new 50 million oz. deposit.
Let's see, at $400 gold that would give them 90 million oz. in reserves.
How much will DROOY sell for then with 50 million shares outstanding?
Wells Fargo hit $320 a little while back. The mind boggles.
Something to think about as you are trying to scalp day trades.
Thanks, GD - Date: Mon Sep 28 1998 19:02
JTF (Volatility and Implied volatility, as well as log-normal distribution.) ID#254321:
Copyright © 1998 JTF/Kitco Inc. All rights reserved - Delphi: Sorry -- should have read your post more carefully. You gave the numbers used to estimate the 'stationarity' of the stochastic process that makes up the Black-Scholes model. Can't estimate the average path length and direction of that random motion if the rules keep changing during the measurement. The model probably works better in real life than the assumptions would imply. That is often the case.
Hard to believe that such a simple concept -- fairly straightforward to come up with theoretically -- should have such a beneficial, addictive and ultimately devastating effect on the markets.
It will be interesting to see if next time around there are strict, detailed international regulations on derivatives trading. Even then, the mistakes made by LTCM seem to be those of judgment, not of market unreliability. Regardless, after the dust settles there will be a world-wide clamoring for derivatives trade disclosures. Too late in this cycle, unfortunately.
- Date: Mon Sep 28 1998 19:02
Tantalus Rex (@DONALD - XAU) ID#295111: - Donald,
I've been told that the Gold stocks will rise in price just before a huge run up in the POG. ( Insider buying, cause the gains in stocks over the POG ris is about 3-4 to 1 )
If this is what we see in the XAU... then expect the POG to jump way up!
I hope this is the start of the Gold Bull, a gut feel tells me so. - Date: Mon Sep 28 1998 19:02
SDRer (TYoung--You're right! The price is too high.) ID#286249:
Copyright © 1998 SDRer/Kitco Inc. All rights reserved - Well, we know why the 'stuff' is frozen in the system. They might try
to agree on something like the 96 London Bank Accords...just net out on a fantasy basis ( they do a lot of fantasy work methinks )
re: Rehypothecation--if it matters, it is almost necessary to rank by country…
Probabilities-Least affected China, Japan and to a greater or lessor degree Singapore, Taiwan…HK a cipher here
Most affected-US…the banks, big houses? Who has been pushing the most? They all have been in a thinning margins profits squeeze, so -just a guess-rank the management by creativity and daring and there you'll find the biggest black holes? It is actually quite unbelievable. Wouldn't you
love to have first crack at a doctoral on this ten or so years down the road!
- Date: Mon Sep 28 1998 18:54
6pak () ID#335190:
Copyright © 1998 6pak/Kitco Inc. All rights reserved - NEWSPAPER WANTS YELTSIN EXAMINED
Nezavisimaya gazeta on 25 September ran an article by an
expert psychiatrist and chairman of the board of the political
Human Rights Party suggesting that President Boris Yeltsin may be
displaying some first signs of a particular kind of Alzheimer's
disease. The author proposed that the Constitutional Court call for
a comprehensive psychiatric examination to determine the Yeltsin's
fitness for office. He also claimed that the president's pauses
during conversations are psychopathological in nature and occur
because he cannot immediately follow a shift in conversation.
Nezavisimaya gazeta receives financial backing from Boris
Berezovskii's LogoVAZ group. JAC
NEXT IMF TRANCHE FACES LONG DELAY
Despite entreaties from then deputy prime minister Shokhin to
conclude an agreement, IMF officials on 25 September offered
only to return again to continue talks on 12 October ( see RFE/RL
Newsline, 25 September 1998 ) . The fund also issued a statement
that the economic situation in Russia is critical and must be
resolutely addressed and that the fund will consider the timing and
size of new disbursement only when a program has been agreed
upon. According to Interfax, Alexei Mozhin, IMF executive
director for Russia said that fund and Russian officials will reach an
agreement on budget and monetary targets toward the end of
October. Shokhin was more pessimistic, telling Interfax after he
resigned that it will be very difficult for Russia to obtain its next
disbursement from the fund before the end of 1998 or maybe even
during next year. JAC
..........ARMY BATTLES ITSELF
..........SHOKHIN, VASILIEV RESIGN. No sooner than some cabinet spots were filled on 25 September than new vacancies emerged.
..........SHOKHIN'S DEPARTURE MAY MEAN FEDOROV STAYS
..........CADRE SHAKE-UP AT FOREIGN MINISTRY?
..........ZHIRINOVSKY TO RUN FOR PRESIDENT
http://www.rferl.org/newsline/1-rus.html - Date: Mon Sep 28 1998 18:53
Dabchick (Silverbaron @18:13 re Gold Lease Rates) ID#258195:
Copyright © 1998 Dabchick/Kitco Inc. All rights reserved - I'm afraid the Electronic FT does not give the data we want for working out the Lease Rates.
However, you can always get a rough estimate of today's Gold Lease Rates in the following way:
Step 1. Look at the COMEX closing prices for the nearby, ( Oct98 ) , the 3-month ( Dec98 ) , and the 6-month ( between Feb99 and Apr99 ) contracts.
The closing prices for each one are Oct98 = $295.3 Dec98 = $298 Mar98 = $300.2 approx.
Step 2. To get, for example, the 3-month Gold lending Rate [do not confuse with LEASE rate], subtract spot gold $295 ( say ) from the 3-month ( Dec98 ) price of $298 which give $3.
Step 3. Multiply this by 4 to annualise it = $12
Step 4. Multiply this by 100 and divide by $295 ( spot ) to get a figure of 4.07% . This is the 3-month gold LENDING rate.
Step 5. Subtract this from 3-month LIBOR ( Say currently 5.27% )
Step 6. The resultant is an approximation for the 3-month Gold LEASE rate which works out at 1.2% for today's close in London. Monday 28th Sept 1998.
Regards................Dabchick
- Date: Mon Sep 28 1998 18:53
Tantalus Rex (XAU TODAY) ID#295111:
Copyright © 1998 Tantalus Rex/Kitco Inc. All rights reserved - Gold shorters must be getting real nervous now!!!!! I just love it.
XAU END OF DAY SUMMARY
1998-09-28
ABX-Barrick Gold------CLOSED AT $21.3750 0.8750 XAU CONTRIBUTION ( Est. ) 1.07
ASL-Ashanti Gold-------CLOSED AT $08.8750 0.7500 XAU CONTRIBUTION ( Est. ) 0.26
BMG-Battle Mountain---CLOSED AT $06.3750 0.5625 XAU CONTRIBUTION ( Est. ) 0.42
CDE-Coeur D'Alene----CLOSED AT $07.2500 1.0000 XAU CONTRIBUTION ( Est. ) 0.07
FCX-Freeport Mc------CLOSED AT $13.0000 0.0000 XAU CONTRIBUTION ( Est. ) 0.00
GGO-Getchell Gold-----CLOSED AT $19.4375 2.9375 XAU CONTRIBUTION ( Est. ) 0.29
HL-Hecla Mining--------CLOSED AT $05.2500 0.4375 XAU CONTRIBUTION ( Est. ) 0.08
HM-Homestake Gold---CLOSED AT $12.3750 0.6250 XAU CONTRIBUTION ( Est. ) 0.43
NEM-Newmont Mining-CLOSED AT $24.7500 1.8750 XAU CONTRIBUTION ( Est. ) 0.95
PDG-PlacerDome Gold-CLOSED AT $14.6875 0.5000 XAU CONTRIBUTION ( Est. ) 0.41
XAU CLOSED AT 78.46 4.35
- Date: Mon Sep 28 1998 18:51
JTF (Black Scholes -- I need to pull a book) ID#254321:
Copyright © 1998 JTF/Kitco Inc. All rights reserved - Delphi: I think I got it -- the stationary nature of the markets is a neccessary assumption on which all the other B-S calculations are derived ( calculated ) . Hence there must be a number of some kind. I'll bet that there is an implicit assumption that liquidity remain constant as well.
Log normal sounds a bit like Shannon's information theory model. Entropy - based, I think. Need to look at that too. I have Shannon's original manuscript somewhere.
Woe the derviatives traders who forgets, and uses Black-Scholes when the basic assumptions of the model are violated. QED.
If this contributed to the LTCM fiasco, it is ironic that Scholes himself was a major partner. Perhaps he was not watching the numbers.
- Date: Mon Sep 28 1998 18:47
TYoung (Donald...thoughts...) ID#317193: - Only a very few fools own mining stocks. The vast majority of people would not be caught dead with these stocks. Only hard core gold/silver types being owners, they will not sell unless the metals crash.
Mining shares are still in a depression compared to their norms. Few, if any, sellers unless metal prices tank. This opinion is worth exactly what was paid for it...
Tom - Date: Mon Sep 28 1998 18:46
HopeFull (OK DROOY up, Harmony due to go up, any non-Polar Bear opinions on RANGY>) ID#402148: - 1 ) Are they really gonna sell out DROOY and Harmony to finance the unproven porperties?
2 ) Is it true it will quit trading on J'burg Exchange ( per Hoovers ) by end of year. If so does it disappear to pink sheet oblivion?
3 ) The chart is bad, still below 200 day moving average, while most all others have broken up, something stinks here.
I have spent a good part of the day today looking at RANGY and it looks like something is being hidden, that the invisible hand senses. Thanks.
HB
- Date: Mon Sep 28 1998 18:38
Delphi (JTF, 17:53 (Black-Scholes)) ID#258142:
Copyright © 1998 Delphi/Kitco Inc. All rights reserved - JTF, in Black-Scholes model volatility is one of independent variables, or inputs. One calculate option price assuming that volatility is xxx. There are two ways to do it. One is very simple - use standard deviation of underlying security for the period of time, close to the period till expiration. It is historical volatility. There are plenty other methods, for exaple, lognormal distribution is often used. With no big sudden moves in price it gives nod bad result.
Other approach is to use implied volatility, when you are trying to figure out current volatility value by calculations, based on the currently traded option premiums - kind of calculation backwards. That makes possible to adjust option price calculation to current market mood. Also good, but mood may quickly change and then your calculations, that where right in the past become wrong in present. As a matter of fact, Black - Scholes model do not describe market’s dynamic good enough - more like static model for conditions that do not change fast.
G’nite
- Date: Mon Sep 28 1998 18:37
SteveIS (@JP regarding deflation) ID#280339:
Copyright © 1998 SteveIS/Kitco Inc. All rights reserved - Your deflation predictions have been right on especially in regards the $. But I smell change in the air. Greenspan is going to lower interest rates when our unemployment rate is at generational lows. All the biggest financial players are now short billions of LTCM TBonds.
The $ has already fallen over 6% and the TBond has continued to go up. If the dollar continues to move down the TBond is toast. Why might the $ continue down?
1. Next leg down in the stock market
2. More shoes drop on Clinton head.
3. The Fed eases
4. Japan needs to repatriate money to support their market, Banks etc.
5. Latin American crisis hits US banks
6. Greenspan guns the money supply to prop up the stock market
7. CBs sell dollar and buy euros
Gold is true money, dollars are just paper. As they say all commodities eventually return to their cost of production INCLUDING GREEN PAPER.
Buy Gold!
- Date: Mon Sep 28 1998 18:37
Donald (I am looking for some opinion on the XAU) ID#26793: - Does anyone have any feeling strong enough to stick their neck out with a prediction? Is this XAU rally strong enough to ignore a big drop in the Dow should one happen tomorrow? The XAU has moved 30 points in 28 days without much help from the metal. Is the XAU vulnerable? Will it recover post-crash quickly as it did in 1987?
My own opinion is that it would take a hit and recover quickly because it was so terribly oversold a month ago. Anyone else? - Date: Mon Sep 28 1998 18:36
JTF (Buy more when gold peaks out of its two year down channel) ID#254321:
Copyright © 1998 JTF/Kitco Inc. All rights reserved - Silverbaron: I couldn't agree more! That could happen very soon. I think Mike Stewart, and Bill Buckler have good long-term insight on this. I think very soon we will need to listen less to the traders, and more to the longer term investor types such as MS and BB.
I don't know if two days above $300 would do it -- need to consult the tea leaves ( oops -- charts ) when I get home.
It is also possible that we will have a consolidation fairly soon. If we stay above $300, we may be on our way.
I just love how WJC is handling his problems. The Paula Jones lawsuit is a non- problem, but it is worth $1 million. And Mike McCurry is resigning, and after 20 years apparently has no intention of doing PR type work for some time. Perhaps he has tired of lying.
- Date: Mon Sep 28 1998 18:34
6pak () ID#335190:
Copyright © 1998 6pak/Kitco Inc. All rights reserved - September 28, 1998
Gillette says to cut 4,700 jobs, shut factories
BOSTON ( Reuters ) - Gillette Co. said Monday it was cutting 4,700 jobs, or 11 percent of its 43,000 employees, and closing factories as part of a reorganization that will result in a charge of $350 million, essentially wiping out its profits for the third quarter.
The leading maker of razor blades, shaving cream, Oral-B toothbrushes and Duracell batteries, which has been hit by weak economies overseas, said the move allows it to better manage its businesses on a global basis.
In 1997, foreign sales accounted for 60 percent of Gillette's total sales of $10.1 billion.
September 28, 1998
Levi Strauss to close plants, lay off 991 workers
SAN FRANCISCO ( Reuters ) - Levi Strauss & Co., the maker of Levi's blue jeans, said Monday it will close two more U.S. plants and lay off 991 workers as part of a push to stay competitive by cutting manufacturing capacity and boosting its brands.
Clarence Grebey, a spokesman for the privately owned San Francisco company, said the two targeted plants were finishing centers in Amarillo and El Paso, Texas, where garments are sent to be tweaked after they are initially made in separate sewing facilities.
- Date: Mon Sep 28 1998 18:32
Lurker 777 (Hey BART:) ID#317247:
Copyright © 1998 Lurker 777/Kitco Inc. All rights reserved - It seems to me that your good friends over at USA GOLD has taken ANOTHER away from Kitco and has started ANOTHER discussion group. OK, fair enough BUT why not tell us who was that masked man? Come on, its time to spill the beans! WHO IS ANOTHER? This will be bigger than Zippergate. Does he post from the USA or USA GOLD? How about his friend, you know the guy but what's was his name? I know it, its on the tip of my tongue. GOT IT! Friend of ANOTHER. This is BIG. Pick a time, any time and we will spread the word. Thousands of goldbugs will converge upon Kitco to know the truth. Just think of the hits you will get. Better yet post the identity over on the Mountie buy site and watch your sells go through the roof.
Unless of course YOU are ANOTHER? Hmmmm - Date: Mon Sep 28 1998 18:24
Donald (@Kitco) ID#26793: - XAU/Spot Ratio = .265. The 233 day moving average is .248. We have been above it for 3 consecutive trading days.
- Date: Mon Sep 28 1998 18:23
JTF (Thanks -- Perhaps you are right about the deflation) ID#254321:
Copyright © 1998 JTF/Kitco Inc. All rights reserved - JP: Perhaps it is now the US dollar's turn to follow other currencies that have recently lost strength relative to the price of gold. What is hard to comprehend is that 'deflation' can occur even while the price of gold is going up. Perhaps we should be careful when we talk about this, and say that debt collapse in the US dollar is beginning. Debt defaults will liquidate vast quantities of dollars, and weaken the US dollar as an investment sanctuary, even with dropping commodity prices. I would guess that rising commodity prices and rising interest rates will come later when AG opens the flood gates in an attempt to stem the flood. Also, I have noticed that gold has been developing strength relative to commodity prices since Jan 1998. All commodity prices have to do is drop less rapidly.
Whatever happens, we must be nimble and move with the turbulent forces around us. Right now, I am sticking with my gold equity investments, as I see many reasons for them to go up, with only a stock market crash likely to cause them unequivocally to go down. The gold bug Tsunami is building momentum.
- Date: Mon Sep 28 1998 18:23
TYoung (SDRer...I love your responses...) ID#317193: - At least we think it's a liquidity problem...translated that means your broke unless someone is dumb enough to loan you more money.
A true house of paper cards. I don't think I want gold to rise...tells me that contol is lost in the currencies.
Tom - Date: Mon Sep 28 1998 18:19
MM (And...(well now I understand it completely...NOT)) ID#350179:
Copyright © 1998 MM/Kitco Inc. All rights reserved - Some of the assumptions of the original Black-Scholes formula were:
The price of the underlier is lognormally distributed with constant mean and volatility.
There are no transaction costs or taxes .
Markets trade continuouslyi.e. there are no sudden jumps in prices .
The risk-free rate is constant and the same for all maturities.
HELLO...
In markets where such assumptions are unreasonable—especially illiquid markets—the Black-Scholes formula may produce misleading results.
http://www.contingencyanalysis.com/glossaryblackscholestheory.htm
For an example formula:
select Black-Scholes Option Pricing Model ( I got script errors running the page )
http://www.geocities.com/WallStreet/9245/ - Date: Mon Sep 28 1998 18:16
Donald (@Kitco) ID#26793: - Dow/Gold Ratio = 27.42 The 233 day moving average is 28.57. We are below if for 20 consecutive trading days.
- Date: Mon Sep 28 1998 18:13
Silverbaron (Gold Lease rates) ID#290456: -
Does anyone here ( Dabchick? ) have the current data from FT to calculate today's lease rate? If it is on their website, I can't seem to find it.
JTF:
I'm patiently watching this action in the XAU, and like you, hesitant to add to my mining stock positions at these levels....but if spot closes above $300 for 2 days running, I will very likely be buying a boatload of gold bullion, real soon. Well, hmmmmmm, perhaps it will be a small boat.
Oh, yeah...Go SWC !! Fly, baby, fly! - Date: Mon Sep 28 1998 18:07
SDRer (From the mouth of an actual Wizard, to your ear. Listen carefully...) ID#286249:
Copyright © 1998 SDRer/Kitco Inc. All rights reserved -
Re: market liquidity risk
Incorporating liquidity risk into VAR market risk analysis is difficult. Liquidity risk can manifest itself in different ways. For example, an entire market can be illiquid, a single instrument can lose liquidity or your own firm can lose liquidity ( i.e., the market is fine, but counterparties don't want to take your credit risk ) .
Most attempts to incorporate liquidity risk into VAR focus on the first problem. Such attempts discard the standard definition of VAR, which is something of the form:
'VAR is the amount of money such that there is a x probability that the portfolio will lose less than that amount over the next y days'
and replaces it with something of the form:
'Liquidity-adjusted VAR is the amount of money such that there is a x probability that the portfolio will lose less than that amount over the period it takes to liquidate the portfolio'
I advise against the latter definition because:
1 ) It is very difficult ( almost impossible ) to correctly calculate.
2 ) It will require far more assumptions, making results less intuitive.
The standard approach to calculating this liquidity-based measure of VAR is to start off with a closed form ( linear ) VAR model, but multiply the individual instrument sensitivites to each risk factor by the square root of T where T is the expected amount of time it will take to liquidate that particular instrument. For example, if a bond entails a $1MM sensitivity to the 10-year Treasury rate, but will take 5 days to liquidate, model the sensitivity as being [5^ ( 1/2 ) ]$1MM. Mathematically, this has the same effect as scaling the volatilities of individual risk factors, but does it on a per instrument basis. For example, another bond may also be sensitive to the 10-year Treasury rate but be liquidatable in a single day.
There are various problems with this approach:
Assessing the performance over multiple days while instruments are being liquidated requires a multi-time-step model. You have to model a multi-day path for each variable to do it correctly. By ( in effect ) scaling standard deviations for time, the model assumes that a two-day move in a variable will be exactly the same as the one-day move in the same variable, only larger by a factor of 2^ ( 1/2 ) .
It also assumes that each instrument is individually liquidated as soon as possible. Suppose you had a liquid instrument hedging an illiquid instrument. The formula assumes that you would liquidate the liquid instrument before the illiquid one.
In practice, no one would liquidate a portfolio that way. This raises the question of:
what would the liquidation strategy be?
The answer is: we don't know. It will depend upon circumstances.
COMMENT:Don't feel bad, even the WIZARD does NOT KNOW! Away to find Cherokee and Aurator in the desert...[in the OTHER desert] bbml
- Date: Mon Sep 28 1998 18:03
JTF (Looks like no one really knows what is going on) ID#254321:
Copyright © 1998 JTF/Kitco Inc. All rights reserved - Silverbaron: I think we ought to get to the bottom of whether we can figure out what is happening to the dollar/gold carry. While you could argue that gold will go down if AG officially lowers interest rates, namely buy on the rumor, sell on the news -- I am tempted to hang on. The reason I am hanging in there is partially due to what appears to be a liquidity crisis, or a bottoming in commodities, or a realization that WJC is in more trouble when the Linda Tripp tapes come out. Also, why is WJC so eager to pay off Paula Jones, and why is that supposedly dead lawsuit now coming back to life? It appears that is worth 1 million dollars for some reason.
