Gold
- Thread starter goodguy1977
- Start date
Symbol "DIA". JUST KIDDING!How do you trade diamond in stock market?
A few options are mentioned here:How do you trade diamond in stock market?
http://finance.yahoo.com/news/diamond--investor-s-best-friend--182807971.html
good info, but still have to wait for the physical diamond trust fund to come out. buying miners and jewlers isn't really the same. just look ABX and GLD difference in gold.A few options are mentioned here:
http://finance.yahoo.com/news/diamond--investor-s-best-friend--182807971.html
Momentum is being built in the gold mining sector for a stunning comeback
in the coming months. Could be my wishful thinking. One has to be very cautious
with the choice of stocks--you shouldn't just pick any stocks--to profit from the
impending rally. A rule I follow is I'd only stick to stocks that have managed to
rise and stay above its April high. For instance I had to give up on Richmont Mines
seeing that its May high is well below its peak stock price in April. The stock
is indeed tempting at its current price which is well below its net asset value.
But I've learned from years of stock trading that it is better to overpay for
quality rather than to underpay for an oversold stock.
in the coming months. Could be my wishful thinking. One has to be very cautious
with the choice of stocks--you shouldn't just pick any stocks--to profit from the
impending rally. A rule I follow is I'd only stick to stocks that have managed to
rise and stay above its April high. For instance I had to give up on Richmont Mines
seeing that its May high is well below its peak stock price in April. The stock
is indeed tempting at its current price which is well below its net asset value.
But I've learned from years of stock trading that it is better to overpay for
quality rather than to underpay for an oversold stock.
Meanwhile crude oil is threatening to challenge $100. A gold/oil ratio of less than
15 is bullish for gold IMO. I think oil is anticipated by the market to fall back to $70
in the near term which I guess is possible if Iran sanctions are lifted. If oil remains
at its current level for extended period gold could shoot back to above $1500.
Global economy is in my view too fragile to withstand $100 oil. An oil price spike
to beyond $120 could easily trigger a devastating downturn which might drive gold higher depending on whether the recession is inflationary or deflationary.
15 is bullish for gold IMO. I think oil is anticipated by the market to fall back to $70
in the near term which I guess is possible if Iran sanctions are lifted. If oil remains
at its current level for extended period gold could shoot back to above $1500.
Global economy is in my view too fragile to withstand $100 oil. An oil price spike
to beyond $120 could easily trigger a devastating downturn which might drive gold higher depending on whether the recession is inflationary or deflationary.
Hi there,I think its a good buying opportunity, the fed can't let interest rate go up and how are they going to pay for interest on their debt.
I'm not sure how familiar you are with interest rates but the fed can only really control the short term, medium and long end are much more difficult to control. Gold is generally traded on technical factors, if you look at the chart it's a broken trade.
Goodguy
http://wallstreetexaminer.com/2013/...treasuries-sell-off-but-theres-a-lesson-here/
The Fed is Not To Blame This Time As Treasuries Sell
Off, But There’s a Lesson Here
Lee Adler
June 18th 2013
Lately the Wall Street and media noise machine has taken up the Fed bashing bullhorn in conjuring a “reason” to explain the recent selloff in Treasuries. In fact, the Treasury market has been in a bear market for almost a year, with yields making higher lows and higher highs since last July. Admittedly, the Fed’s disjointed, multivoiced, multimode elephantine dungheap of a communications policy has had the effect of confusing both the punditocracy and big mahoff investors. But I don’t think that that’s the main cause of the turn in the bond market from bull to bear.
In my view, the primary impetus for that turn is that the giant banks who get funding from the ECB–which means essentially all the multinational market behemoths– are rushing willy nilly to repay hundreds of billions in ECB loans. These largely include the massive emergency loans made under the LTRO program in late 2011- early 2012. The ECB had given hundreds of billions of these loans with a 3 year term, with an option to repay after one year.
A few of the banks did not want those loans in the first place, but the ECB shoved them down everyone’s throat so that the banks who really did need them would not be stigmatized. This is the “theory of collective guilt” that central banks apply when forcing emergency funding into the world’s banking system. The central banks don’t want to call attention to which banks are stronger and which are weaker. All must be seen as equal. Equally shitty.