I think something is coming from the Hyde committee regarding possible impeachment proceedings on Oct 6.
Regardless, I am quite happy with the way gold is behaving, but I will not add to my investments.
Pretty soon we will peek out of our two year down channel in gold bullion, and a boatload of pros will pile in!
Interesting times.
- Date: Mon Sep 28 1998 18:02
TYoung (SDRer...mind giving me your read on rehypothecation of collateral...) ID#317193: - by the hedge funds and, no doubt, other financial institutions dealing in derivatives?
Take about leverage...ughhhhh!
Tom
- Date: Mon Sep 28 1998 18:01
JP (JTF---You have got a good argument---The gold price is rising for the following reasons?) ID#253153:
Copyright © 1998 JP/Kitco Inc. All rights reserved - 1. We are in a liquidity crisis with floating currencies, massive debts,worlsdwide, defaults, bear market in stocks, political chaos and runaway deflation which started in Feb 1998.
2. Gold is rising as an hedge against the coming bankruptcies.
3. Gold is rising because money exiting stocks and real estate is seeking safe havens.
4. Gold is rising because the market is beginning to discount a fully US convertible dollar into gold and a new fixed currency system tied to gold.
5. The rise in the price of gold will have NO EFFECT on the recessionary trend in force.
6.The age of defaults and banktruptcies has arrived. As we descend below DOW 7425 massive banktruptcies will begin to unfold.
Now let talk about the good news.
After this deflationary phase is over and most of the debts have been wiped out, a golden age of PROSPERITY will begin. It will be based on US currency tied to gold as the anchor of the new monetary system.
- Date: Mon Sep 28 1998 17:53
JTF (Black-Scholes) ID#254321:
Copyright © 1998 JTF/Kitco Inc. All rights reserved - Delphi: Thanks. Did not know what gamma and delta stood for. I think my question still stands, because I know there is a number ( or a parameter of some kind ) that indicates the constancy ( stationary character ) of the options traded. If the market shifts suddenly, all of the options trading schemes go haywire, and the risk calculations are wrong. Seems like that's what might have been what caught LTCM unawares.
There is another explanation, and that is the markets have not changed, but that LTCM made the bet that a turning point in interest rates was coming up, and bet wrong, big time. One thing I do not understand is why short term rates are dropping so quickly, since AG has pledged that he will not let rates drop. Think he has lost control of the short term treasury markets?
- Date: Mon Sep 28 1998 17:53
Silverbaron (JTF) ID#290456: -
We've got APH selling out of gold on Friday, and Cyclist selling out today, glenn the permagoldbear covering his gold short position today, Yvan Auger calling a top at XAU 78 ( but it might go to 110 ) ......Duh. My head hurts. What the heck is going on?
Too many cross-currents here.....hmmmmmmmm. - Date: Mon Sep 28 1998 17:52
MM (IMF stuff for newbies visiting Kitco) ID#350179:
- - IMF history
http://www.cftech.com/BrainBank/FINANCE/IMFHistory.html
( Address by Stanley Fischer Jan 22 1998 )
IMF Resources
...Part of that shared responsibility is to provide resources to the IMF. Let me emphasize that the IMF is not a charitable institution, nor does it carry out its operations at taxpayers' expense. On the contrary, it operates much like a credit union. On joining the IMF, each member country subscribes a sum of money called its quota. Members normally pay 25 percent of their quota subscriptions out of their foreign reserves, the rest in their national currencies. The quota is like a deposit in the credit union, and the country continues to own it. The size of the quota determines the country's voting rights, and the United States, with over 18 percent of the shares, is the largest shareholder. Many key issues require an 85 percent majority, so that the United States effectively has a veto over major Fund decisions....
http://www.imf.org/external/np/speeches/1998/012298.htm
Definitions offered by IMF:
The General Arrangements to Borrow ( GAB )
http://www.imf.org/external/np/exr/facts/gab.htm
Gold in the IMF
http://www.imf.org/external/np/exr/facts/gold.htm
Special Drawing Rights ( SDR )
An International Reserve Asset
http://www.imf.org/external/pubs/ft/survey/sup0996/10sdr.htm
The New Arrangements to Borrow ( NAB )
http://www.imf.org/external/np/exr/facts/nab.htm
Mar. 1998 IMF Reserves Can anybody find a more recent report?
( you need adobe acrobat ) See page 110
http://www.imf.org/external/pubs/ft/ar/98/pdf/file08.pdf
Or just poke around... ( Or ask SDRer ; )
http://www.imf.org/external/map.htm
Database site:
http://dsbb.imf.org/category.htm
- Date: Mon Sep 28 1998 17:44
goldy88 (GOLD LEASERATES) ID#42039: - TO ALL:does anybody know today s gold lease rates?
Sequin & LGB & joe two cents :thanks for your answers concerning LTCM and gold . - Date: Mon Sep 28 1998 17:39
JTF (Reason for gold rally -- Dollar/Gold carry about to fold?) ID#254321:
Copyright © 1998 JTF/Kitco Inc. All rights reserved - JP, all: Please look at my 15:49. I think I have made a fairly convincing argument that the Dollar/Gold carry is about to fold, or is folding. Short term interest rates on gold just went up recently, and sometime this weekend there was a newspost on Kitco that LTCM was heavily short gold. Think it was Canadian. Of course that would have to be intensely covered up, if true. Especially interesting, given how interested AG was in LTCM's affairs.
If the commercials were betting interest rates are going up, not down, there is about to be a bloodbath, if it has not already started.
Another possibility for the current gold rally is a continued liquidity crisis amongst the dollar derivatives traders.
If interest rates go up, it probably will be relatively short term, unless we have a full blown dollar crisis. I am watching the commodity price indices very carefully, for any sign of deflation/inflation. Could be that we are bottoming, but the US markets have not really responded. If commodity prices continue to drop, then we will know that the deflationary process is building up steam again.
Sure is hard to know what is going on -- like blind men feeling different parts of the elephant. - Date: Mon Sep 28 1998 17:17
Delphi (JTF, 15:49 - LTCM, Black/Scholes) ID#258142:
Copyright © 1998 Delphi/Kitco Inc. All rights reserved - JTF, we do not know what kind of derivatives where sold ( or bought, or both ) by LTCM, but from many-many messages on this subject here we may assume, that at least one significant component was options on bonds. Bonds price is rising for a long time. Probably, they made [wrong] conclusion by scheme what goes up should go down and wrote calls. Knowing that money used to warrant their position where borrowed they where probably limited by time, so expiration time of these options are somewhere close. So far bonds continue to go up in price, written options are now in-the-money so that folks who bought them now may ask for delivery, and that was not in plan - they must own them at the first place, i.e. bought at current price in huge volume. That’s seams to be the problem.
Regarding Black and Scholes model. It does not give any advise how to trade, it simply a tool to calculate option price in a future for assumed situation ( strike, market price, interest rate, etc. ) . In this respect it is what if…? kind of model.
Answering your question about gamma: If delta is the amount an option will change in price for a one point move in the underlying security, then gamma measures the amount the delta changes for a 1 point move in the underlying security
- Date: Mon Sep 28 1998 17:14
NTEOTWAWKI (Regular fix Blanchard offline due to Georges) ID#389387: - Any discrete sellers of 1/4 oz. Eagles in the lower 48 recommended? Kitco perhaps?
- Date: Mon Sep 28 1998 17:09
JP (Commercials holding record short positions in T bonds are about to be wiped out) ID#253153: - Steve IS reported in his 16:45 post that commercials continues to hold near record short positions in the T bonds future market. As I see it, interest rates on the long bond are about to plunge to record low's probably below 5% forcing the commercial to cover or perhaps default
on margin calls and be liquidated. We are in a runaway deflationary trend that can't be reversed or stopped by any politician or central banker. It will run to exhaustion and many of big commercials banks in the world will fail.
- Date: Mon Sep 28 1998 17:06
MM () ID#350179:
- - The IMF is believed to have between $5 billion and $9 billion in normal capital plus about $15 billion in the special credit line known as General Arrangements to Borrow. More might be needed from private lenders or even the Federal Reserve.
Battered Brazil hopes for relief at IMF meeting
http://www.foxnews.com/js_index.sml?content=/news/international/0928/i_ap_0928_75.sml
Yeltsin works to complete Cabinet
http://www.usatoday.com/news/world/nws5.htm - Date: Mon Sep 28 1998 17:05
Nicodemus (So, man went to the moon, gold next?) ID#335379: - Let's see..... polish the maple to reflect heat, push coin against GIGANTIC paper spring, tighten lease rate, release paper spring, observe short positions unwinding,
clock acceleration, brace for impact on moon.{:- )
Nicodemus, fairly impressed with XAU resiliancy lately
- Date: Mon Sep 28 1998 16:59
SDRer (pricing electricity derivatives-[yes, derivatives for electricity…ooh my]) ID#290172:
Copyright © 1998 SDRer/Kitco Inc. All rights reserved -
Few good resources in this complex field. Much of the research is proprietary. A simple starting point is to explore pricing of commodity contracts in general. Because the underliers are not financial
instruments, but consumables, their prices can exhibit drifts. This can invalidate the assumptions of many option pricing models. The solution is to use the forward price of the commodity as the underlier as opposed
to the spot price. i.e. you would use black's model as opposed to black and scholes for simple options. A suitable reference is john hull's options, futures and other derivatives. Note that drift is just one issue. there are many others. For example, depending upon the mix of generating facilities in a region ( coal, gas, nuke,etc. ) the marginal price of generating electricity ( and hence, the spot price ) can become lumpy, rendering normal or lognormal assumptions invalid.
And then, this: [Email fragment-] --Keep your eyes on the 'train wreck' that occurred last month in physical electricity trading and risk management. Losses for the poor losers are quoted in the hundreds of millions of dollars ( US ) . COMMENT: Losers? Thought we'd 'done away' with the concept of 'losers'...everybody wins...yeah. - Date: Mon Sep 28 1998 16:53
TYoung (aurator...) ID#317193:
Copyright © 1998 TYoung/Kitco Inc. All rights reserved - Every thing I read and all I can guess at says LTCM was not short gold. Really does not mater...if say $100 in collateral is re-pledged several times and called on to meet margin you got one hell of a cascading series of defaults. Throw in any counterparty defaults and, well...the picture is sort of...well...ugly is a nice word. Liquidity is completely gone.
No way to know...yet. Maybe yes, maybe no. I wait because I'm trying not to force unknown facts to fit into my round hole ( no pun intended ) . Do we have a square or round peg? One can easily see what one already believes. We will know shortly.
Tom - Date: Mon Sep 28 1998 16:49
SteveIS (LTCM and TBond) ID#280339:
Copyright © 1998 SteveIS/Kitco Inc. All rights reserved - One of the biggest bets made by LTCM was short the TBond. Maybe the reason the large banks we so willing to contribute to the bailout was that they expect this position to turn favorable.
Gold, silver and crude have been moving up. The dollar has been moving down. With a Fed ease tommorrow these trends should continue. Commercials continue to hold near record short position in the futures market.
Now all the big boys want the TBond to head south. They are certainly in position to make it happen. The Tbond is the remaining prop to the anti gold deflation scenerio. When the TBond goes south Gold will explode.
Buy gold!!!
- Date: Mon Sep 28 1998 16:29
aurator (Some fancy multipliers here) ID#250121: - SDRer/ TYoung
I wonder if this means that Au has been re-pledged several times and leased out as paper rather than physical? Where I come from, this is quite simply FRAUD. Repledging an asset without advising all lenders
High gearing :: Re-pledging assets :: Derivatives :: think I'll join cherokee in the desert.
All
radio reports panic buying of solar showers, barbecue sets, gas cookers in Melbourne as the gas crisis deepends. Auckland had her power crisis, Sydney has fouled water, now Melbourne is without gas..\
- Date: Mon Sep 28 1998 16:29
aurator (Some fancy multipliers here) ID#250121: - SDRer/ TYoung
I wonder if this means that Au has been re-pledged several times and leased out as paper rather than physical? Where I come from, this is quite simply FRAUD. Repledging an asset without advising all lenders
High gearing :: Re-pledging assets :: Derivatives :: think I'll join cherokee in the desert.
All
radio reports panic buying of solar showers, barbecue sets, gas cookers in Melbourne as the gas crisis deepends. Auckland had her power crisis, Sydney has fouled water, now Melbourne is without gas..\
- Date: Mon Sep 28 1998 16:05
MoReGoLd (@AU) ID#348129: - Very impressive reversal in POG today. Also confirmed by rising silver.
TSE Golds continuing to rally big time. GO Gold.......... - Date: Mon Sep 28 1998 16:05
Gollum (DOW +80) ID#43349: - DOW came back to finish with a modest gain for the day. I can hardly wait for the morrow.
Now we wait to watch the overnight markets. - Date: Mon Sep 28 1998 16:02
Cyclist (Cash) ID#26467: - FWIW Sold and waiting on the sidelines until October 6-7.
Real fireworks to start end of the month of October,to crest
second third week of November.Target price 330,XAU 100.
Drooy has been superior.It doesn't happen to often to double in a
short time.
I believe next play is in Harmony target 7 ,will wait for the pause.
Have a good day.. - Date: Mon Sep 28 1998 16:01
FOX-MAN (COMEX METAL WAREHOUSE TOTALS..(Silver continues to dwindle...)) ID#288186:
Copyright © 1998 FOX-MAN/Kitco Inc. All rights reserved -
COMEX Metal Warehouse Statistics for Sept. 28
-- TOTALS
Gold 924,724 + 0 troy ounces
Silver 71,919,194 - 333,488 troy ounces
Copper 66,625 + 1,303 short tons
*************************************************************************
Gold and Silver made a nice turnaround this morning. I thought for sure
that we were going to go to a lower level before rebounding upward.
I got out of silver when it bounced up to 5.18 this morning and now I'll
have to wait for a good re-entry point. Keeping my eyes open for a good
APH recommendation for said commodity...Fox-man - Date: Mon Sep 28 1998 15:49
EJ (Gold gently softer through late Europe) ID#229207:
Copyright © 1998 EJ/Kitco Inc. All rights reserved - Monday September 28, 12:04 pm Eastern Time
LONDON, Sept 28 ( Reuters ) - Gold softened through late European trade on Monday after over-the-counter options expired quietly leaving dealers wary of moves in late U.S. trade.
London gold fixed at $292.25 a troy ounce in the afternoon, down on the morning's $293.80, as the market remained calm relative to Friday's $6.00 rise to four-month highs and its equally rapid fall.
``There seems to be pretty good support at $292.00. I would imagine us seeing a $292.00 to $296.00 range for the next couple of days and then maybe a move higher,'' said one London dealer.
Monday's expiry in monthly over-the-counter options passed quietly without obvious, last-minute moves to force the price towards any particular strike price.
Options give the holder the right, but not the obligation, to trade gold at a fixed strike price at an agreed future date.
The monthly OTC expiry sometimes sees rapid swings in prices before expiry or in the hours afterwards as options writers juggle their positions or the market adjusts its focus to the month ahead.
``It just slipped by and hasn't really done much since. That doesn't mean there won't be something late on today,'' said the dealer.
Spot gold was last at $293.00/$293.50 versus Friday's New York close at $293.80/$294.30.
Its quiet day on Monday defied analysts' predictions of a bullish week for gold. Several predicted gold trading higher after OTC expiry and challenging $300.00 resistance in the near future.
Silver managed small gains despite gold's fall, rising to be last at $5.18/$5.210 against its $5.15/$5.17 Friday close in New York.
Platinum group metals remained dull, with platinum flirting once again with long-term support at $350.00 a troy ounce.
Dealers have attributed its slackness to lower industrial demand in the electronics and vehicle manufacturing sectors and renewed Russian sales.
The metal was last trading at $350.00/$352.00, $2.00 down on New York's Friday close, while palladium was just 50 cents lower $285.00/$290.00.
- Date: Mon Sep 28 1998 15:49
JTF (LTCM, and failure of Black/Scholes statistics.) ID#254321:
Copyright © 1998 JTF/Kitco Inc. All rights reserved - MaxMoseley: Thanks. Question for you. If LTCM used their capital to borrow securities ( $2.2 billion to buy $125 billion ) , that is 50:1. Then they go and buy derivatives of some kind ( not specified ) . These could very well have been leveraged as well. A 10:1 leverage might be conceivable with futures and certain kinds of options. So, is it not possible that they could be at risk for the value of $1.25 trillion after all? Might take some time to unwind these positions, with more losses incurred. They could really be out on a limb. Even more interesting when a lot of VIP insider types put their personal funds into LTCM.
I could be wrong, but if not, this really boggles the mind -- how many of the pro's buypass regular margin accounts of the masses, and just borrow ( currency related ) securities at 50:1 'margin'. Don't think the little guys like us could do this.
What frightens me is that there may be alot of big time operators out there -- hedge funds, banks, etc. that also do this. Perhaps they and the lenders think that borrowing certain currency related securities -- treasuries, bonds are so secure that little risk is incurred --.
Just a thought -- think the Dollar/gold, and the Dollar/Yen carry trade is unravelling? This could be what's happening. Didn't gold lease rates just go up, and didn't we hear from some other source that LTCM was heavily into short gold positions? Sounds like the Dollar/gold trade to me. If so, this will be hotly denied by LTCM. This also would explain why AG got involved.
Another thought -- anyone know how to get the Black/Scholes numbers on currency securities derivatives trades? Is the 'volatility' given by Gamma? There has to be some number that indicates whether the process is stationary or not. As I recall, all Black/Scholes is, is application of the binomial series to derivatives. ( random walk, I think ) . If the relevant indicator is changing, those derivatives trades might be toast, as B/Scholes analysis would no longer apply.
This might be an excellent indicator to follow as we try to ride the Gold Bug Tsunami. The unravelling of the Dollar/gold, Dollar/yen carry trade could then be watched with an appropriate indicator that would also allow us to guess how much trouble the derivatives traders in those specific securities are getting into.
We need anything we can get our hands on, given the rough ride we can expect. I am so gun shy after two years of being burned that I will risk only 25% of my liquid assets in gold equities. Also -- there is still the risk of a complete market meltdown to consider -- which would pull down the gold equities if it happened. - Date: Mon Sep 28 1998 15:38
James (RR rode to the rescue of POG by talking up the YEN) ID#252150:
Copyright © 1998 James/Kitco Inc. All rights reserved - I was stopped out of my PDG short for a small loss after being up considerably early in A.M. It just boggles the mind that anyone can even think that the JY should increase against the USD. I suppose that when Standard & Poor reduces their soveirgn debt to junk bond status that sentiment might change. The only way that Japan can recover, let alone the whole of SEAsia is with a devalued JY. They may be able to talk it up & manipulate it short term, but I still think it's on the way to 150 to the USD & may end up much lower. A low JY combined with weak global demand & increased supply does not strike me as a recipe for higher POG. Then again, I have this silly habit of getting hung up on fundamentals.
Maybe there will be a real panic into AU, but I have a major problem seeing the CBs just standing by watching & wringing their hands while their currencies & bonds are trashed as investors seek a safe haven in AU. - Date: Mon Sep 28 1998 15:37
kitkat (@RLubman - Re. Australian Gold Exports) ID#208393: - The six month increase of 10 million to 753 million for Australian Gold exports to America and a similar increase to Europe is astounding. Any conjectures who the buyers were?
- Date: Mon Sep 28 1998 15:33
TYoung (SDRer...and I thought I was worried about derivatives...) ID#317193: - If they are routinely re-pledging, which can be done several times, then I suggest my worries about counterparties is the least of the worries. Now I think I know what you knew...and now we all know... what I'm not sure any of us wanted to know... because we now know what the FED knows and God knows this is as bad as we knew it was but did not know why. Yes?
Tom - Date: Mon Sep 28 1998 15:29
Jack (Romarco Minerals.....Any opinion is welcome) ID#252127: -
Company has properties in the vicinity of Barracks Miekle Mine and the Franco sisters Ken Snyder Mine, in addition to other well regarded areas in Nevada.
It has been announcing high grade intersections and fair resource tonnages, but is down considerably from its past highs. Company has about 26 million shares and about $15 million Canadian in cash.
http://www2.cdn-news.com/scripts/ccn-scroll.pl?query=romarco
or http://www.romarco.com - Date: Mon Sep 28 1998 15:24
RLubman (AFR article on Aussie AU exports) ID#408228:
Copyright © 1998 RLubman/Kitco Inc. All rights reserved - The following is in Tuesday's Australian Financial Review, FYI-
Good export data skewed by gold moves
By Michael Dwyer
Australian exporters hit by the Asian crisis may not have benefitted as much from trade diversification as the Federal Government has claimed, according to new research.
The Federal Government has been highlighting trade diversification to point out the resilience of Australian exporters in the face of weaker demand in Asian markets.
Our diversification strategy is working, the Deputy Prime Minister and Minister for Trade, Mr Tim Fischer, said last week.
Launching the Coalition's trade policy, Mr Fischer noted that exports to markets like the United States and Europe had increased substantially since the the Asian crisis began.
But new research from the ANZ Banking Group suggests much of the benefit of this trade diversification will be transitory at best, with the reprocessing of gold accounting for a large proportion of the increase in export volumes to new markets.
Australia's total exports rose by 7.3 per cent in value from the first half of 1997 to the first half of this year, with gold accounting for close to half the increase.
Exports to the US have increased by 50.2 per cent from $2.8 billion in the first six months of 1997 to $4.2 billion in the first half of 1998.
But gold exports to the US grew from just $10 million to $753 million, accounting for just over half the 50.2 per cent overall increase in total exports.
A similar scenario emerges from an examination of Australia's trade with the European Union. Australian exports to the EU jumped by 38 per cent from $4.1 billion in the first half of 1997 to $5.6 billion in the first half of 1998.
But gold exports to the EU leapt from $11 million to $321 million over the same period. Gold exports to the EU accounted for around 25 per cent of the overall increase in exports from Australia from the first half of 1997 to the first half of 1998.
The role which Australia has been playing in reprocessing gold from countries hit hard by the Asian crisis also shows up in imports data.
Gold imports into Australia soared from just $297 million in the first six months of 1997 to $1.5 billion in the first half of 1998.
Over the first six months of this year, Australia imported around $577 million worth of gold from South Korea and around $248 million from the members of the Association of South-East Asian Nations ( except Singapore ) .
A big factor in Australia's export performance since the advent of the Asian crisis appears to be attributable to one factor which is probably not going to be sustainable, said ANZ chief economist, Mr Saul Eslake.
It would appear that much of the gold handed in by South Koreans and the like at the height of the financial crisis has been sent to Australia for reprocessing, Mr Eslake said.
And this funny stuff going on in the gold industry has obviously impacted on Australia's export performance, he said.
It's a good business, but it's only a temporary one.
Mr Eslake also warned that many of the markets into which exports have been diversified are likely to be hit by the Asian crisis.
- Date: Mon Sep 28 1998 15:22
Gollum (DOW +48) ID#43349: - Market contineing to weaken. Hang on, the next 45 minute will be lots of fun....
- Date: Mon Sep 28 1998 15:22
OLD GOLD (Why POG is soaring) ID#242325: - Glenn; Why is gold rising? Because an unprecedented global liquidity crisis will force the G7 central bankers to ease AGGRESSIVELY; INFLATION RISKS BE DAMNED. This is a fundamental change in the CB paradigm of the last 20 years. Morgan Stanley's Steve Roach -- an ex inflation hawk -- is worried the Fed will not ease fast enough. Who said there is nothing new under the sun?
- Date: Mon Sep 28 1998 15:18
Scito (The end is near) ID#289271: - Anybody see the Drudgereport lately? What think ye will happen to the markets now?
- Date: Mon Sep 28 1998 15:18
Gold Dancer (Max_Mosley) ID#377196:
Copyright © 1998 Gold Dancer/Kitco Inc. All rights reserved - Agree with you on LTCM. Since we do not know what their positions
are we will not be able to follow and thereby know their outcome.
I don't trust any of the news articles because I would expect a lot
of planted items to help their cause. These are all the the big boys
you know. Never trust the insiders. They have too many contacts and
can purchase whomever they want.
My guess, since the Fed did the arranging, is that they will help
things along. So whatever markets are helped by their policy changes
will help LTCM. Just a guess. Wasn't too difficult.
The Fed needs, because the world needs, a rising gold price. So
no matter who says what, the price of gold is going UP. It is a no
brainer from this point on.
Go Gold.
Thanks, GD
PS. It seems that is always good to be the first of something
that needs help. Whether it is an S+L or a Bank or a Hedge Fund.
The rest will wait in line. - Date: Mon Sep 28 1998 15:17
glenn (vacation) ID#429363:
Copyright © 1998 glenn/Kitco Inc. All rights reserved - One of the reasons I covered this morning was because I'm going on vacation starting this Friday morning and I will not be back until late Monday Oct 12th. 10 Days in florida to include Kewy West. Hey I know that they just had a hurricane but the tickets are already bought! Can't cancel. Anyway, If gold does run to the upside, you can flame me now or wait until after I get back. No talking about me behind my back. At least let me defend myself. ( I'm going to try really hard not to trade on vacation. )
Today's action was very bullish. It kind of shocked how strong it was after we made the low and then came thru $295.00. After that you had a sense we were headed higher.
Is this market headed for a double top at $315
It almost looks that way now. We finally closed above the 200 DMA today! Very Meaningful! Since I think that Gold is going to $1,800 someday I am going to be sceptical going up knowing that there will be plenty of rally to catch even if I miss $20 or $30 worth. At this point I am still looking for $250 even if we make a double top at $315.00
If spot closes above $320 then I'll be more excited but I still do not see that. - Date: Mon Sep 28 1998 15:04
cherokee (@.....in.phoenix.looking.for.the.phoenix......a.golden.phoenix.) ID#288232:
Copyright © 1998 cherokee All rights reserved -
'i don't 'see' how gold can make a meaningful rally....'..glenn..
words that will be repeated over and over and over and over
and over.........ad infinitum...
'how in the world?'......
'now why did'nt I SEE THAT?
'who would have believed?'
'my financial advisor TOLD ME gold was dead!'
on and on........when the train pulls away from the station,
those with-out tickets will simply wave and wonder why/how they
missed the train.......
same scenario with the crude one.....tickets for the reception
are good for over a year.......and damned cheap!;
cherokee!;..heading.into.the.desert.for.some.fun.in.the.sun....
- Date: Mon Sep 28 1998 14:58
crazytimes (Thanks Donald) ID#344326: - Very good analysis and a belated thanks to you for all the links you post here. It's starting to look like some good days are coming for Kitcoites! ( I better stop, I'm getting teary eyed, no kidding )
- Date: Mon Sep 28 1998 14:55
moa (Another $2 up day....) ID#269128: - two by two to row tomorrow?
And then on to $325...eh gogold? - Date: Mon Sep 28 1998 14:52
STUDIO.R (@off to a session @ studio7......) ID#119358: - bbml..........turn 'er up,baby.........one and a'two and a' four.
- Date: Mon Sep 28 1998 14:50
Max_Moseley (@The Skeptical Investor) ID#270221:
- - On re-reading my last posting, I see it may be a bit unclear. If LTCM goes under they will owe the borrowed 100 bn plus their net losses on their derivatives bets. Their capital being ( relatively ) insignificant, this will be the loss that the lending banks will suffer. We should not however assume just from the size of the numbers involved that they will collapse. What they have run into is a CASH FLOW PROBLEM. The 3.5 bn funding package was put in place to enable them to meet cash flow needs and avoid a collapse and forced liquidation. Lenders do this kind of thing all the time: it is in principle aa perfectly legitimate business practice. 3.5 bn in order to prevent potential losses of 100 bn plus ain't a bad deal. The big question now is will it work? If the markets continue to move against LTCM's positions they can go further into the hole VERY quickly. Will an orderly wind-up of these positions prove possible? Max
- Date: Mon Sep 28 1998 14:50
Gold Dancer (DROOY/RANGY) ID#377196:
Copyright © 1998 Gold Dancer/Kitco Inc. All rights reserved - My girl friend bought a lot of RANGY last week: 20,000 shares @
21/32. It looked like a better buy than DROOY to her becasue of all
their assets including 7,500,000 shares of DROOY. I agreed with her
an now we both own a lot of both.
Don't know when RANGY will move, though, must be a big seller in
there. Or maybe Rangy is just not in the limelite. It just might be the most undervalued of all the South Africans so when it lights up it
will move pronto to $2.
I think this gold bull will continue for another 12 months and the
stocks will do very well. All of them. But I am watching things
carefully, so far so good. I expect the South Africans, and the Juniors
to begin moving next month sometime in earnest. No pull backs coming
however. I have seen markets like this before. The ones that give you a long time to get in once they start to move you never get another chance
for quite a while. Unless your willing to pay a higher price. So for us
we are going to hold and hold till we see a verticle price rise of
size and volume. So far all I see is steady price increases with no
big pull backs. Perfect. Lots more coming to the upside.
Thanks, GD - Date: Mon Sep 28 1998 14:47
Donald (@Crazytimes) ID#26793: - When this rally started the XAU was way behind. Now it is neck and neck with the metal. Gold started to rally on August 28th, the XAU on August 31st.
- Date: Mon Sep 28 1998 14:44
STUDIO.R (@Isure...Of what?...........) ID#119358: - Congratz to lit'l Isure.!!!!!! YeeeeeeeeeeeeHaaaaaaaaa! Dat's Geeeeerrrrrrreat!
Oh..... it's O.K. for me to root for the Tigers...we don't play football here anymore. GEAUX TIGERS!!!! #6 and climbin'! - Date: Mon Sep 28 1998 14:44
SDRer (Tyoung-Counterparty is less a problem than what they are pleased to call) ID#286249:
Copyright © 1998 SDRer/Kitco Inc. All rights reserved -
Rehypothecation-[don't you love it!]
Rehypothecation is the reuse of posted collateral. For example, if an institution receives collateral from a counterparty to secure an obligation, that institution may rehypothecate the collateral by lending it or posting it as collateral for one of its own obligations to a third party.
Rehypothecation is not permitted in many jurisdictions, but is commonly practiced in the United States.
Typically, a collateral agreement between two parties will explicitly permit or not permit rehypothecation.
Shall we discuss banks in trouble? {:- ( (
- Date: Mon Sep 28 1998 14:42
crazytimes (2BRO2B?) ID#344326: - The 8K is out on Eagle. GE playing it very safe. It's not pretty but what did we expect.
- Date: Mon Sep 28 1998 14:38
2BR02B? (crazytimes) ID#266105: -
More likely when Eagle gets sold down the river... : ) - Date: Mon Sep 28 1998 14:35
crazytimes (Never mind one month lease rates......) ID#344326: - the gold bull will be confirmed when RANGY gets off the ground. No?
- Date: Mon Sep 28 1998 14:34
Highhopes (Don't you get the feeling that this is the move?) ID#404410: - Our third try at pushing over $300. Don't you just get the feeling this is the push that will do it? Not a prediction; more an instinctive feeling. Let the Guru's ( there are soo many of them ) tell you for sure.
Highhopes - Date: Mon Sep 28 1998 14:34
Isure (@ Studio) ID#368244: -
She got a second, and won 60 bucks, you would have thunk it was 60 thousand.
It sure does hurt to think that you now have to pull for those tigers seeing as to how your from Oklahoma . - Date: Mon Sep 28 1998 14:30
STUDIO.R (@glennO.......) ID#119358: - Damnit!....lay off dat' bottle, brother,,,you know what the Doc said!!! ;^ ) ~ hell, if you're jumpin' in, I may needs to buy me a leetle mo' rangitO!!
- Date: Mon Sep 28 1998 14:29
crazytimes (Shorts come and go so quickly around here, Toto!!) ID#344326: - Thanks for the post Glenn. Put a smile on my face. Your previous prediction had me worried.
- Date: Mon Sep 28 1998 14:25
glenn (Gold) ID#376309: - This an't Kansas anymore Toto!!
I can't see how Gold can stage a meaningful rally at this time but the charts are telling me I'm missing something and the charts NEVER lie. I've covered my shorts this morning. - Date: Mon Sep 28 1998 14:23
STUDIO.R (@Isure.....Of what?..........) ID#119358: - Yup....ya'll are safe now. #1 is now in Kansas City, flew out this morn. #2 is back to Baton Rouge, said her little car almost blew off the Mississippi bridge last night coming back into town.....whew! LSU closed, grocery stores empty she reports ( probably means they were plum outta' brewskis and chips! ) .....
Did we win the bbl race yesterday? - Date: Mon Sep 28 1998 14:22
crazytimes (XAU, leading or lagging spot price?) ID#344326: - Doesn't spot usually lead and XAU follow? It seems to be the reverse today. Any comments?
- Date: Mon Sep 28 1998 14:19
NightWriter (Mary, Mary) ID#390415: - Gold not acting as a contrarian today.
XUA screaming ( up almost 6% ) .
Somebody out there must like gold.
- Date: Mon Sep 28 1998 14:17
Isure (@ STU--- STU-- Studio) ID#368244: -
Are the roads of Louisiana safe yet ? - Date: Mon Sep 28 1998 14:17
Gollum (DOW +116 GCZ8 297.6 SIZ8 5.235) ID#43349: - Market has picked up again, retested morning highs and failed.
Gold and Silver both up firmly.
Bonds down.
Still looking for late afternoon selldown. - Date: Mon Sep 28 1998 14:09
STUDIO.R (@LGB.O.......On behalf of our beleaguered membership.....I warmly welcome you to....) ID#119358: - Itsa Gona Fly fraturdity........I'll slip you the secret handshake A da' next chapter meeting..... ;^ ) ~ who's bringin' da kegs?
- Date: Mon Sep 28 1998 13:59
Max_Moseley (@The Skeptical Investor) ID#270221:
- - JTF: I presume that the 1.25 trillion figure refers to the value of the assets underlying their derivative positions. My understanding - and I only have the same public sources as everyone else - is that the hundred billion is what they borrowed i.e. this is what they owe directly to banks, aside from any mounting losses on the derivative positions themselves. The 2 billion plus is the money invested in LTCM by banks and individuals. This is the only bit they don't owe if they go under! So, if these figures we have been hearing are in the ball park, then the leverage on the DERIVATIVE postions is many multiples greater than 50:1.
As an aside, of the 2 billion of working capital, I wonder how much of that invested by banks is covered by cash reserves ( 10% ) , and how much of that invested by individuals was itself BORROWED - perhaps from some of the same banks!
The mind boggles! Max - Date: Mon Sep 28 1998 13:50
LGB (@ Allen.... River running through it) ID#269409:
Copyright © 1998 LGB/Kitco Inc. All rights reserved - With perfect timing, Allen flicks the 20 yard length of perfectly arcing line...the wolly bugger settles softly in the pool with nary a ripple....
The speckled LGB rises, eyes the dry fly carefully, warily, then with a mighty shake if it's tail, engulfs the morsel....Allen yanks gently with just enough pressure and ...zzzzzzzzz..... the reel screams as the LGB is hooked!
Shredded Loral shares? Allen..Allen...Allen!
When Globalstar, Cyberstar, and our other big contellation programs are in place and producing revenue...within less than 2 years...we'll be raking in $5.00 per share...easily making our stock price worth $100.00 per share or so.
Now you tell me if it's a shredder at $15.00 !!!!
It'll be $20.00 in late 98, $25.00 in early 99, $50.00 in late 2000 ( after Y2K is sorted out!!! ) , and $100.00 in 2001..when we're fully involved in our Space Odyseey
Off to rocket science now...we saw a large cigar shaped object threatening our GOES2 weather sattellite!
- Date: Mon Sep 28 1998 13:45
EJ (Let the interest rate politicing begin!) ID#229207:
Copyright © 1998 EJ/Kitco Inc. All rights reserved - Don't be a wuss, AG. Drop 'em low! Drop 'em now!
-EJ
U.S. lawmaker calls for 'significant' Fed rate cut
WASHINGTON, Sept 28 ( Reuters ) - The head of Congress' Joint Economic Committee on Monday urged the Federal Reserve to cut U.S. interest rates substantially to help calm tumultuous world financial markets.
``The Fed should cut interest rates immediately,'' committee Chairman Jim Saxton, a Republican from New Jersey, said in a statement. ``There is no evidence of inflation now, and no evidence of future inflation in the pipeline. A significant interest rate cut would also be an important act of U.S. leadership in stabilizing international financial markets.''
- Date: Mon Sep 28 1998 13:41
LGB (@ JTF...Harmony) ID#269409: - You talked me into it JTF. Just bought a couple thousand shares of Drooy AND Harmony ( if my Ameritrade orders get filled anyway ) ...my first Gold shares since Homestake in the Eighties.
Now if it turns out to be a bad gamble and goes south...I intend to hold the FED and Merril Lynch personally responsible and I'll expect a bail out check! - Date: Mon Sep 28 1998 13:40
EJ (EMERGING MARKETS -Ten days that calmed the world?) ID#229207:
Copyright © 1998 EJ/Kitco Inc. All rights reserved - He said the risk of global deflation is far greater than the expected tinkering over the next couple of weeks is likely to address.
By Mike Dolan
LONDON, Sept 28 ( Reuters ) - The next ten days could be crucial to deciding how much further the pervasive contagion of emerging market crises has left to run, economists said.
The Federal Reserve meets Tuesday, Brazil holds elections on Sunday and the world's financial leaders prepare for almost a week of meetings at and on the fringes of the International Monetary Fund's ( IMF ) annual gathering in Washington.
All these events are expected by analysts to have some calming influence on troubled markets, but they said investors scarred by more than a year of false dawns will probably want a lot more than they're likely to get.
``Two weeks ahead things will probably be more positive than negative -- a good result out of Brazil, recognition from the international community of the risks going forward and a U.S. rate cut,'' said Charles Blitzer, chief emerging markets economist at Donaldson, Lufkin & Jenrette.
``That said, I don't see this as the fundamental turning point yet.''
After 15 months of seemingly endless currency devaluations and stock market crashes from Asia to Latin America, world leaders have seen the volatility seep into the world's biggest economies and are attempting to draw a line in the sand.
Stopping the rot at Brazil has become paramount.
The ability to deal with the dire debt financing problems and severe fiscal challenges there hinges on an expected victory for President Henrique Cardoso in Sunday's first round election.
If he's forced to a second poll, three more weeks of uncertainty will loom and that may simply be too late for jittery capital already draining out of the country's assets.
A necessary though not sufficient backdrop to any solution there, however, is lower Fed interest rates. A U.S. rate cut is needed to at least begin to offset fears of a global credit crunch and sharply slowing world growth.
Growing concerns about the exposure of U.S. banks to asset price collapses, ailing hedge funds and the risks of both corporate and sovereign debt default has already sent a chill through the corridors of power in Washington.
Many analysts feel a rate cut of more than a quarter percentage point may be necessary to have the desired effect.
``The Fed probably will cut rates and that will make it easier. But I still think we're in for a very rough ride going forward,'' said Paul MacNamara, emerging markets economist at Bank Julius Baer.
He said the risk of global deflation is far greater than the expected tinkering over the next couple of weeks is likely to address.
The finance ministers from the Group of Seven ( G7 ) industrialised nations meet on Saturday.
The official IMF meeting starts the following Tuesday and runs to October 8. It is expected to include meetings of finance officials from the G22, which consists of the major industrialised nations and the larger developing countries.
A major package of international funds to help Brazil with its short-term financing is now widely expected to be agreed under the auspices of the existing IMF but heavily financed by the governments of the G7 nations.
``For Brazil's and Latin America's problems to be addressed, there needs to be a massive tightening of domestic policy, some form of injection of official sector finance and a fall of real U.S. interest rates,'' said David Lubin, economist at HSBC.
``Decisions on all three will be made over the next two weeks but it's still far from clear whether it will be enough to stabilise markets,'' he said.
``This can only be the turning point if there are paradigm shifting decisions taken on all of these three issues. Muddling through is not an option.''
The G7 and G22 meetings, meantime, are also expected to discuss proposals about changes to the way the IMF deals with financial crises in the future.
These are expected to lead to at least some changes to what's now become known as the ``global financial architecture.''
But, again, confidence is low that really fundamental shifts in structure will be announced.
``I would be extremely surprised if there were any bold new moves coming out of Washington's meetings,'' said Blitzer at DLJ. ``Expect modest initiatives and a lot of hand wringing.''
- Date: Mon Sep 28 1998 13:29
Allen(USA) (Loral Stock Certificate Recipe) ID#246224: - Wash. Shred certificates evenly. Toss till fluffy. A fine vinegar/oil dressing is suggested for this delicate salad.