Being forced to take these funds, some of the banks decided to park a portion of them in US Treasuries, thereby collecting the spread – free money for the banks. In the process of loading up on that paper to set up this carry trade they drove yields to all time lows in July of 2012. Based on the promise of low yields from the central banks, some of those banks took on additional risk by going out longer on the yield curve.
Suckers.
Meanwhile, the few “smart money” bank money managers were beginning to take advantage of that.
While some banks were loading up on Treasuries in the final buying orgy last summer, other banks began slowly paying down shorter term ECB loan programs. They were apparently getting a head start on the deluge of repayments they knew would be coming, because they themselves had planned to do the same as soon as that one year repayment window opened in January 2013. Take the carry for a year and get out while the gettin’ was good. The banks that had used some of the original loan funds to buy Treasuries would need to liquidate that paper (or something else) in order to repay the ECB and close the books on their short term carry trade.
That is exactly what happened and is happening. Banks are aggressively selling the Treasuries and other paper that they had bought with the LTRO funds to pay down the LTRO loans. Lately they have been forced into a bit of a panic– a long squeeze–to do so. Carry trade losses are mounting, and so is the selling in the Treasury market.
At the same time, rising yields send a signal to the dumb smart money to buy stocks, leading to the final blowoff of that bubble. But this shrinkage of the ECB balance sheet is making the bubble blowing jobs of Ben (Bernanke) and Abe (Nomics) jobs much harder as they continue to pump QE funds into the same banks, but that’s a story for another post.
So it would appear that the Fed is not entirely to blame for the bond market dislocation, neither for the final blowoff of the that market in mid 2012, nor for the inevitable selloff that had to follow. No, Bernanke bashers (count me in as a card carrying member), it wasn’t Uncle Ben this time. It was Super Mario and friends at the ECB. The process of the banks sloughing off those unwanted ECB loans and disposing of the underlying assets while frantically attempting to delever and derisk their balance sheets is what is sending Treasury yields soaring.
There’s no end to that in sight. The Fed is probably constrained from buying enough paper to compensate for this wave of liquidation. Tomorrow it will only add to the confusing and contradictory messages that it has been sending, regardless of what it says. I don’t think that the bond market will be soothed for very long, regardless of what the Fed says.
Finally, put this in your pipe and chew it. A similar process is going on with the Fed and BoJ’s QE programs, which are targeted at stock prices. The banks are in some cases buying stocks as a parking place for that money, although unlike the ECBs’ LTRO, the Fed’s QE is open ended and outright cash purchase funding with no finite end date. Playin the Fed’s game has been so much easier. But as with the repayment of the ECB loans the underlying assets would get sold if the Fed ever tried to unwind QE. That would lead to a violent reaction in the opposite direction of the bubble that has grown out of QE.
I think that Dr. Evil, Ben Bernanke, may have checkmated himself. Taperophobia is not an irrational response.
The Fed is Not To Blame This Time As Treasuries Sell
Off, But There’s a Lesson Here
Lee Adler
June 18th 2013
Lately the Wall Street and media noise machine has taken up the Fed bashing bullhorn in conjuring a “reason” to explain the recent selloff in Treasuries. In fact, the Treasury market has been in a bear market for almost a year, with yields making higher lows and higher highs since last July. Admittedly, the Fed’s disjointed, multivoiced, multimode elephantine dungheap of a communications policy has had the effect of confusing both the punditocracy and big mahoff investors. But I don’t think that that’s the main cause of the turn in the bond market from bull to bear.
In my view, the primary impetus for that turn is that the giant banks who get funding from the ECB–which means essentially all the multinational market behemoths– are rushing willy nilly to repay hundreds of billions in ECB loans. These largely include the massive emergency loans made under the LTRO program in late 2011- early 2012. The ECB had given hundreds of billions of these loans with a 3 year term, with an option to repay after one year.