- Date: Mon Sep 28 1998 13:26
EJ (Every high-tech company I've every worked at) ID#229207: - You sell every $ of vested stock options allowed no matter what the market price if it's more than what you paid for them. A bird in hand...
-EJ - Date: Mon Sep 28 1998 13:25
Allen(USA) (sweat) ID#246224: - No embarasement intended, fella. How did they taste? A little boney?
- Date: Mon Sep 28 1998 13:23
EJ (Gollum) ID#229207: - Geez. Looks like we're not even going to make it to tomorrow pm. Time for big money to abort the lull them in strategy and go for a sneak away with whatch got strategy?
-EJ - Date: Mon Sep 28 1998 13:22
Allen(USA) (Who Cares) ID#246224: - Regardless of MSFT corp's cash position, Bill's sale was of his own personal stock holdings. I suppose $2.5 BILLION would let Bill 'operate' for a good long time regardless of what happened to MSFT.
- Date: Mon Sep 28 1998 13:21
sweat (Allen) ID#28767: - that was my wife
- Date: Mon Sep 28 1998 13:18
Dabchick (Silver Lease Rates) ID#258195:
Copyright © 1998 Dabchick/Kitco Inc. All rights reserved - Here are the Silver Lease Rates for the last two weeks as calculated by subtracting the Silver Lending Rates from the LIBOR interest rates.
LIBOR is as at London Close. Silver Lending Rate figures are as supplied daily to the Financial Times by NM Rothschild.
Date------------------Sept--|--14--|--15--|--16--|---17--|--18--|--21--|--22--|--23--|--24---|--25--|
1-mo LIBOR---------------|-5.59-|-5.59-|-5.59-|-5.59-|-5.59-|-5.59-|-5.59-|-5.59-|-5.53-|-5.37-|
1-mo Silver Lending Rate|-3.50-|-3.50-|-3.60-|-3.75-|-3.85-|-3.85-|-3.90-|-3.75-|-3.75-|-3.60-|
1-mo Silver Lease Rate---|-2.09-|-2.09-|-1.99-|-1.84-|-1.74-|-1.74-|-1.69-|-1.84-|-1.84-|-1.99-|
Date------------------Sept--|--14--|--15--|--16--|---17--|--18--|--21--|--22--|--23--|--24---|--25--|
3-mo LIBOR---------------|-5.50-|-5.50-|-5.50-|-5.50-|-5.50-|-5.50-|-5.50-|-5.50-|-5.44-|-5.31-|
3-mo Silver Lending Rate|-2.50-|-2.50-|-2.60-|-2.80-|-2,85-|-2.85-|-2.95-|-2.85-|-2.75-|-2.70-|
3-mo Silver Lease Rate---|-3.00-|-3.00-|-2.90-|-2.70-|-2.65-|-2.65-|-2.55-|-2.65-|-2.69-|-2.61-|
Date------------------Sept--|--14--|--15--|--16--|---17--|--18--|--21--|--22--|--23--|--24---|--25--|
6-mo LIBOR---------------|-5.41-|-5.41-|-5.41-|-5.41-|-5.41-|-5.41-|-5.41-|-5.41-|-5.34-|-5.25-|
6-mo Silver Lending Rate|-1.75-|-1.75-|-1.80-|-2.00-|-2.00-|-2.00-|-2.05-|-2.05-|-2.15-|-2.15-|
6-mo Silver Lease Rate---|-3.66-|-3.66-|-3.61-|-3.41-|-3.41-|-3.40-|-3.36-|-3.36-|-3.19-|-3.10-|
Date-------------------Sept--|--14--|--15--|--16--|---17--|--18--|--21--|--22--|--23--|--24---|--25--|
12-mo LIBOR---------------|-5.25-|-5.25-|-5.25-|-5.28-|-5.28-|-5.25-|-5.25-|-5.25-|-5.16-|-5.06-|
12-mo Silver Lending Rate|-1.50-|-1.50-|-1.75-|-1.90-|-1.90-|-1.90-|-1.90-|-1.95-|-1.90-|-1.90-|
12-mo Silver Lease Rate---|-3.75-|-3.75-|-3.50-|-3.38-|-3.38-|-3.35-|-3.30-|-3.30-|-3.26-|-3.16-|
- Date: Mon Sep 28 1998 13:16
Allen(USA) (Y2K preparedness recipes) ID#246224:
Copyright © 1998 Allen(USA)/Kitco Inc. All rights reserved - As most here know, I advocate Y2K preparedness. To wit the following recipe, inspired by recent observation of young mother greedily sorting through a box of 'Beanie Babies' at a small retail shop.
( Note: this recipe will come in handy if TSHTF and you happen to have spent your time and money on beanie babies rather than food. )
Beanie Baby Barbaque
5 Beanie Babies ( mix color for good presentation, avoid color clashing though )
1/2 cup moldy bread, dried
1 cup ketsup
1 Tbl tabasco sause
1 tsp salt
Sause: crumble bread to fine powder, add other ingredients, stir till blended. Add water to make sause somewhat liquid, smooth flowing.
Soak Babies in sause for 1 hour while trying to find some dry wood for the fire.
After fire is well heated, place Babies on old aluminum window screen, then place screen over fire. Try not to lay the screen IN the fire. Use rocks to keep if above the coals somewhat.
Turn Babies for even cooking. Apply remainder of sause to keep Babies moist.
When done, arrange on cardboard plate with garnish of colorful fall leaves.
Bon Apetit! - Date: Mon Sep 28 1998 13:05
moa (JTF...goldman bailing out) ID#269128: - yes that would be very negative if they threw a party and nobody came...better to have a quiet night in and count their gold.
- Date: Mon Sep 28 1998 13:02
Who Cares? (Gates - $2.5 Billion) ID#242328: -
I don't respect Gates' business practices, but I do respect his
attitude. Microsoft has been carrying several billion in CASH for
several years now. Last time I saw anything about it, it was up
to $9B.
In other words, Gates has been ready for the Crash since at
least 1993. I imagine that he could run Microsoft with virtually
no revenues for at least a year. : )
- Date: Mon Sep 28 1998 13:00
LGB (Gold to rise shortly) ID#269409:
Copyright © 1998 LGB/Kitco Inc. All rights reserved - Now HEREs a good reason for Gold to rise modestly in near time. Rubin's policy of allowing / sediring weakening dollar, coupled with pending FED rate cut will do the trick..to the tune of a few bucks. I'm getting some DROOY! ( OK STUDIO.R.....I'll look more closely at JD's Harmony... )
Monday September 28, 12:31 pm Eastern Time
Note: this article has a followup with more information.
Rubin talk sends dollar/yen lower at U.S. midday
NEW YORK, Sept 28 ( Reuters ) - The dollar eased at midday in New York Monday after Treasury
Secretary Robert Rubin expressed concerns about the weak Japanese yen, and in anticipation of Tuesday's
U.S. interest rate-setting meeting, dealers said.
Traders said Rubin's reiteration that the United States was still worried about the weak yen and that U.S.
dollar policy stayed unchanged sent dollar/yen lower.
``You have a very easy reason to sell'' dollar/yen, said Tom Benfer, a director of foreign exchange at Bank of Montreal. `` ( Rubin ) has put
some downward pressure on it, no question about that.''
At noon, dollar/yen was down at 135.62/72 from an opening level of 136.30/40 and dollar/mark was off at 1.6770/80 from 1.6815/25 at the
open.
Rubin said Washington's dollar policy remained unchanged and reiterated the U.S. administration's concern over the weak Japanese yen.
Our dollar policy remains the same, he said in Washington.
``As we've said over the course of the last couple of years now a great concern of ours and one we share with the Japanese government is the
weakness of the Japanese yen.''
However, dealers said trade was lackluster as markets focused on the meeting of the rate-setting Federal Open Market Committee on Tuesday
slated to begin at 0915 EDT/1315 GMT. Results of the meeting are scheduled to be announced around 1415 EDT/1815 GMT.
``I don't anticipate any big movements'' before the Fed announcement, said David Gilmore, a partner at Foreign Exchange Analytics in
Essex, Conn.
``It will probably be quiet until 2:15 tomorrow.''
He added markets had already priced in a federal funds rate cut of 25 basis points from the current rate of 5.50 percent. - Date: Mon Sep 28 1998 12:58
Allen(USA) (Ravenfire@Microsoft) ID#246224: - Latest filings of insider trading detail that Bill Gates SOLD $2.3 BILLION of his personal holdings in Microsoft. Also Paul Allen SOLD $1.5 BILLION, same.
Something about rats and sinking ships comes to mind .. - Date: Mon Sep 28 1998 12:58
moa (new house of paper being built....read carefully.) ID#269128:
Copyright © 1998 moa/Kitco Inc. All rights reserved - ..In another possible move to get Japan's battered economy back on track, a major local news agency reported
the Japanese government was considering lending some of its government-held U.S. Treasury bonds to
Japanese banks as an emergency measure to help them raise dollars.
Kyodo News Service, quoting ``government sources,'' said that under the plan, Japanese banks would borrow
U.S. Treasury bonds held by the Japan government -- at low interest rates and without collateral -- to get
dollar loans from foreign banks by using the bonds as collateral. .....
This must surely be where this is all headed. They are telling the Japanese to use US debt as collateral for more debt.
Is there not a law against this....conceivably this could go on ad infinitum, perhaps it's a cross border loophole in this debt. mongery laws that fed is trying to exploit to keep the game going...surely there is one congressman with enough clues to see through this sham....? or is there?
- Date: Mon Sep 28 1998 12:57
Gollum (DOW +87 GCZ8 296.3 SIZ8 5.195) ID#35571: - Market continues to weaken. Gold and silver stocks up. Bonds down.
As LGB notes, broad market appears stronger, but . . .
Big money say otherwise. - Date: Mon Sep 28 1998 12:56
JTF (Error in last post) ID#254321: - Sorry -- meant 500:1 margin.
- Date: Mon Sep 28 1998 12:55
STUDIO.R (@LGB.O.........) ID#119358: - Re Drooy.....accumulation well under way, no doubt. BUT......
If but one NY house picks up on HGMCY...it will explode. What reserves!, what management!, what cost of production!......and what a melodius name. IMVVVHO..., I read all the shareholder mailings......they're the top of the RSA's. LOrd Disney is sho' right on this one. - Date: Mon Sep 28 1998 12:54
Preacher (JTF & PAASF) ID#227290: - JTF,
Despite the fact that PAASF has a good mine in Peru and an up and coming mine in Mexico, the fact remains that its biggest project is in Russia. This compamy has a huge market cap and I think the market is writing down its Russian property. So its price is coming more in line with its assets ex-Russia.
The Preacher - Date: Mon Sep 28 1998 12:53
JTF (LTCM, with 1.25 trillion at risk) ID#254321:
Copyright © 1998 JTF/Kitco Inc. All rights reserved - Max Moseley: What do your sources say about how much LTCM got in trouble for? The New York Times article apparentely refers to $125 billion on borrow securities bought with capital of $2.2 billion. If the above is true, no wonder they got in trouble -- 50:1 margin!
If true, just think how confident they must have been to try a stunt like that!
Any idea how long they we in trouble before they called for help?
I wonder -- if LTCM did this, how many others have been leveraging up their assets with borrowed treasuries? Works fine as long as the currency trends do not shift unexpectedly.
With regard to interest rates, have you noticed that short term FED rates have dropped already? Perhaps the FED is trouble controlling short term rates now, as well as long term ones.
Wonder how long it will be before Brazil finds out that the Calvary is not coming. ( Unless the IMF members vote to sell what gold they have lef ) . We now have a new German leader -- don't know what he would do, but we do know what their Bundesbank director Tietmeyer would say.
Interesting times, aren't they, and y2k is still more than a year away.
- Date: Mon Sep 28 1998 12:51
LGB (@ David Blair Macrory) ID#269409:
Copyright © 1998 LGB/Kitco Inc. All rights reserved - And the freedom-loving nations of the world will agree to a new
international monetary sytem which all races, ethnic groups,
and ideologies ..... will willingly trust and use:
an international money & credit system backed by, and convertible to
gold.
Sincerely,
David Blair Macrory
LGB comment: He forgot to mention that the lamb will lay down with the lion, we will beat our swords into plowshares, and study war no more. Harmony, justice and rightousness will be the order of the day, and
man will no longer be a fallen sinful creature. Uh huh.......
- Date: Mon Sep 28 1998 12:51
Gollum (@LGB) ID#35571: - Just keep watchin...
- Date: Mon Sep 28 1998 12:50
goldfevr (what if no-one bails out the 'bailers'....?) ID#434108:
Copyright © 1998 goldfevr/Kitco Inc. All rights reserved - ( from CNNfn: ) 9/25/98
Lenders mull Latin bailout
IMF, World Bank consider plan to
stabilize Brazil using private investments
September 25, 1998: 8:14 a.m. ET
Latin markets
badly bruised -
Sept. 17, 1998
Latin America
next? - Sept. 3,
1998
Brazil stock
exchange
World Stock
Markets
NEW YORK ( CNNfn ) - Multilateral lending
institutions apparently are considering a plan to
better insulate Latin American markets from the
Asian financial crisis - using private investors to
pave the path to recovery.
Under the proposal, one of several being
considered, the Wall Street Journal reports that
Latin American governments would issue new
bonds partially backed by guarantees from the
World Bank and the Inter-American
Development Bank.
While the plan would not entirely be risk-free
for lending agencies, the guaranteed bonds would
encourage private investors to step in and fund a
bailout of the ailing region.
In exchange for the guarantees, the Latin
American countries reportedly would have to
implement economic reforms. The question is,
would those reforms come soon enough?
Brazil, battered by emerging-market volatility
and an overinflated budget deficit, is badly in need
of reforms. Earlier this month, the country's
central bank raised interest rates to nearly 50
percent in a bid to plug massive dollar outflows
from its financial markets.
Meanwhile, the International Monetary Fund is
continuing its talks with Brazil about other, more
traditional financial-rescue packages.
Although no specifics have been released, the
IMF, IDB and World Bank are able to pull
together up to $30 billion for a bailout package if
needed. An additional $20 billion could be raised
from private lenders and other sources, according
to the report.
Lending agencies fear that a collapse of Brazil,
Latin America's hotbed of economic activity,
could trigger a series of market collapses
throughout Latin America.
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ALL RIGHTS RESERVED.
- Date: Mon Sep 28 1998 12:43
BillD (The XAU and NEM taking off) ID#258427: - Even before Gold turns positive...seen this before...lookout above for PM shares...and POG
- Date: Mon Sep 28 1998 12:41
LGB (@ JTF...SSC / PAASF) ID#269409:
Copyright © 1998 LGB/Kitco Inc. All rights reserved - Yes, it's puzzling. Everyone keeps telling me that PAASF and SSRIF are much better silver plays, and certainly the research numbers bear that out as far as mine profitiability, reserves, cost per oz. etc...
But I don't mess with these smaller issues strictly because the broad well established market players go to SSC first and foremost when silver starts to rise. As the NA Blue chip I think it's a better play. Particularly since I try and trade it frequently, and can get the volume I need to make small trades 1/8 spread trades of 10,000 shares or so. Tough to do with the smaller cap, smaller volume mining shares.
I do however have a core position in SSC at 3/4 that I don't intend to sell anytime soon. $3.00 shares on the horizon.
Now I have to decide whether to make my first foray onto the DROOY bandwagon. Pretty good move up in those shares in the past few weeks if you baought below 2.00 - Date: Mon Sep 28 1998 12:40
goldfevr (Who will bail-out the 'bailers', & with what?) ID#434108:
Copyright © 1998 goldfevr/Kitco Inc. All rights reserved - Xau up 4+%, with gold up $+.10 ( cents ) :
gold-mining stocks again leading the next advance in gold,
which will take it thru the $300.00 barrier.
XAU's next near-term target is '80'.
Date: Fri Sep 25 1998 10:25
goldfevr ( LIFTOFF - Gold's Bull Market at lift-off . ) ID#434108:
Copyright © 1998 goldfevr/Kitco Inc. All rights reserved
With the XAU up more than 50% from its August lows, the new bull
market chapter in gold is just beginning.
My Sept. 4th & 5th kitco posts ( re-copied below )
identified that time as the ignition stage,
of this new bull market --
...the horses are out the starting gate...
...the market in gold... is improving, and will become brisk
as autumn unfolds...
The sunami tidal-wave that will hit US shores - that I
referred to in my 9/4/98 post, is going to be an
investment & financial & MONETARY panic.
Hints of this, are beginning to become apparent with
the hedge fund & derivates debacle; but we've only seen
the tip of the iceberg, in this unfolding, unstoppable crisis.
Growing fear is the seed-bed for the coming
collapse of confidence, in both Europe and the U.S. --
paper currencies & artificial credit are about to be totally
repudiated, and ultimately replaced, over the next few years.
It is simply the natural order of things.....returning.
For every action, there is an opposite and equal reaction.
Mirroring the world-wide meltdown in paper money
& imploding debt,
is the newly born bull market in gold.
When the dust settles in this collapsing, inverted pyramid
of paper monies, and defaulting debt,
and make-believe derivative schemes,
the world-economy will dig in the rubble
of its own ashes of folly and excess,
and it will find gold.
And the freedom-loving nations of the world will agree to a new
international monetary sytem
which all races, ethnic groups,
and ideologies ..... will willingly trust and use:
an international money & credit system backed by,
and convertible to
gold.
Sincerely,
David Blair Macrory
goldfever@k-online.com
Date: Sat Sep 05 1998 20:00
goldfevr ( Economic Winter........and the warming trend of gold. )
ID#434108:
Copyright © 1998 goldfevr/Kitco Inc. All rights reserved
Sept. 3rd & 4th's accelerating share prices in mining stocks,
on 3 to 5 times average daily volume, set's the stage.....
the fuse is lit....
the horses are out of the starting gate....
( for real.....this time......no more false starts )
hold on for the ride,
it's gonna be one hel-of-a race.
Date: Fri Sep 04 1998 11:07
goldfevr ( 'Economic Winter' - approaching.... ) ID#434108:
Copyright © 1998 goldfevr/Kitco Inc. All rights reserved
The market in golden overcoats ... is improving.....
and will become 'brisk'....
as autumn unfolds.
...................................
deja vu --
from 9/27/97, kitco post:
When the tent collapses,
it will not be the center-post that goes first;
but the side-posts ...
and even the stakes.
............................................
for another perspective:
The 'Titanic' IS sinking ....
no matter the wishful thinking and the denial
of the blind leading the blind...
( as they mostly ignore the 'golden overcoats' & the
'gold-lifeboats' )
Pride goeth before the fall... --
'Just how long did civilization,
believe it could get away with it:
creating a global economy....
based on paper currencies & artificial credit
created by the trillions...... out of thin-air?'
It is not nice to fool mother-nature....
especially when it takes the form of --
'mass-counterfeiting'....
by the international collective of
political & financial leaders & experts,
and their corrupted institutions.
A few 'gold-lifeboats' ...
are beginning to be set-out ... upon -
the stormy, trecherous, world-wide seas of:
red-ink,
crashing-currencies, and
imploding-debt....
but by only by a few, informed, hearty, freedom-loving,
visionary souls.
Meanwhile, a few of them have reported that -
'a sunami - tidal-wave'
is approaching U.S. shores.
- Date: Mon Sep 28 1998 12:40
lady_bug (hey, CC) ID#320202: - look at standard silver nd tell me I am not dreaming S
goint to do some surfing now
l_b - Date: Mon Sep 28 1998 12:36
JTF (Goldman, Sachs) ID#254321: - moa: Think they have some derivatives loss, too? Perhaps they are just worried about the markets in general. I would -- not a good time to go public, unless you simply want to fleece the buyers. Even worse if you put it on the table for sale, and no one buys.
- Date: Mon Sep 28 1998 12:35
LGB (@ Gollum...what market you talkin about?) ID#269409:
Copyright © 1998 LGB/Kitco Inc. All rights reserved - Market rapidly weakening? Big money doesn't want to stick around? What market you talking about? The NYSE has some of the healthiest numbers I've seen in weeks.
New highs to new lows ratio improving drastically multiple hundreds of percent over what it's been running for weeks now. Up volume roughly double down volume. Ditto number of stocks advancing vs. declining. And this across the broad market on all three exchanges.
You must be thinking of the GOLD market if you're talking about weakening Gollum. U.S. stocks are looking healthier than they have in several weeks. Since before the big correction in fact.
Date: Mon Sep 28 1998 12:20
Gollum ( DOW +101 ) ID#43185:
Market weakening rapidly. Bonds continue to weaken. Big money definitely does not want to stick around, despite the much
ballyhooed rate cut. - Date: Mon Sep 28 1998 12:33
Max_Moseley (@The Skeptical Investor) ID#270221: - All: re LTCM They lost most of their money
on going long Gilts while being short Treasuries. ( Joey two-cents 11.35 ) . That means they bet that UK interest rates had peaked, and US rates were going to go up. If Joey's information is correct, then a substantive decrease in US rates by the FOMC this week will presumably put LTCM even further into the hole. That argues against a decrease. Max - Date: Mon Sep 28 1998 12:33
JTF (Silver) ID#254321: - LGB: SSC does seem to be moving. Why is PAASF in the dumps? I thought PAASF was a star silver producer, with mines in low cost countries such as Mexico.
- Date: Mon Sep 28 1998 12:33
BillD (MR. KITCO...BART) ID#258427: - Things seem to be heating up...could you please JIGGLE THE FRAMES, TIA
- Date: Mon Sep 28 1998 12:30
kuston (D.A. - you still around here?) ID#273227: - D.A. - Are you still around? If you are - do you have any thoughts on silver these days? BBL.
- Date: Mon Sep 28 1998 12:30
moa (Greenspan's grasp of derivatives risk is questioned...) ID#269128:
Copyright © 1998 moa/Kitco Inc. All rights reserved - Sunday September 27 7:26 AM EDT
Fed's Role In Hedge Fund Oversight Questioned
By Joanne Morrison
WASHINGTON ( Reuters ) - The Federal Reserve may not be doing enough to make sure that U.S. financial
institutions are operating safely when they make loans and investments in hedge funds, a key lawmaker says.
``If they are looking at it, then there must be more thorough disclosure of the risk associated with these
investments,'' Rep. Richard Baker, a Louisiana Republican who chairs the House Capital Markets
subcommittee, said Friday.
Baker's concerns came week after Federal Reserve Chairman Alan Greenspan told the lawmakers that hedge
funds do not pose an overall risk to world financial markets.
Only days later, Greenspan's comments were followed by news that the Federal Reserve Bank of New York
was forced to step in and organize a $3.5 billion bailout of Long-Term Capital Management in order to avoid
huge systemic market losses.
``I think the unfortunate news is Long-Term Capital has proven that not to be true,'' Baker said of
Greenspan's earlier assurances.
http://dailynews.yahoo.com/headlines/bs/story.html?s=v/nm/19980927/bs/longterm_5.html - Date: Mon Sep 28 1998 12:28
moa ($16 bill just disappeared in Japan....is that a lot money?) ID#269128:
Copyright © 1998 moa/Kitco Inc. All rights reserved -
Monday September 28 6:48 AM EDT
Record Japan Bankruptcy Comes With Political Deal
By Brian Williams
TOKYO ( Reuters ) - Japan's biggest bankruptcy was filed Sunday in a move coinciding with agreement on
legislation that may open the way for the world's second-largest economy to deal with its worst recession
since World War II.
Authoritative sources said that Japan Leasing Corporation filed for bankruptcy totaling 2.2 trillion yen ( $16.1
billion ) .
At the same time, Prime Minister Keizo Obuchi agreed with opposition parties on legislation on how to use
public money for failed financial institutions.
The sources said Japan Leasing Corporation's filing was the biggest bankruptcy, overtaking the previous
record of last November's two trillion yen financial collapse of Yamaichi Securities.
Japan Leasing Corporation, established in 1963 with a staff of 1,300, had major loans outstanding on
agricultural-type leases, one of the country's most vulnerable sectors. The leases covered aircraft, ships, farm
equipment and land.
http://dailynews.yahoo.com/headlines/bs/story.html?s=v/nm/19980928/bs/japan_1.html - Date: Mon Sep 28 1998 12:26
moa (Goldman opting out of the casino...) ID#269128:
Copyright © 1998 moa/Kitco Inc. All rights reserved -
Monday September 28 8:30 AM EDT
Goldman, Sachs May Delay IPO
NEW YORK ( AP ) - Goldman, Sachs & Company may postpone its initial public stock offering because of
turmoil in financial markets around the world, according to published reports.
The New York Times and The Wall Street Journal reported that the investment bank's partners are expected
to meet today to formally decide whether to delay plans to sell shares in its now private partnership.
A postponement would not be a surprise, given the sharp stock market slide since Goldman first announced its
plans for the IPO last June.
Goldman plans were to sell a 10 percent to 15 percent stake to the public that would value the company at
about $30 billion. But some concern has been raised by people outside the company about whether the current
conditions would dampen interest in the offering and drag down the sale price.
Last week, Goldman reported a 19 percent drop in profit for its fiscal third quarter and warned of more bad
news as the ongoing upheaval in global financial markets.
Stock in many of Goldman's publicly-traded peers, including Merrill Lynch & Co. and Lehman Brothers
Holdings Inc., are off more than 50 percent from their peaks earlier this year.
The Times, citing sources who work at Goldman, said that the firm's six-person executive committee has
decided to delay the IPO, and will speak today with the company's 189 general partners.
If the partnership agrees to postpone the IPO, a general announcement could come on Tuesday, the Times
said.
A spokesman for Goldman did not immediately return a phone call for comment.
http://dailynews.yahoo.com/headlines/ap/financial/story.html?s=v/ap/980928/financial/stories/goldman_sachs_ipo_1.html - Date: Mon Sep 28 1998 12:24
Highhopes (Rep. Jim Saxton & the IMF) ID#404410:
Copyright © 1998 Highhopes/Kitco Inc. All rights reserved - From WSJ today: Rep. Jim Saxton scoffs at giving the IMF more money; he calculates that they still have $87 billion to throw at the global financial crisis.
Here is how he comes up with this no.: By draining reserves, SELLING SOME OF ITS ( IMF ) 103 MILLION OUNCES OF GOLD and even tapping private capital markets with some sort of bond issue, the IMF could generate a lot of lendable money. - From Wall Street Journal. Sept. 28, 1998, front page.
If I could just overcome fear of IMF gold sales, I could become a lot more bullish. This is my only fear regarding gold. Can anyone allay my fears?
Highhopes - Date: Mon Sep 28 1998 12:24
LGB (Silver / SSC) ID#269409: - SSC is moving up nicely on unusually high volume. Already 3/4 million shares have traded, much higher than normal. Going to add to my position today if I can get a buy at 7/8.
Apparently some inside players expect silver to go substantially higher soon....... - Date: Mon Sep 28 1998 12:23
korondy (Something's Afoot) ID#222186: - All major currencies ( yes, even the Canadian $ ) have started to rally against the US$ at 10:30 EDT. Check out DM8Z, JY8Z, BP8Z, and especially SF8Z. Any news out there that could have impacted the US$?
- Date: Mon Sep 28 1998 12:20
Gollum (DOW +101) ID#43185: - Market weakening rapidly. Bonds continue to weaken. Big money definitely does not want to stick around, despite the much ballyhooed rate cut.
- Date: Mon Sep 28 1998 12:20
PMF (Senior Golds moving nicely) ID#224363: - ABX and PDG moving quite nicely now. Very fast turn around about 45 minutes ago and still moving up.
- Date: Mon Sep 28 1998 12:15
ravenfire (I had no idea Microsoft's fundamentals were this ... hmm ... interesting) ID#333126: - http://www.techweb.com/se/directlink.cgi?WIN19981001S0001
scroll down to part 3 )
MSFT is now 1st in market capitalisation ( it beat GE not long ago ) but is 400th in revenue size
hmmmm...........
even so, MSFT shorters have been wrong so far...
Microsoft, Inktomi, Yahoo, Amazon.com -- when's the bubble popping? - Date: Mon Sep 28 1998 12:14
Gollum (GCZ8 295.4 SIZ8 5.190) ID#43185: - London market now closed. Gold holding steady. Silver moves up.
- Date: Mon Sep 28 1998 12:10
Gollum (DOW +106) ID#43185: - Still no sign of the morning day traders getting out, so I suspect we'll see something of a sell off late in the day.
- Date: Mon Sep 28 1998 12:08
lady_bug (Lease rates) ID#320202: - one month lease rates, as implied by London Bullion Markets Association members, increased 130 basis points to 1.70 %
http://biz.yahoo.com/rf/980925/w2.html
missing link told us about it on saturday afternoon, don,t know what it is today, hope this helps
l_b - Date: Mon Sep 28 1998 12:07
crazytimes (@ freasybery) ID#344326: - I second the motion. I hope someone can post the one month lease rates. I have a post over on Silicon Investor asking Bill Murphy if he can keep us updated. No answer as of yet.
- Date: Mon Sep 28 1998 12:04
korondy (Dow looks weak) ID#222186: - When SP8Z is selling at a premium of 1100, or $2.00 over fair value of $9.00, and the market does not move, it bodes poorly fo rthe Dow. The Dow is struggling with 8150.
- Date: Mon Sep 28 1998 12:01
Freasyberry (Gold Lease Rate Today ?) ID#331387: - Someone be so kind as to post the current 1 month rate pretty please.
- Date: Mon Sep 28 1998 11:59
chas (Cage Rattler @ 11:32) ID#147201: - Thanx a bunch for this reference. This could help us. Charlie
- Date: Mon Sep 28 1998 11:59
EJ (TYoung ) ID#229207: - +300 is a rally. +100 is tepid interest. This is a skittish bull fighting this growling bear. Lull them in, but don't risk too much to do it. Stand back. Anything could happen...
-EJ - Date: Mon Sep 28 1998 11:52
Gollum (@TYoung ) ID#43185: - The only reason the market is hanging around is to see what happens Tuesday.
Time to get a few last metal purchases in. - Date: Mon Sep 28 1998 11:50
Gollum (DOW +110) ID#43185: - Bond market is down, portents of big money starting to leave?
Dollar down - - still anticipating rate cut
oil down - - anticipating economic slowdown?
market up - - waiting for the rate cut
metals mixed - - only minutes til London close. Silver looking good. - Date: Mon Sep 28 1998 11:50
TYoung (Stock market rally....) ID#317193: - If this is called a rally in Dow/Nas. then sell and run. Does not look that strong...at least to me. This market needs a push.
Tom - Date: Mon Sep 28 1998 11:38
korondy (bridge: HUI vs. XAU) ID#222186:
Copyright © 1998 korondy/Kitco Inc. All rights reserved - The XAU was the first index of gold mining companies. It is dominated by ABX - Barrick Gold Corp. and represents the largest producers. The AMEX has a site that describes the components.
The BUGS ( Basket of Unhedged Gold Shares ) , symbol HUI.X, came later. Demand was seen for a pure gold play. HUI originally was comprised of gold mining companies that did not hedge ( sell forward ) their future production. This is no longer the case, since Homestake Mining Co. ( NYSE:HM ) has announced plans a month ago to hedge up to 30% of their future production. Info on the HUI can also be found, just search for it. - Date: Mon Sep 28 1998 11:35
joey two-cents ((Goldy 88(LTCM))) ID#254187: - My friend works at LTCM I asked him about the rumour of them being short gold and he said they don't hold and never had held any gold positions short or long. They lost most of their money on going long Gilts while being short Treasuries.
- Date: Mon Sep 28 1998 11:32
Cage Rattler (Major World Mints and Distributor Contacts ) ID#33184: - http://www.csmonline.com/coinworld/buysell/foreign.html
- Date: Mon Sep 28 1998 11:27
zeke (GGO & CDE) ID#25257: - Getchell Gold really jumping again this A.M. Does anyone know if this is a favored institutional issue? CDE also moving in sync with Silver.
- Date: Mon Sep 28 1998 11:26
dung beetle (There's Hope For Us All Yet...) ID#272234: - http://biz.yahoo.com/rf/980925/w2.html
- Date: Mon Sep 28 1998 11:24
chas (John Disney re SA Mint) ID#147201: - Can you hook me up with the South African Mint? An email or URL. Many thanx, Charlie
- Date: Mon Sep 28 1998 11:24
bridge (HUI Index?) ID#262351: - Will someone please explain the difference between the xau and the hui indexes? Thanks
- Date: Mon Sep 28 1998 11:21
SEQUIN (@ goldy88) ID#25171: - I know without any doubt that LTCM's GOLD position was not mentioned during last thursday's meeting at the FED N.Y. branch as a significant loosing or dangerous position.
Only stocks derivatives , bond arb and morgage backed securities were mentioned.
Now , it is your analysis to determine wether there is really no position or if it was just not mentioned.
I hold this information from one of the 2 guys who attended the meeting for my bank.
- Date: Mon Sep 28 1998 11:17
LGB (@ LTCM..Gold shorts?) ID#269409: - They couldn't have had a short position on Gold. After all...they were taking virtually every position that was the OPPOSITE of what they should have been, over the past 2 years, given market conditions. Big short position in Treasury's, big long position in overseas junk bonds, and emerging market securities, etc.
If they had shorted Gold, it would've been an in the money position eh? Maybe they were LONG Gold?
- Date: Mon Sep 28 1998 10:59
goldy88 (LTCM&GOLD) ID#42039: - TO ALL: anybody knows if ( without any doubt ) LTCM had short position in gold? ( sources and links welcome ) .
Thanks - Date: Mon Sep 28 1998 10:52
EJ (Market Update BS from quote.com) ID#229207:
Copyright © 1998 EJ/Kitco Inc. All rights reserved - The DJIA ( sm ) jumped ahead 100 points at the opening bell this morning as attention focuses on tomorrow's Fed meeting. Most major overseas markets are trading 1%-3% higher on news that Japan is making progress on banking reform ( 1 ) and reports that the flight of dollars from Brazil has slowed significantly and the situation is starting to stabilize ( 2 ) . Analysts expect the markets to trade higher today as investors continue to factor in the effects of a rate cut ( 3 ) .
( 1 ) The 1% - 3% gaims had nothing to do with optimism about the latest Japanese fix-up plan. The Japanese and HK governments paid big $ for those gains.
( 2 ) That's not what my friends in Brazil are telling me. The future depends 100% on the US continuing to grow as a market for Brazilian goods and as an investor in Brazil. Both are unlikely.
( 3 ) No. Investors have arleady factored in the rate cut.
-EJ - Date: Mon Sep 28 1998 10:47
Reify (Hang in there, and watch) ID#413109:
Copyright © 1998 Reify/Kitco Inc. All rights reserved - Some interesting things are going on.
SWC the little platinum thingy, is acting kinda strong, this
while Pl is acting kinda weak. Hitchhiking on to what Mike
Sheller said before, about the market makers shaking out the
last weak holders who have put stops in the right places, and
then the price goes back into a pattern, from whence it came, like
gold recently did, and that people, is bullish.
Patience of course is the key word, and those who've been watching
the action should have noticed that a sideways base building pattern
has developed over the last 6-8 months, and this on increased volume,
again this is bullish. This Mr. HopeFull should also answer your question
abount RANGY. Check out the weekly charts over the last 2-3 years, with
stochastics, and it's a picture of accumulation at very low levels. See for
yourself, don't take anyone's word for anything. Your money- you judge!!!
Keep the Faith folks. - Date: Mon Sep 28 1998 10:40
Selby (Royal Oak) ID#286230: - http://www.globeandmail.ca/docs/news/19980928/ROBFront/ROYAL.html
- Date: Mon Sep 28 1998 10:31
NightWriter (XAU holding up) ID#390415: - Pretty well in light of today's downward slope in the spot graph.
- Date: Mon Sep 28 1998 10:30
MoReGoLd (@ULTRA-BEARISH Article by Stephen Wyatt) ID#348129: - OK, I give up. Why don't we all admit that the Barbaric Metal has no place in our modern financial sysytem. 6000 + years of history means nothing and is to be forgotten.
OUR FUTURE IS IN PAPER, after all, trees are much easier to grow than Gold.
We must all put our future into paper of all kinds, the ultimate
ASSET CLASS, after all, thats what our politician lawyers want.
Future growth is guaranteed.
Liability ownership is the place to be.........
GO PAPER ....... HaHaHaHaHa.............. - Date: Mon Sep 28 1998 10:29
HopeFull (RANGY) ID#402148: - Was reading POLARBEAR analysis of RANGY and was wondering if any here have a site with OTHER analysts opinions to substantiate his finds?
Any RANGY opinions?
Thanks
HB
- Date: Mon Sep 28 1998 10:09
kitkat (@Bill Buckler) ID#208393: - Congratulations! Java seems to have disappeared and your server is screaming fast this morning. I like the improvements and that first page is eyecatching. Thanks for the good work.
- Date: Mon Sep 28 1998 10:03
Goldteck (Gold struggles to retain safe-haven status ) ID#431200:
Copyright © 1998 Goldteck/Kitco Inc. All rights reserved - Gold struggles to retain safe-haven status by Stephen Wyatt
In the past month the gold market has risen from its grave. It almost broke through $US300/oz on Friday, its highest level for three months, up like a zombie from its 19-year lows of $US273/oz hit last month and a price rise of almost 10 per cent.
In Australian dollar terms, gold hit its highest level since March 1996 on Friday, breaking $A500/oz for the first time in two years. The confluence of the higher US dollar gold price and the lower Australian dollar have caused a strong price rise of almost 18 per cent so far this year.
For Australian gold producers, this is no bear market. But they would still like the US dollar price to keep rising to be able to lock in some attractive forward prices.
Over the New York trading day on Friday, however, the gold price slipped back from its $US299.50/oz highs as the US dollar rallied strongly against the yen. Gold ended up around $US294/oz.
Even so, gold's recent strength, in the face of rising concerns about a systemic collapse in the global economy, has several analysts asking whether it is regaining some of its status as a financial asset of last resort, a safety haven in times of economic upheaval.
The global economy had not yet unravelled enough to see concerted gold buying, said Mr Dinsa Mehta, Chase Manhattan Bank's managing director, commodities, in New York. But he believed the gold market would be boosted if the global economy became increasingly dislocated.
Others, however, remain bearish about gold's future.
If gold is incapable of a meaningful rally in the face of the current myriad of seemingly bullish events [equity market volatility, emerging market concerns, Russian economic chaos, a weaker dollar, deflating Japan and rising concerns about global economic conditions], we wonder what it will take to awake this metal from its ongoing slumber, said Mr Ted Arnold, senior metals analyst with Merrill Lynch in London.
ABARE, Australia's official commodity forecasting group, also has a sanguine view of gold's future. It forecasts gold prices to remain below $US300/oz over the rest of this year and to average $US293/oz for the year as a whole.
In the absence of further one-off events such as the South Korean and Indonesian gold sales earlier this year [about 290 tonnes of scrap gold was sold by these countries in the first quarter], gold prices are forecast to recover marginally in 1999 to average around $US300/oz, ABARE said in its Australian Commodities quarterly, published last week.
This view is based on lower global demand for industrial and jewellery uses for gold because of lower world economic growth. At the same time, ABARE sees little reduction in gold mine production and high levels of producer hedging over the next two years.
Lower gold borrowing costs, due to increasing gold lending by central banks and lower currencies in gold-producing countries such as Australia, South Africa and Canada, are factors driving gold producers to forward sell ( hedge sell ) .
ABARE estimates that 1997-98 Australian gold production will be about 317 tonnes, the highest yearly production on record. It forecasts 1998-99 production will be 313 tonnes. This makes gold Australia's second most important commodity export earner after metallurgical coal.
This lack of supply adjustment ( lower production ) to the lower gold price also has not occurred globally and it is one of gold's problems.
Mr Arnold said gold would not be able to move higher until world gold production fell by 300 to 400 tonnes. Without this, Merrill Lynch suggested gold would continue to decline over the next six to 12 months, albeit at a slower rate.
This view is supported by Gold Fields Mineral Services, a UK-based gold research group, which forecast global mine output in the second half of 1998 would be 8 per cent higher than in the first half. At the same time, it expected bar hoarding to halve.
As a result, GFMS forecast the gold price would average $US279/oz over the second half of 98. This implied a $US270 average in the fourth quarter. It is probable that price will fall below $US270 for extended periods, GFMS added.
Even more damning for gold were recent statements by Mr Mark Anson, portfolio manager of Oppenheimer's Real Asset Fund.
Gold is viewed as an underperforming asset which is currently underweighted in the fund, he said. Gold has trailed the riskless investments such as treasury bills and has underperformed inflation from 1990-1997. Compared to other asset classes, it has been a laggard.
In fact, gold was the only asset class which had shown a negative total return and Mr Anson could not see any reason for the future of gold to be much different.
In short, the major factor that has killed gold's role as a financial asset is simply that there has been a better asset of safety – US treasuries. The growing economic hegemony of the post-World War US has elevated the US dollar, along with US treasuries, above gold as the ultimate assets of safety.
Gold's inability to rally in the face of the present global economic crisis and soaring treasury prices are showing just this. http://www.afr.com.au/content/980928/market/markets10.html - Date: Mon Sep 28 1998 09:50
Gollum (Uh oh.) ID#43185: - Here we are almost half an hour after the equity market opened and Kitco is still working.
I've got a baaad feeling about this... - Date: Mon Sep 28 1998 09:47
TYoung (SDRer...) ID#317193: - No doubt they have known since late July...wonder why the market has been going down?
The real question in my mind is: Do we have counterparty defaults? They are not telling us...or are they. The FED seems a might involved for just a few bad bets. We watch and wait...but with insurance.
Back to work.
Tom
- Date: Mon Sep 28 1998 09:46
sharefin (Y2k Check - email chatter) ID#284255: - Just a little info on a city wide Y2K test this next wednesday in Lubbock
TX.
At some point they are supposed to check everything out in a drill that is
being kept top secret as far as procedure. News crews from NBC are coming
out to cover it...what ever it is. Wall Street Journal's Texas edition said
it will include law enforcement and food control.
You might watch NBC Wed. or Tues. and see what the results are.
- Date: Mon Sep 28 1998 09:46
Gollum (DOW +99) ID#43185: - Looks like you nailed it right on the head, panda.
- Date: Mon Sep 28 1998 09:41
Gollum (DOW +75) ID#43185: - First eleven minutes, slowing.
- Date: Mon Sep 28 1998 09:40
SDRer (Tyoung-re:LTCM) ID#286249: - Well, it's a relief that it is out… very well placed people in very high places have KNOWN about this for quite sometime. Like the name of God, it was considered sacrosanct, and eyes were carefully focused on less disruptive problems.
As Churchill remarked, This is the end of the beginning.
All-FT Weekend did a full page piece on Doris Schröder-Köpf, [wife of Germany's new leader] assessing her chances of becoming a role model for liberated German women. Schröder-Köpf says, We can be more generous towards men. We can make up for their weaknesses.
- Date: Mon Sep 28 1998 09:37
Gollum (DOW +52) ID#43185: - First six minutes. Good rise, but not really all that strong.
- Date: Mon Sep 28 1998 09:19
Boardreader (Gollum: Your 8:25 .......) ID#20770: - The FT said Western demands for full disclosure from emerging markets had worked to the advantage of hedge funds, who disclose virtually nothing about their positions -- even to creditor banks.
Reveals the prime motivation of 'Transparency International': a tool of the {political 'F' word} people.
Bkob in DC
- Date: Mon Sep 28 1998 09:18
chas (ChasAbar re Lifesavers) ID#147201: - An attractive idea, but it could raise mint cost which are high enough as is. BBL
- Date: Mon Sep 28 1998 09:13
Gollum (@panda ) ID#43185: - OK. Now, I'm not making any bets on the close yet. That's a whole nother ball game.
- Date: Mon Sep 28 1998 09:06
panda (Gollum ) ID#225220: - I think +100 to +130. No more than 8150 to possibly 8200 on the Dow. Higher than this might be ~8500 for a close in 'some' days. If we go higher than ~8200, I'll have to seriously reconsider the bear case for stocks... For now, I am going to try for that high speed port. So I can add this high speed data line and waste a lot of money waiting around for the 'net servers to respond to me... :- ) )
- Date: Mon Sep 28 1998 09:03
Carl (SA golds) ID#341189: - The South African gold stocks are holding up remarkably well given the drop in spot since they closed Fri.
http://quote.yahoo.com/q?s=^JGAI&d=1d - Date: Mon Sep 28 1998 09:00
sharefin (DETENTION CAMPS IN AMERICA) ID#284255: - http://www.yellowstoneinfo.com/concentration.htm
Is this for real? - Date: Mon Sep 28 1998 08:59
panda (Serial ports for PCI bus) ID#225220: - Anybody have experience with installing high speed serial ports on PCI bus? I've been through a couple of 'cards' already. All that I want is a 460Kb/s port.... That WORKS. What's so tough about that?
Off to break the system again... BTW, I tried Windows 98. I went back to NT 4.0. I had four crashes of '98 in one day. Opinion of Win '98? Take a guess........... - Date: Mon Sep 28 1998 08:58
Gollum (@panda) ID#43185: - I agree with up. In fact I will pick +165
- Date: Mon Sep 28 1998 08:58
lakshmi (Saturns transit and stations) ID#26350:
Copyright © 1998 lakshmi/Kitco Inc. All rights reserved - Saturn made a station ( turned retrograde in apparent motion ) on August 16th according to the Farmer's Almanac, a square to Bill Clinton's natal placement. It goes direct again on December 30th, while the moon enters the constellation of Taurus, which looks like a great buy date to me. When a planet seems to stop in the sky and make station is usually when it can have a dramatic or noticeable effect I wouldn't necessarily say good or bad, that depends on the circumstances and/or what a person wants. Saturn is currently going though Clinton's 8th House, Aries, according to the Sidereal zodiac ( Truth or Consequences in human sexuality per a book I was reading When Saturn transits the eighth house, a person has many lessons in the development of his personal sexuality and how it relates to society at large. Sound like the Bill we know? ) Aries is Saturn's debilitated sign, which can indicate delays in initiating projects or activities, right up to 20 degrees of Aries, the most debilitated point. By the end of December all the planets should be direct again.
Hope Greenspan doesn't cut more than 1/4 of a point at the most. I wish is was a tax cut instead - for companies and individuals. US market bouyant still, but how long can it really last with most of the world hit so hard? In the pursuit of life, liberty and hapiness I will always vote for a tax cut as the best remedy. Just making borrowing easier is more of the same problem, tax cuts put real money into the economy, or what do you think? If the mining industry gets hit harder, there won't be much mining going on period. Hope it has bottomed out! Regards. - Date: Mon Sep 28 1998 08:57
6pak (Asian economic Miracle @ Self-serving politicians and Business people) ID#335190:
Copyright © 1998 6pak/Kitco Inc. All rights reserved - September 27, 1998
Patten debunks Asian 'miracle,' says values universal
TORONTO ( CP ) -- Leaving Hong Kong on the royal yacht Britannia after the colony's historic handover to China, Chris Patten couldn't possibly have known the crash of Asia's booming economies was about to begin.
Patten, 54, the last British governor of Hong Kong, acknowledged he had no inkling on that fateful morning of July 1, 1997, that Thailand's currency would collapse the very next day, precipitating a financial tidal wave that would soon swamp Asia and shake the world.
I wasn't surprised that the bubble burst because there was obviously a bubble.
But I had been expecting that I would write a book which warned people that this couldn't go on forever. And instead I found myself writing a book after it was demonstrable that this couldn't go on forever.
At the heart of Patten's book is his belief that human values are universal. Decency is decency, East and West, he writes. The same can be said about human rights, democracy.
Such self-evident truths are obscured by self-serving politicians and business people, Patten said.
I never believed that there was an Asian economic miracle, Patten said.
I thought that what had happened in Asia was spectacular and in many respects unique. But I didn't think it was alien or inexplicable.
I thought it was the result of Asian countries getting some of the basics right -- education, health care, supporting exporting industries.
And I thought it was, above all, due to the expansion of trade, an easier access to world markets.
http://www.freecartoons.com/NationalTicker/CANOE-wire.Patten.html - Date: Mon Sep 28 1998 08:57
Gollum (@Bully Beef ) ID#43185: - Well gosh,I would never say anything like that. I would say though that LTCM is just one small part of a much bigger pitcure....
- Date: Mon Sep 28 1998 08:54
panda (Gollum) ID#225220: - Up.
- Date: Mon Sep 28 1998 08:52
Bully Beef (Do you imply (Gollum ) that LTCM my have manipulated markets to their own) ID#259282: - ends meanwhile getting support from Federal institutions and large financial institutions inside and outside the USA using insider knowledge...and yet they are still so stupid they went broke. Or did I just put words in your mouth? Imagine losing at a poker game when you knew all the cards people were holding. Now that's a conspiracy!
- Date: Mon Sep 28 1998 08:51
Gollum (Any bets?) ID#43185: - Globex up and strengthing. Bonds up, dollar up, metlas down, oil up.
Any bets on where the DOW will be in the first fifteen minutes? - Date: Mon Sep 28 1998 08:50
Freasyberry (Imagine the damage if Partners of Long Term Capital had) ID#339297:
Copyright © 1998 Freasyberry/Kitco Inc. All rights reserved - been stupid. I mean, if they merely had a biz degree from U of South Carolina as I , we would really be in big trouble. It gets tiring to hear of 'really smart guys ( gals ) who are consistently given too much capital to match their ever increasing ego. So UBS hedges a 7 year warrant for $250 Million by buying $750 Million of LTC. Does anybody have a brain ? If LTC Partners were so able, why would a bank BET against their deal regardless of the premium ? Key word is BET. The securities markets have been turned into a casino. All too often , the managers are making decisions that look more like BETS than reasoned thoughtful analysis. Just an opinion. Surprised that BIZ is not acting better given the world situation.
- Date: Mon Sep 28 1998 08:48
SDRer (Roebear--Ft identifies the fund as Convergence Asset Management) ID#286249: - bond arbitrage fund run by Andrew Fisher. Letter sent to investors on Friday said ( in part )
While our house lost shingles and windows, we're still here. These are by no means normal times so I don't want to predict that we won't suffer more market to market losses before things improve. But I believe, for the survivors, the opportunities are great. We intend on being one of the survivors. COMMENT: Don't we all!
- Date: Mon Sep 28 1998 08:46
Gollum (Echos of '29) ID#43185:
Copyright © 1998 Gollum/Kitco Inc. All rights reserved - In the stock market crash of '29, it wasn't the little people who took the initial big hit. It was the tycoons on the street. Stock evaluations had gotten too high for the little guy. Big highly leveraged stock margin funds were rampant.
When the crash came, a lot of little people found they could now buy in, and expecting stocks to return to their lofty heights, they did so.
Of course, the banking crises then ruined everybody and the economy sank into the depression which in reality had already begun although it had been masked by high market prices.
A few of the tycoons had seen the writing on the wall and gotten out early. When the depression came, having money they were in postition to create some of the greatest fortunes yet seen.
Today, the initial big hits are being taken by the small clique of millionaires able to buy into the entrance fees required by the hedge funds.
A few like Warren Buffet have seen the writing on the wall.
I think that during booms as virtual money expands and the financial worls grows ever more rosy, leveraging by big money allows it to rake in most of the profits.
When the inevitable bust comes, it is only natural that big money be the first to forced to the reality that the wealth was only virtual.
Being an insider is great on the way up... - Date: Mon Sep 28 1998 08:33
EJ (Cockroaches) ID#45173: - They hate sunlight.
- Date: Mon Sep 28 1998 08:31
Gollum (International conspiracy in dark places) ID#43185: - One good thing that has come out of the LTCM thing is the light it is putting on areas where the sun never did shine before. Bit by bit we are putting together a big picture that begins to answer a lot of nagging questions.
Yen carry trade, gold carry trade, bond market and currency manipulations. Actions of the IMF. Big highly leveraged money movements.
Almost all of it associated with the same group of names who have come together to bail out LTCM.
Let the sunshine in, - Date: Mon Sep 28 1998 08:31
BillD (Re: supply and demand of physical Gold Coins) ID#258427: - My dealer told me over the weekend that he did not have a problem getting supply...but could not keep a supply on hand...went out the door as fast as it came in...Selling golden eagles retail for $325 ..
fwiw... - Date: Mon Sep 28 1998 08:31
Squirrel (A lucrative market in fancy coin holders could develop) ID#280214:
Copyright © 1998 Squirrel/Kitco Inc. All rights reserved - For our 10-grain Gold coins and 5-grain Silver coins {same diameter & slightly thinner than the Gold}. There could be ornate walnut, cheap plastic, and minutely engraved Platinum-Iridium holders with a flip top and central rod to hold these coins which all have a central 2mm hole.
Counterfeiting of Pi-Ir package or the Gold coins would be a moot point since anything with a density equal to 19 to 21 grams/cc would be as valuable as the original. Unless someone figures out how to make tungsten coins with the same designs - a HARD task indeed! If the bulleted Pt-Ir ends & rod package was full of Gold coins - the spec. grav. could be quickly determined by displacement and weight. - Date: Mon Sep 28 1998 08:30
sharefin (Some great reading here) ID#284255:
- - http://www.afr.com.au/
Stories on;
Brokers, funds managers feeling the squeeze
Saving grace
Thank God for the Fed is a phrase that can be heard resounding the concrete canyons of Wall St.
Hedge fund fears
After warning other countries about lax regulation, US financial supervisors are under attack. -
---------------------------------
And for those with a bent of wasting many hours:
http://sunsite.unc.edu/pub/academic/environment/
Oddles of alternative info here.
You'll need to wander amongst the directories.
But there's a bit of info for everyone here.
Lots of alternative pertinent info if Y2k goes bad. - Date: Mon Sep 28 1998 08:25
Gollum (@Tyler Rose) ID#43185: - Good find. I especially like the line:
The FT said Western demands for full disclosure from emerging markets had worked to the advantage of hedge funds, who disclose virtually nothing about their positions -- even to creditor banks.
Makes it appear that knowingly or not, the IMF works in collusion with the hedge funds. Interesting. - Date: Mon Sep 28 1998 08:23
EJ (BillD) ID#45173: - Lull them in, then rip their faces off.
This is the lull them in part. As Gollum says, listen for a riiiiiiping sound Tues afternoon. Until then, some baiting of weak bears and torpid bulls.
-EJ - Date: Mon Sep 28 1998 08:20
Roebear (Tyler Rose) ID#412172: - Thanks! That was it, though I suppose there is room for more.
- Date: Mon Sep 28 1998 08:19
Squirrel (Steve in TO - ditto to Mikes 21:14 for smaller Gold coins than now available) ID#280214:
Copyright © 1998 Squirrel/Kitco Inc. All rights reserved - The most common US note is $20 for good reason. A 10-grain Gold coin, if the POG increases as we all hope, would trade at that same value. At a trade value of US$10, hauling around many 1oz Silver cartwheels would be weighty!
ChasAbar's suggestion of putting a hole in the middle of the tiny Gold coins has a LOT of merit. They could indeed be strung together and be Lifesavers!
We could devise a FLIP TOP carrier with a central rod. Just flip open the purse and dump out however many Gold and Silver coins you need for the transaction. FOR SMALL CHANGE we could be Silver coins of the same diameter and hole. As coins are spent, the space could be taken up with wooden nickels or plastic spacers.
Another thought...
Two ornate bullet-shaped Platinum-Iridium coins with a Platinum=Iridium rod connecting them and fifty Gold coins packed in between on that rod. One of the Pt-Ir ends would thread on the rod to tie the whole thing together in a package about 25mm {one inch} long by 10mm diameter. {I'm choosing Pt-Ir because it wouldn't strip its threads like Gold would.} This Pt-Ir carrier would itself weigh 50 grains or so and trade at US$50 or even US$100 because of its unique workmanship and value. Fifty 10-grain Gold coins plus the carrier would have a trade value of US$500 to $1000 depending on the prices of these metals and what we can mint the 10-grainers for.
Carrying the Gold and Silver coins strung on the Pt-Ir rod in a purse would limit wear to the edges and protect the coin faces. Thus both the Gold and Silver could be .99999 pure and be stamped as such.
Thanks guys, for the suggestions and support. Now we must get the potential mint volume up so the cost of the 10-grainers can be under US$10 each.
- Date: Mon Sep 28 1998 08:18
Roebear (Donald) ID#412172: - Heard mention of another hedge fund going belly up on SI, but no particulars or source. Possibly only a rumour. Anything on your radar screens
- Date: Mon Sep 28 1998 08:15
Tyler Rose () ID#373164: - Another fund suffers big losses.
http://biz.yahoo.com/rf/980928/cu.html
Also mentions 1.25 T us$ loss for LTCM - Date: Mon Sep 28 1998 08:14
BillD (Sure is quiet) ID#258427: - On all fronts...eeeiry...!
- Date: Mon Sep 28 1998 08:07
Gollum (@MoReGoLd ) ID#43185: - Could be. I think, however that there are other explanations too.
- Date: Mon Sep 28 1998 08:05
BillD (@Moregold...Needless to say....) ID#258427: - Some People do not want to see gold get away from them...Wonder Who Heh Heh Heh
- Date: Mon Sep 28 1998 08:03
JTF (No time to read!) ID#254321:
Copyright © 1998 JTF/Kitco Inc. All rights reserved - All: Apologies from yesterday. That was Edgar Mitchell ( Not George Mitchell ) that wrote the foreward to Paul Hill's book, titled 'Unconventional flying Objects'. This foreward clearly implies that alot more is known by the government about such craft, than published in the book. No surprise, but as I said earlier, the real 'awakening' of the human spirit will be when this information is no longer restricted to a few government scientists. LGB -- I think you should talk to the US Astronauts about UFO's. Scott Carpenter and Edgar Mitchell will open your eyes.
All: Editorials solidly pro-clinton this AM, market on globex up last checked ( Latet PM yesterday ) . Markets up today, gold equities down.
Donald: You say AG has no ( direct ) authority to intervene in hedge fund operations, hence he is powerless to stop the liquidity crisis that seems to be coming our way. That may be true -- but he has alot of clout, and can marshall a boatload of money from other sources.
Now, if he can somehow get money to the PPT -- presumably to private sources -- those private individuals can simply pass the money over to those ailing banks and hedge funds. I think AG probably has alot more leeway than we think. My guess is that he will do just about anything to fend off a direct attack on the world's financial system. I think what we must be especially alert for is anyn unexpected change in the money supply, Federal unofficial or official debt.
I may be wrong about this, but Japan is probably alot further along than we are in coming to grips with their debt problems. I believe they just announced their biggest bank failure yet yesterday. No -- it was not the Bank of Japan. That one really is too big to fail ---.
I think the real risk to Japan right now is a big-time US recession.
- Date: Mon Sep 28 1998 07:53
MoReGoLd (@Blatant Manipulation) ID#348286: - It's interesting that when most people would expect Gold to soar, it goes the opposite way. This has happened time and time again.
Demand for Gold coins are at record highs etc., world financial turmoil at unprecidented levels and yet no sizable appreciation in POG.
There can be NO other explanation ............... - Date: Mon Sep 28 1998 07:50
Silverbaron (Mike Shelller) ID#289357: -
Here's a link I found over the weekend for you to peruse........
- Date: Mon Sep 28 1998 07:23
Mike Sheller (monday mornin' at the chartz) ID#347447:
Copyright © 1998 Mike Sheller/Kitco Inc. All rights reserved - Check out these charts -
http://www.decisionpoint.com/ChartsWeekly/00gold.html
A comparison of the XAU with Bullion is very interesting at this juncture. Bullion has put in a lower low than it did in '93, but it still has not truly broken down significantly below the bottoms registered since the '80 peak has been correcting. The XAU on the other hand has pretty much held support at its previous important low in '93. The recent spike down may have just been an end of bear cycle hook. A Hook is the breaking of support that dealers love to pull on stocks as they know that everyone is a technician these days, and more people than ever watch these support and resistance levels. This is how dealers get even cheaper stock at bottoms - by washing out even the bottom feeders and certainly many longer term holders who get discouraged and panic at the thought of still another sweep to new lows. As more and more traders look for hooks, the chess game will doubtless go on to new refinements.
One could make an argument in either direction, but I choose to see it that the relative strength in the shares vis a vis the bullion is an encouraging sign that a bottom in gold is probably in, and a base is now being built for the next bull. There is room, in my mind, for the XAU to reach 170ish by mid-'99 if this is the case.
Of course the divergence of general trend between the NYSE composite and PM's is classic early asset inversion stuff. But I am still looking for one more rally for stocks wherein all assets are rising. THAT will be the sign the end is near. - Date: Mon Sep 28 1998 07:20
Silverbaron (Monday goodies) ID#289357:
Copyright © 1998 Silverbaron/Kitco Inc. All rights reserved - Yvan Auger's XAU Elliott Wave Forecast
http://www.mgl.ca/~yauger/wrapup.html
XAU T/A
http://www.securitytrader.com/daily/9-25%20XAU%20-%20daily.gif
DJIA T/A
http://www.securitytrader.com/daily/9-25%20DJ-30%20-%20daily.gif
Silver T/A
User: WAVE5 Password: TTI
http://markets.tradingtech.com/Metals/SI/SIIntra/SII/SII_0.html
Elliott Wave Analysis for DJIA and US Bonds
http://www.geocities.com/WallStreet/Floor/9823/updates/djia9-28.htm
DJIA Seasonal trend
http://www.mrci.com/correl/lbrc001.htm
SP500 Seasonal trend
http://www.mrci.com/correl/lbrc003.htm
- Date: Mon Sep 28 1998 07:15
Gollum (@jims ) ID#43349:
Copyright © 1998 Gollum/Kitco Inc. All rights reserved - There are those ( big money those ) who consider silver to be more of an industrial metal than a precious metal. They take the position that the economy is going to be slowing rapidly and that therefor silver prices will decline.
Big money is not always right.
When big money turns out to be wrong the results are spectacular.
Big money tends to be arrogant, especially where it has had some success in the past, and will maintain a position even when it begins to be apparent they mat be backing the wrong horse.
Sometimes they manage to manipulate their way out of trouble before they have to close out the position. Sometimes not.
You will notice that Merrill Lynch, Goldman Sachs, UBS, et al, that came together to help bail out LTCM are the same crowd who have made a great deal of money on the short side of the metals these last umpteen years. Ted Arnold, Marshal Armstrong I believe, and others are spokesmen for this group.
Their position is that gold in particular and to a great extent silver were once highly valued because they were used as currency. That now that this use has been largeky discontinued in the fiat monetary system they still hold an overly high residual valuation. That over the years this evaluation will decline to something approahing their cost of production as they take on their commodity status, and that therefor a grat deal of money can be made by being on the short side.
For going on two decades they have doen well with this philosophy through ups and downs.
Warren Buffet has taken the position that indutrial metal or not, supplies of silver are running out. Sooner or later prices will reflect that.
He is prepared to wait. He has even built his own Warehouse in Merrie Olde England to store the stuff, so you know he is prepared to wait for more than a few months.
For now gold and silver prices are reacting to the daily fortunes of the dollar and the resulting ebb and flow of leveraged money. Up until the cupboards are noticeably bare, the gold-and-silver-are-commodities-group are prepared to maintain their attitude.
I think the writing is on the wall, however, just as it was for LTCM. Sooner or later, diehards or not the markets will not move in their favor and there will be more fire in the hole.
- Date: Mon Sep 28 1998 07:13
Donald (Taiwan Central Bank cuts interest rates) ID#26793: - http://biz.yahoo.com/rf/980928/f1.html
- Date: Mon Sep 28 1998 07:05
MM () ID#350195:
- - Goldman and its publicly traded rivals are facing a sudden downturn across most of their businesses because of global economic turmoil and plunging stock markets, a dearth of stock and debt offerings and tough bond trading conditions. As a result, many have have seen their market value plunge by half or more in recent months, which means Goldman's partners would pocket millions of dollars less than they would have before the market decline.
Goldman Sachs likely to shelve plan to go public until global markets stabilize
http://www.nando.net/newsroom/ntn/biz/092798/biz16_8626_noframes.html
- Date: Mon Sep 28 1998 06:57
jims (To Rhody) ID#252391:
Copyright © 1998 jims/Kitco Inc. All rights reserved - Your work with the lease rates is gathering wide appreciation. Unfortunaltely, I can not be much help in your search for the current lease rate on silver as my local paper doesn't carry such data.
What it does say, however, is that silver is in a tradtional carrying charge configuration. So is platinum which is rare, and so is oil which is very unusual for that commodity when in a ralling phase.
Bottom line the carrying charges are not showing any tightness in oil, PT or silver, in particular.
Realizing that is different in some repects to lease rates, is their anything that ties the lease rates and the carrying charge together I'm sure there is, but can one infer that becasue there are good carrying charges that the lease rate is low. - Date: Mon Sep 28 1998 06:51
Gollum (GZZ8 295.5 SIZ8 5.130) ID#43349: - Metals still coming down. Silver has come up a bit, though. Globex up, oil up, dollar up. No report on bonds, I wonder why, probably too early beginning of the week.
- Date: Mon Sep 28 1998 06:45
jims (Everybody's lost) ID#252391:
Copyright © 1998 jims/Kitco Inc. All rights reserved - I think everybody's lost - not knowing which way is up from down.
Never the less - which is becoming of the value of gold and silver at this hour - Silver has been down to $5.12 last at $5.13 - pretty strange action for a thing on its way to vanishing from existance. As Bill Murphy says over on SI we may be all asleep on this one. Fact is we aren't but the rest of the investing world seems to be or has a differenct agenda.
Gold is down 80 cents, The S&P has given up all but 200 points of its earlier gain.
The dollar is a little stronger. As earlier noted the focus seems to be that the interst rate cut is bullish for equities, particularly AMerican equities as the recessionary fears will wane after the stimulative effect of the rate cut. And I believe in Santa Clause or better the Tooth Fairy. - Date: Mon Sep 28 1998 06:38
Donald (Interest in Australian gold stocks last night) ID#26793: - http://biz.yahoo.com/rf/980928/cm.html
- Date: Mon Sep 28 1998 06:33
Donald (Nikkei propped up by public pension money last night.) ID#26793: - http://biz.yahoo.com/rf/980928/co.html
- Date: Mon Sep 28 1998 06:26
Donald (U.S. unit of Nomura reports heavy losses. Executives resign) ID#26793: - http://biz.yahoo.com/rf/980928/e4.html
- Date: Mon Sep 28 1998 06:19
Donald (Underground banking a real problem for China.) ID#26793: - http://biz.yahoo.com/rf/980928/b1.html
- Date: Mon Sep 28 1998 06:15
Donald (DM calm after German election. Japanese bankruptcy seen as good sign.) ID#26793: - http://biz.yahoo.com/rf/980928/ej.html
- Date: Mon Sep 28 1998 06:11
Donald (China signals alarm over capital flight.) ID#26793: - http://biz.yahoo.com/rf/980928/eu.html
- Date: Mon Sep 28 1998 06:00
Gollum (GCZ8 296.2 SIZ8 5.120) ID#43349: - Gold holding pretty steady, silver dropping. Spot gold down, spot silver down. Silver leading the way down.
- Date: Mon Sep 28 1998 05:53
Gollum (Here comes Monday) ID#43349: - Globex up, dollar up, metals down.
Looks like the market will open up. Metals will be declining as money shifts back to the equities. Probably through Tuesday afternoon. - Date: Mon Sep 28 1998 05:42
rhody (@ jims: when open interest on COMEX for a metal seems weak) ID#411440: - even while fundamentals are strong, the price volatility often shows
up in lease rates. So, what are one month lease rates for silver?
My last figure ( Sept. 15 ) is for a one month lease rate of 2.35%
This is just low enough now to reactivate the silver carry. But
is the rate still at 2.35%? I think not. If silver is heating up,
the price change will first show in lease rates.
Doew anyone out there have a lease rate for one month silver? - Date: Mon Sep 28 1998 04:59
Jack () ID#237264: -
Looks like the markets are more focused on the potential of a rate cut, rather than negatives of Asia, Russia, Latin America, WJC and LTCM.
In quess we'll have a delayed reaction in gold and silver. The LTCM ditty has 20+ dollar gold spurts written in the script.
Bill Murphy over at SI says WB is buying silver again. - Date: Mon Sep 28 1998 04:53
jims (Knock my socks off) ID#252391:
Copyright © 1998 jims/Kitco Inc. All rights reserved - Well, now that London is about to open, our dwindling
supply of silver at Comex has the manipulators so
freightened that the stuff is down 2 cents. Gosh, what would
happen if there was actually an increase of say 500K oz at
Comex - limit down.
This conspriacy stuff is a handy arguement. Forces can not
be indentified for the inability of silver to rally dispite falling
stocks so we'll say they are manipulating the price lower in
order to grab it all for themselves. Curious, we saw what
happened to the Hunts when they tried to corner the market
and Buffett hasn't faired very well on his investment, either.
Yet we think that there are powers strong enough to keep
down a market with such overwhemling fundlementals. With
a short position estimated to be 800 million oz by the
proponents of the conspiracy manipulation theory, just who
do you suppose they fiqure they will be buying from. If you
and I research the positives of the silver supply and demand
equation shouldn't we suppose the shorts would do the
same before they entered into a potentially disasterous
situation as trying to bust a market with such postive
fundlementals as our reading of them has pursuaded us they
are.
Oh I know they are stuck and can't do anything else but
put on more shorts to control the building fury. They are
doing this by the way without public visability. Notice that
the open interest in NY is not rising. Hence it must all be
OTC activity or in London. Pretty secretive lot - almost
invisible in their tracks.
Furthermore, as they would depress the price of silver its
value as an asset would only increase, attracting hedge
buying and speculative/investment interest - if any of that is
left.
If they are controlling this market they must be doing it in
the paper derivative market place, Over the Counter not on
the Comex where open interest has been falling. By now
they should be pretty worried but they don't act like it.
Smarter players than I am, better capitalized, too. Better
capitalized than Warren Buffett and all the other multi
millionaires that you'd think we want a piece of this vanishing
asset. They are in control; we think to profit by fading
them!!!
Silver has traded lower today than its $5.17 previous close.
I'll be adding to my silver share position on a close above
$5.175 or if silver climbs inter day to $5.25.
- Date: Mon Sep 28 1998 04:37
Jack (Just a point to keep in mind) ID#237264: -
When you read about lower gold shipments through Dubai to India; remember that, rently approved Import Banks can receive gold direct from Swiss and British Banks.
To be sure Dubai will restrenghten its India connections and seek new customers in other lands. - Date: Mon Sep 28 1998 04:16
Paul Gold (Mocatta Market Report) ID#21484: - The ABSA-Mocatta Goldwatch Weekly report on the gold market is now available at http://www.drd.co.za/. Also watch the same website later this week for the very comprehensive DROOY annual report.
- Date: Mon Sep 28 1998 04:02
POLARBEAR (RANDGOLD and EXPLORATION (RANGY) a free $1 per share...) ID#183109: - Who says ya can’t get a lot these days for 68 cents.
DURBAN SHARES $0.55
MINERAL RIGHTS $0.85
TOTAL DEBT $1.30
$20 Mil. ( R.Res. Issue ) $0.48
TGME $0.10
$10 Mil SUF CASH $0.24
OTHER HOLDINGS $0.10
NAVACHAB $0.02
RANDGOLD RES. $0.65
NET TOTAL $1.68
CURRENT PRICE $0.68
http://www.geocities.com/~polarbear47/rangy.htm
- Date: Mon Sep 28 1998 03:49
aurator (The shortest Long Term you'll ever see....) ID#250121:
- - Auric
I agree with Earl, we have a great ring-side seat here at kitco. Can you hear the sound of falling dominoes o'er yon horizon?
Now, this is some leverage that is being reported here, the world has never seen a bubble this inflated, I emphasise this from your last post:
.. LTCM used capital of $2.2 billion at the end of August to borrow $125 billion in securities, which were then leveraged into derivatives for a total market exposure of $1.25 trillion....
By comparsion, France's gross domestic product in 1995 was about $1.45
trillion..
Well I reckon that does it. Napoleon's pride has got nothing on these fellas. Hubris time....
- Date: Mon Sep 28 1998 03:26
Auric (Another Hedge Fund in Trouble) ID#255151: -
http://biz.yahoo.com/rf/980928/cu.html - Date: Mon Sep 28 1998 02:54
Gold Dancer (LTCM) ID#430221:
Copyright © 1998 Gold Dancer/Kitco Inc. All rights reserved - I repeat, LTCM is the BRE-X for the stock market. The fallout is
just beginning. Expect more hedge funds to simply ask the fed to
arrange a bailout. What is Greenspan to do. The cat is out of the bag.
This is a good old boys club and Greespan just announced to the world
that it is indeed still in effect.
Why did he do this? He must have known what would happen. Maybe he
wants to bring the system down by April so he can be the hero and
rescue all of us with a gold backed dollar.
Who knows? Who can say? Time will tell.
Go Gold.
Thanks, GD - Date: Mon Sep 28 1998 02:49
mozel (@Sheller) ID#153110:
Copyright © 1998 mozel/Kitco Inc. All rights reserved - You posted something earlier about a nation of laws that apply equally to everyone or words to that effect. I applaud your rousing support for the ideal, but wonder at your perceptions of the way things are. It is not only that we live in a nation in which the law indemnifies the wealthy for their losses ala Long Term Capital Management, it also prefers certain races and the female gender over unprivileged races and the male gender. But, this merely scratches the surface. There are so many programs and benefits for which those privileged can qualify that it beggars inventorying. Special loans, grants, zones, permits, licenses., exemptions, deferrals, deductions. The law is being used to confer status everywhere you look. I suggest it is past time for folks to examine whether or not fidelity to ideals of equality before the law, liberty, and justice and consorting with the greenback machine and its bogus, puppet State of governments are at all rationally compatible.
- Date: Mon Sep 28 1998 02:46
ravenfire (biggest financial failure in Japan since WWII (another one)) ID#333126: - http://business-times.asia1.com.sg/1/nfrnt05.html
that's the story I was looking for ( re: earlier post ) - Date: Mon Sep 28 1998 02:41
ravenfire (LTCM fallout) ID#333126: - http://business-times.asia1.com.sg/1/cfinc04.html
last paragraph:
some French banks saw their stock price fall 15% on news of the LTCM bailout. and got trading suspended to boot.
did anything similar happen in your neighbourhood? - Date: Mon Sep 28 1998 02:31
ravenfire (witching hour news) ID#333126:
Copyright © 1998 ravenfire/Kitco Inc. All rights reserved - Japan still hasn't moved on bailing those big banks
http://biz.yahoo.com/rf/980928/bp.html
Bits of LTCB start peeling
http://biz.yahoo.com/rf/980928/br.html
more mergers? how big is Asahi Bank?
http://biz.yahoo.com/rf/980928/bm.html
Bank of Japan helping out major Japanese banks ( Selling T-bonds to friendly banks? )
http://biz.yahoo.com/rf/980928/bi.html
- Date: Mon Sep 28 1998 02:21
tolerant1 (to the fin that shares...Namaste' something is funky cause my email is getting bounced) ID#31868: - to a whole heck of a lot of folks...you...clone...and bunches of people...not understanding something is just part of life...sigh...
- Date: Mon Sep 28 1998 02:03
sharefin (Also from the HOUSTON CHRONICLE) ID#284255:
- - Financial storm threatening Latin America is scary
By JIM HOAGLAND
THE global financial storm that devastated Asia and Russia is now centered off the coast of Latin America , threatening for the first time to inflict significant damage on U.S. prosperity and perhaps end the extended boom of the Bill Clinton years.
Historians will await the storm 's passage to analyze exactly how the fate of equity and bond markets in the world's only remaining superpower came to ride on Brazil's election-year defense of its currency, the real.
They will be able to assign responsibility for the missed opportunities, flawed international cooperation and human greed that produced such an unlikely vulnerability in America 's financial armor long after warning signs went up in Asia.
But decision-makers along Wall Street do not have the luxury of retrospection. They confront the possibility of a severe credit crunch as part of the fallout of 14 months of turmoil in global markets. The huge cloud they see may yet turn out to have a silver lining, though.
Money is scarce for deals that contain any risk and for the first time in my professional life I hear serious people worrying about the survival of their banks, said the managing director of one of New York's most successful investment firms. Fortunately they are not doing this worrying in public and spooking everybody. But the concern is there.
Turn a moment from the Monica Lewinsky scandal, the most overtold story of our time, to the most important undertold story of the day: the concern about the health of the world's private or semiprivate financial institutions. Those who know the most about it say the least, to avoid sparking panic.
But the story is gradually emerging as the first delayed and still tentative steps by governments to deal with the crisis of global market confidence are being taken.
When Federal Reserve Chairman Alan Greenspan hinted on Wednesday that he will push this week for a cut in interest rates, he helped lift a corner of the veil on these concerns.
Historically, Greenspan's concerns have not been focused on short-term stock prices or on one year's growth rate. His driving concern is the long-term stability of U.S. banks and other financial institutions. The Fed recently has kept interest rates high to help balance sheets in those institutions stay healthy as well as to fight inflation.
If the Fed does cut rates soon, its decision should be seen as a move to ease severe liquidity and confidence problems that are beginning to hit U.S. investment banks, not simply as a move driven by the needs of the stock market or of manufacturers hit by declining Asian exports.
In Indonesia, South Korea and Russia, it was Japanese, French and German banks that came to grief with loans and investments that were flattened by financial collapse. U.S. exposure was slight and the Wall Street party roared on. But U.S. investment and commercial banks are at significant risk in Brazil and elsewhere in Latin America .
Bankers estimate that Brazil's government, desperate to stave off austerity measures until it gets past national elections on Oct. 4, is spending $1 billion a day to stabilize the real and keep Brazilian and foreign investors from stampeding out the door. A new meltdown, in Brazil, would shake the global system and torch Wall Street.
The collapse in Russia showed in detail that the world's financial upheaval is essentially a banking crisis. Investor confidence has been diminished globally by the inability of private banks and governments in the crisis countries to pay off loans, redeem bonds and meet their other obligations.
This is where the cloud's silver lining may now lie. American, European and Japanese banks stand on both the cause and effect side of the ledger. Their loans and investments helped create a crisis that now prevents them from getting repaid.
It is a moment for the world's bankers, their regulators and political leaders to think big: to think of a coordinated global rescheduling of government and private debt and some writing down of imperiled loans and investments in the crisis countries. Russia, Indonesia, South Korea and the others must reciprocate in a grand bargain to clear the books by encouraging equity-for-debt swaps and by opening their banking systems to foreign competition, investment and surveillance.
This grand bargain is admittedly ambitious. But the swiftness and destructive power of the still blowing global financial storm mandate boldness and comprehensiveness. The now clear dangers of pursuing business as usual provide significant leverage for change in an international financial system that is rapidly becoming, to put it bluntly, scary. - Date: Mon Sep 28 1998 02:00
sharefin (US Equity Market Monthly Overview) ID#284255: - http://www.cme.com/market/equity/outlook3/stk998cme.html
- Date: Mon Sep 28 1998 01:49
sharefin (Sorry about the length. But can't post the url) ID#284255:
- - From the Houston Chronicle
Can Latin America prevail against global gales?
By DAVID IVANOVICH
Copyright 1998 Houston Chronicle Washington Bureau
WASHINGTON -- The economic storm that blew through East Asia and ravaged Russia is now whirling its way through Latin America.
Despite the painful economic reforms enacted in the region since the mid-1980s, foreign investors have been fleeing Latin America.
Unlike the Mexican peso crisis that began in December 1994, today's economic turmoil has not been isolated and may not be short-lived.
The global environment is much less benign, said Nina Ramondelli, a senior vice president for Moody's Investors Service.
Much of East Asia is now mired in a severe economic slump, while even the long-robust U.S. economy is slowing down. Emergency organizations such as the International Monetary Fund, which have provided relief in other crises, are strapped for cash, while foreign investors have become extremely wary of emerging markets.
Already, economists are beginning to compare the current climate to the dark days of 1982, when governments across Latin America defaulted on billions of dollars in loans and investors abandoned the region for a decade.
World leaders, having failed to stop the economic crisis as it spread from Asia to Russia, are now trying to draw the line in Latin America.
President Clinton has called for a summit of financial leaders to address the crisis. The Inter-American Development Bank has approved a record $1.1 billion loan for the region's largest economy, Brazil, while the head of the International Monetary Fund has vowed that Latin America will not fall.
Any economic downturn in Latin America could have severe repercussions on the U.S. economy.
Companies based in the United States have been moving aggressively into Latin America in recent years, and investors are now anxiously awaiting the release of companies' third-quarter earnings to discern how badly the turmoil has affected their bottom lines.
Last year, Mexico surpassed Japan to become the United States' second-largest trading partner, while exports to the rest of Latin America rose 20 percent.
For more than a year, it seemed the world's economic crisis might bypass Latin America.
When currencies across East Asia started plummeting and economies from Thailand to Japan began slipping into recession, investors immediately feared the crisis would hop the Pacific and affect the emerging markets of Latin America.
While the trade ties between Bangkok and Buenos Aires, Seoul and São Paulo are not sizable, investors worried the commodity-dependent economies of Latin America would be dragged down by the overall slump in commodities markets that accompanied the Asian crisis.
The slowdown in the Asian economies also dampened demand for some key Latin products, including copper from Ecuador and crude oil from Venezuela and Mexico.
Investors became agitated when they realized how much debt the Latin economies had accumulated -- particularly from American lenders -- since resolving the debt problems left over from the early 1980s. The region's external debt topped $678 billion by the end of 1997, up 42 percent from 1990, according to Moody's.
U.S. companies, which had been targeting Latin America in anticipation of closer trade ties, have far greater exposure to Latin America than to Asia. U.S. banks had $46 billion at stake in the region as of June 30, according to the bank rating service Veribanc.
But as the crisis toppled one Asian economy after another, beginning in July 1997, Latin America impressed investors, both with its defensive posture and its staying power.
After defaulting on loans in the early 1980s, several Latin countries spent years under the financial tutelage of organizations such as the International Monetary Fund and the World Bank.
While humiliating, these experiences prodded the Latin governments to institute sweeping structural reforms that lowered trade barriers, privatized state-owned enterprises and reduced budget deficits. Brazil has garnered $80 billion since 1991 from the sale of state-owned assets, including $19 billion this summer with the privatization of the sprawling telephone company Telebras.
The experiences of the 1980s also taught Latin governments the kind of responses foreign investors want to see in times of crisis.
In the wake of the Asian debacle, Brazil, which alone accounts for an estimated 45 percent of Latin America's gross domestic product, launched an IMF-style austerity program.
To entice investors not to pull their cash out of the country, Brazil kicked up its interest rates to more than 40 percent. The prospect of such high returns persuaded many investors that Brazil was worth the risk. And as investors became more assured, capital began to flow back into the economy.
Investors also took comfort from Mexico's experience after the devaluation of the peso in late 1994. The United States and the IMF reacted quickly to that crisis, lending Mexico hundreds of millions of dollars and helping the country avoid a default.
That fast response helped contain the crisis and avert a regional selloff. In fact, the successful handling of this crisis may have contributed to excessive creditor complacency about future crises, Moody's recently told investors.
As of May of this year, the effects of the Asian crisis on Latin America were relatively limited, officials at the IMF reported.
Then, on Aug. 17, the financial markets were shaken again as Russia defaulted on a portion of its debt. Suddenly, investments in all emerging markets -- and Latin America in particular -- were suspect.
Where people before saw economic activity and growth, they now saw risk, said Daniel Yergin, chairman of Cambridge Energy Research Associates and co-author of Commanding Heights, a study of the global economy.
Banks dramatically tightened their lending standards. Investor enthusiasm for Latin American bonds evaporated. And Latin America, which had relied heavily on foreign investment to fund its economic growth, was left without its ready source of cash.
Credit rating agencies such as Moody's downgraded the debt of Brazil, Venezuela and Ecuador, while it sent up warning flares about Argentina and Mexico.
The Malaysian government exacerbated concerns when it launched what was widely viewed as the political persecution of one of that country's leading voices for economic reform. If Russia and Malaysia could balk at reform, investors wondered, what might happen in Latin America?
Brazil was suddenly hemorrhaging more than $1 billion a day. The country's foreign reserves dropped from $75 billion in mid-August down to around $48 billion last week. As the cash drain continued, the fear grew that Brazil would be unable to meet its debt obligations.
Foreign investors feared Brazil used all its bullets against the enemy a year ago, said Carl Ross with Bear, Stearns & Co. in New York.
Again, Brazil raised interest rates to nearly 50 percent. For ordinary Brazilians in that country of 160 million, such interest rates mean many large purchases are simply beyond their reach.
Because the interest rates are now at almost 50 percent, customers won't buy on credit any more, said José Umberto, who owns a car dealership in Rio de Janeiro. We expect sales to drop soon if the crisis continues. There already has been a change in mentality. People are thinking about their finances with more care.
Many Brazilians are more fearful of a devaluation of the currency -- the real -- and a return of inflation, which a few years ago was galloping at a pace of 50 percent a month.
I believe there will be a devaluation, and I will lose out, said Rio publicist Amilton Motta Filho. I bought a brand new car four months ago in dollars. If the real falls by 20 percent against the dollar, my fixed-rate monthly installments become 20 percent more expensive. My family will really start to feel the pinch.
World leaders concluded they had to act to help protect Latin America.
Clinton, citing the worst financial crisis in half a century, called for a meeting of finance ministers and central bankers from the industrialized nations to address the crisis.
Brazil, because of its dominance in the region, was chosen as the battleground. The IMF began discussions with Brazil about a possible bailout, while the Inter-American Development Bank organized its own loan package.
Many investors, however, remained skeptical that, after pumping billions of dollars into Asia and Russia, the IMF has the wherewithal to handle a Latin crisis. The U.S. House has only added to that wariness by refusing to provide additional funding for the IMF.
On Wednesday, Brazilian President Fernando Henrique Cardoso unveiled a plan to raise taxes in an effort to curb the country's deficit.
U.S. Treasury Secretary Robert Rubin and investors around the world applauded the political courage of that announcement, coming just days before the Oct. 4 presidential elections in Brazil.
That same day, U.S. Federal Reserve Chairman Alan Greenspan signaled the Fed's willingness to lower interest rates.
Cardoso, Rubin and Greenspan bought Brazil some time, said one Clinton administration source. And by buying Brazil some time, they probably buy some time for the entire continent.
Other Latin governments also have responded to the crisis. Mexico, Colombia and Venezuela all have announced budget cuts. The Mexican stock market has rebounded in the last couple of weeks, while the peso has regained some ground.
Venezuela, whose revenues have been clobbered by low oil prices, has promised to cut expenditures by a whopping 30 percent. But with fears of a possible military coup there rising, Venezuela is adding to jitters.
As the crisis in Latin America continues, investors point out that economic times are far different from the time of the Mexican peso crisis, when the United States and other nations were enjoying boom times.
Several Asian economies have been in recessions, if not depressions, for more than a year. And the ill effects of the economic problems are starting to affect the U.S. economy.
Moody's warned investors recently that the downturn in the emerging markets may last far longer than the peso crisis. And the longer the turmoil drags on, the greater the risks become. - Date: Mon Sep 28 1998 01:38
tolerant1 (calling all clones...if you could...please contact the fin that shares...email id given) ID#31868: - at a moments notice if you do not already have it...having problems with computer...everyone I have not been able to contact in the massive storm area...I am trying to contact you and hope all is well...Namaste'
- Date: Mon Sep 28 1998 01:32
sharefin (Hedge Hogs) ID#284255:
- - http://www.mises.org/default.asp
Losses are an integral part of the capitalist process. But you wouldn't know it from the way some big boys are treated on Wall Street. It seems that if your losses are big enough, and your connections good enough, you can get a permanent line of credit to shield you from the consequences of your mistakes.
The new rule is gleaned from the treatment afforded to Long-Term Capital, a hedge fund that seemed to be consistently beating the odds. It specialized in investing borrowed money in a complex array of very risky financial instruments around the world. Because the firm was also run by two Nobel Prize winning economists, its activities enjoyed the aura of science.
There was also a record of accomplishment. In 1995, the fund returned 43 percent after fees, 40 percent in 1996, and 17 percent last year. By early 1998, it managed $4.8 billion, but by the end of summer, the value of its positions shot up to $125 billion. It accomplished this astounding feat by borrowing to the hilt. It all turned sour in September, when bad bets in the bond market led to an avalanche of margin calls that threatened to plow the firm under.
There's a valuable lesson to be learned here. It is that the market economy gives high returns only to those who are willing to take high risks on the downside as well. The art of entrepreneurial investing consists, not only of taking risks, but also of tempering one's enthusiasm for high returns with an awareness that the future is always uncertain, even to the experts.
But thanks to intervention by the Federal Reserve Bank of New York, this lesson will go unlearned. The Fed worked with Merrill Lynch, J.P. Morgan, Travelers, and others to put together a collection of investment houses that ponied up $3.5 billion to keep Long-Term Capital from going under. It's not being called a bailout because the Fed' s arm-twisting did not involved committing its own resources.
Plain language is out of fashion, but there's still good reason to call this a bailout in the way regular Americans would use the term. For the weeks prior, the firm had sought an infusion of credit by approaching anyone who would listen. But it found no takers. Both Warren Buffet and George Soros, for example, told the firm to take its margin calls and dunning letters and hit the road.
You can't blame the firm for trying. When the bank is coming for your house, you're glad to stand on the roof crying out for last-minute assistance. But when help doesn't arrive, it suggests that the community of lenders has decided that your judgment cannot be trusted. Similarly, the market decided not to take on Long-Term Capital's risks as its own. People decided that loanable funds have better uses.
But the Federal Reserve is no ordinary market player. It possesses the singular power of buying and selling debt with new paper money it can create out of thin air. By cobbling together a host of reluctant bailers, it was implicitly committing its own resources, and saying, in effect, This hedge fund is too big and too important to fail. By helping it, you help yourself.
What lesson does that impart? Not the capitalist one. Instead, it says to other shaky firms that if they take big enough risks with their capital, and their services are regarded as indispensable to the market, they too stand the chance of having their bills paid with other people's money. They win on the upside; others lose on the downside.
It just so happens that one of the partners at Long-Term Capital is David Mullins, Jr., former vice chairman of the Fed. Might that fact have something to do with the manner in which the failing firm garnered unprecedented access to the Fed's good offices? This is no way to run a financial system. It smacks of the crony capitalism the U.S. denounces in Asia, whereby bad bets are protected from exposure to market forces simply because they were made by well-connected gamblers.
Two other partners of the firm are Robert Merton and Myron Scholes, who nabbed the Nobel Prize for their work in financial instruments. Some of us were happy about that prize because it suggested the committee was being attentive to the nuts and bolts of finance rather than high-flown schemes for central management of economies. Their formulas made it possible for traders to more efficiently calculate prices for complex financial instruments.
But did someone actually think that Merton and Scholes were involved in real science rather than art by statistics? That the quantitative patterns they found in history made it possible to anticipate the future without having to resort to judgment and instinct? A fortune teller with a 200 IQ, a prestigious prize, and a fast computer is still no more or less than what he is.
The beauty of the free market is its built-in sorting mechanism: good judgment is rewarded and bad judgment is punished. That's why the system tends toward efficiency. Bailouts dramatically change the character of the system, exalting losers over winners and turning high risks into sure bets that we all pay for in the long run.
* * * *
Llewellyn H. Rockwell, Jr., is president of the Ludwig von Mises Institute in Auburn, Alabama.
* * * *
Addendum: This letter is making the rounds among less fortunate investment houses:
Open Letter to the Fed
September 24, 1998
Messrs. Alan Greenspan and William McDonough
Board of Governors Federal Reserve System
Washington, DC 20551
Gentlemen:
It was with great pleasure that we read in this morning's Wall Street Journal of your decision to help alleviate the unfortunate and unnecessary loss incurred by the investors and creditors of Long Term Capital Management LP. The rapid and unforeseen decline in global markets has made it hard for all of us to master this universe. Your decision to intervene yesterday will certainly help Long Term Capital raise the funds necessary to buy into this unusually large dip. Americans everywhere are thankful for having such a thoughtful and forward-looking Federal Reserve System.
We are writing you to inform you of our own investment losses of late ( though, most unfairly, our losses have not been on the cover of BusinessWeek ) . The following is a list of reasons for this loss, which, we think, is not unlike that of Long Term's:
We owned a large sum of derivatives, fully convinced of the smooth and continuous pricing of the markets. Our blind faith in Black Scholes models remains intact. Our models are perfect. It is the market's fault for not following them, not ours.
We were clueless regarding the nature of gamma risk. We are still a little fuzzy on this.
We have never lived through a bear market, nor do we think we need one now.
We have never read anything written by Nicolai Kondratieff, Sidney Homer, Benjamin Graham, Alexander Dana Noyes, Robert Rhea, Ralph Elliott, or anyone else with a sense of history. History is a waste of time.
We invested heavily in junk bonds, especially those issued by countries which cannot be located on a map by our crack research department. We never understood why people called them junk to begin with.
We think you're doing a great job, and we think you'll cut rates ( wink, wink, nudge, nudge ) . We think this will be pure gravy for all of us, and we can't wait to buy more junk bonds on margin.
Enclosed you will find a more detailed list of our losses since mid-summer. Please enclose your check ( payable to TheGreaterFool.com LLC ) in the self-addressed stamped envelope provided.
Sincerely,
TheGreaterFools
P.S. Do you have the IMF's address?
Enclosures
Cc: Mr. David Komansky, chairman, Merrill Lynch & Co.
Mr. Sanford I. Weill, chairman, Travelers Group
Mr. Jon Corzine, senior partner, Goldman Sachs & Co.
Mr. Douglas Warner, chairman, J. P. Morgan & Co.
Mr. John Merriwether, general partner, Long Term Capital Management LP - Date: Mon Sep 28 1998 01:09
Johan (Maybe LTCM short a lot of gold but not a loss yet! because they shorted at 300.2) ID#253288: - joey two-cents ( LTCM ) ID#254187:
I usually post over at SI and am posting here at Kitco for the 1st time. I've got it on good authority that LTCM was not short gold. Most of their losses were from going short US treasuries and going long UK gilts.
Right? - Date: Mon Sep 28 1998 01:06
snowbird (A site that has been accurate in the past) ID#220325: - If they are on the mark this time Sept. 30th should be very interesting.
http://tiger.golden.net/laird/TimeSPX.htm - Date: Mon Sep 28 1998 00:53
sharefin (SDR - Sun Tzu ) ID#284255: - What does he have to say about?
*** Peace, Love, Flowers and Brown Rice ***
Or is he only perfected in aggression?
I guess he/I was brought up in another era. ( :o- ) ) )
- Date: Mon Sep 28 1998 00:46
sharefin (Gold - Platinium monthly charts with ratio spreads) ID#284255: - http://www.cairns.net.au/~sharefin/Markets/GldPlat.jpg
- Date: Mon Sep 28 1998 00:29
Gianni Dioro (German Elections) ID#384350: - Now that Traitor Helmut Kohl is out of office, will the German people be given a referendum for Single Currency and thus their national sovereignty?
- Date: Mon Sep 28 1998 00:27
Shadowfax (Japan...Banks to get bond loans) ID#290281:
Copyright © 1998 Shadowfax/Kitco Inc. All rights reserved - Monday September 28 1998
Banks to get bond loans
REUTERS
The Japanese Government is planning to lend government-held US Treasury bonds to domestic banks as one of its emergency measures to ease difficulties in raising US dollars overseas.
Banks, which will borrow the bonds without collateral at low interest rates, would be able to receive dollar loans from foreign institutions by using the Treasury bonds as collateral, sources said.
Japan's financial instability has led more foreign banks to charge the Japan premium - the extra interest Japanese banks have to pay on funds raised overseas - or made them reluctant to extend dollar loans to Japanese banks.
The plan is aimed at reducing the premium and boosting the Japanese stock markets.
- Date: Mon Sep 28 1998 00:22
gagnrad (Randomwalker, not to fear! Plus debt URL) ID#43460: - Just join your local Demokratic party and tell them you want to do it for the children.
Here's a link to the Debt Clock. IMHO AG has GOT to cut interest. If he ever lets productivity fall more than a percent or two they'll have to meet payments on the debt by selling banker's hides. Come to think of it bankers might make nicer boots than lizards and ostriches. ( %-^& )
http://www.brillig.com/debt_clock/ - Date: Mon Sep 28 1998 00:22
Auric (Open-loop) ID#240288: -
SI-- http://www.techstocks.com/ - Date: Mon Sep 28 1998 00:20
Envy (Wish in one hand.) ID#219363:
Copyright © 1998 Envy/Kitco Inc. All rights reserved - My hope, though I'm less convinced than ever, is that the FED will remain steady and not lower rates for now. One of Greenspan's worries, I remember very clearly when he said it, is that in this atmosphere of easy credit, banks are out there making huge numbers of bad loans, giving credit to people that won't be able to come clean when and if the economy slows down. The reason I hope that the FED doesn't lower rates is that I'm worried about that too - and I can't see fighting off a global slowdown, even a possible global recession, with lower rates and easy money, it just doesn't make any sense. Sure, it'd be a nice little pop for the stock market, but who cares, it's like handing out pain killers to cancer patients, it's nice, but it isn't helping anything. I honestly believe that if we're facing a slow-down, that is, foreign customers aren't going to be buying as much ( regardless of a strong dollar ) , then handing out easy loans on the street corner is the worst thing the FED could start doing - it's just going to make things worse later. So say'eth Envy, but I seem to be standing alone.
- Date: Mon Sep 28 1998 00:19
SDRer (Preparing for the weeks ahead...) ID#290172:
Copyright © 1998 SDRer/Kitco Inc. All rights reserved -
THE ART OF WAR
by Sun Tzu
All warfare is based on deception. Therefore, when capable of attacking, feign incapacity; when active in moving troops, feign inactivity. When near the enemy, make it seem that you are far away; when far away, make it seem that you are near. Hold out baits to lure the enemy. Strike the enemy when he is in disorder. Prepare against the enemy when he is secure at all points. Avoid the enemy for the time being when he is stronger.
If your opponent is of choleric temper, try to irritate him. If he is arrogant, try to encourage his egotism. If the enemy troops are well prepared after reorganization, try to wear them down. If they are united, try to sow dissension among them. Attack the enemy where he is unprepared, and appear where you are not expected. These are the keys to victory for a strategist. It is not possible to formulate them in detail beforehand.
Know your enemy and know yourself; in a hundred battles, you will never be defeated. When you are ignorant of the enemy but know yourself, your chances of winning or losing are equal. If ignorant both of your enemy and of yourself, you are sure to be defeated in every battle. Skillful warriors in ancient times first made themselves invincible and then awaited the enemy's moment of vulnerability.
http://www.ccs.neu.edu/home/thigpen/html/art_of_war.html#Waging_War
Got it? OK, we're ready.
Goodluck & Goodnight
- Date: Mon Sep 28 1998 00:17
mole (rate cut BCIWN) ID#350145: - i agree. AG is caught in a dilema. if he cuts .25 the markets will be dissapointed and it may not be enough. if he cuts .50 market is happy, but AG may fear he is broadcasting danger. guess i will now guess .25 and a total of 3 syncronized cuts of .25 - unless all hell breaks lose.
- Date: Mon Sep 28 1998 00:16
EJ (G'Nite) ID#45173: - Ought to be an interesting day tomorrow. Sweet dreams.
-EJ - Date: Mon Sep 28 1998 00:14
EJ (Envy) ID#45173: - The Fed will lower rates. AG's effectively promised as much. The question is how much. 1/4 is about right. New corp. sectors are joining the ranks of lower earnings forcasters, esp. those taht depend on capital spending. To the extent that corps buy from other corps with borrowed dollars, the decrease may help. When money gets cheaper, retailers can take more inventory, for example. So dropping rates fuels stuffing the channel as they say in the biz. The benefits might show up right away on the earnings side.
But that's just a small piece of the puzzle.
-EJ - Date: Mon Sep 28 1998 00:12
Randomwalker (gagnrad) ID#409232: - And I had my heart set on being a school janitor too! Clinton has his own troubles... :- )
sigh - Date: Mon Sep 28 1998 00:11
Midas (Hi All) ID#346404: - Bill is surviving All, I was away for a while, if anyone knows me
- Date: Mon Sep 28 1998 00:11
mole (weak yen) ID#350145: - i think the yen is staying weak just because japan is in such bad shape. everybody seems to keep looking for a rise in the yen and the market seems to keep saying, you have got to be kidding. i could be wrong though this isn't really my bag.
- Date: Mon Sep 28 1998 00:10
Obsidian (TheMissingLink: ) ID#237299: - Rio Grande has a pretty cool looking cad/cam setup that appears to do quite intricate waxes. Latest tool catalogue.
- Date: Mon Sep 28 1998 00:07
BCIWN (@Mole) ID#206298: - If they do cut it 1/2%, then I think AG is saying global kimshee is very deep indeedee!!
- Date: Mon Sep 28 1998 00:02
gagnrad (themissinglink so true!) ID#43460: - You know if man is an alleged sex criminal he can't be a teacher's aid or school janitor in my state. So they let the dewd be prezz? In a fair world he should have trouble finding a minimum wage job. Hey, baby, want to give your all for the Demokratic party?
BTW, water is rising! I expect to be sitting in a treetop by this time tomorrow unless the hurricane changes course! Have you ever wondered who names hurricanes? It's clear to see they aren't from around here, else this thing would be named Gump, not Georges!
( 8-^ ) ) - Date: Mon Sep 28 1998 00:00
ChasAbar (Mike Sheller,) ID#340344: - I think youse guys have a great idea to make 10-grain gold coins. I'd like to suggest that you give the coin a larger diameter, and put a hole in it so it can be strung, just like in the old, old days, and then we can give it a nickname, uhh, let's see, now... how about Lifesavers?