A few of the banks did not want those loans in the first place, but the ECB shoved them down everyone’s throat so that the banks who really did need them would not be stigmatized. This is the “theory of collective guilt” that central banks apply when forcing emergency funding into the world’s banking system. The central banks don’t want to call attention to which banks are stronger and which are weaker. All must be seen as equal. Equally shitty.
Being forced to take these funds, some of the banks decided to park a portion of them in US Treasuries, thereby collecting the spread – free money for the banks. In the process of loading up on that paper to set up this carry trade they drove yields to all time lows in July of 2012. Based on the promise of low yields from the central banks, some of those banks took on additional risk by going out longer on the yield curve.
Suckers.
Meanwhile, the few “smart money” bank money managers were beginning to take advantage of that.
While some banks were loading up on Treasuries in the final buying orgy last summer, other banks began slowly paying down shorter term ECB loan programs. They were apparently getting a head start on the deluge of repayments they knew would be coming, because they themselves had planned to do the same as soon as that one year repayment window opened in January 2013. Take the carry for a year and get out while the gettin’ was good. The banks that had used some of the original loan funds to buy Treasuries would need to liquidate that paper (or something else) in order to repay the ECB and close the books on their short term carry trade.
That is exactly what happened and is happening. Banks are aggressively selling the Treasuries and other paper that they had bought with the LTRO funds to pay down the LTRO loans. Lately they have been forced into a bit of a panic– a long squeeze–to do so. Carry trade losses are mounting, and so is the selling in the Treasury market.
At the same time, rising yields send a signal to the dumb smart money to buy stocks, leading to the final blowoff of that bubble. But this shrinkage of the ECB balance sheet is making the bubble blowing jobs of Ben (Bernanke) and Abe (Nomics) jobs much harder as they continue to pump QE funds into the same banks, but that’s a story for another post.
So it would appear that the Fed is not entirely to blame for the bond market dislocation, neither for the final blowoff of the that market in mid 2012, nor for the inevitable selloff that had to follow. No, Bernanke bashers (count me in as a card carrying member), it wasn’t Uncle Ben this time. It was Super Mario and friends at the ECB. The process of the banks sloughing off those unwanted ECB loans and disposing of the underlying assets while frantically attempting to delever and derisk their balance sheets is what is sending Treasury yields soaring.
There’s no end to that in sight. The Fed is probably constrained from buying enough paper to compensate for this wave of liquidation. Tomorrow it will only add to the confusing and contradictory messages that it has been sending, regardless of what it says. I don’t think that the bond market will be soothed for very long, regardless of what the Fed says.
Finally, put this in your pipe and chew it. A similar process is going on with the Fed and BoJ’s QE programs, which are targeted at stock prices. The banks are in some cases buying stocks as a parking place for that money, although unlike the ECBs’ LTRO, the Fed’s QE is open ended and outright cash purchase funding with no finite end date. Playin the Fed’s game has been so much easier. But as with the repayment of the ECB loans the underlying assets would get sold if the Fed ever tried to unwind QE. That would lead to a violent reaction in the opposite direction of the bubble that has grown out of QE.
I think that Dr. Evil, Ben Bernanke, may have checkmated himself. Taperophobia is not an irrational response.
lol not sure how familiar your are with interest rate but we all know the Fed can control it by buying or selling securities. If the Fed wants to raise interest rates, it sells securities. This adjusts the federal funds rate which is what banks charge one another for short-term loans. The Fed can also adjust the discount rate, which is the interest rate it charges banks for loans obtained directly from the Federal Reserve.Hi there,
I'm not sure how familiar you are with interest rates but the fed can only really control the short term, medium and long end are much more difficult to control. Gold is generally traded on technical factors, if you look at the chart it's a broken trade.
Goodguy
Hi there,lol not sure how familiar your are with interest rate but we all know the Fed can control it by buying or selling securities. If the Fed wants to raise interest rates, it sells securities. This adjusts the federal funds rate which is what banks charge one another for short-term loans. The Fed can also adjust the discount rate, which is the interest rate it charges banks for loans obtained directly from the Federal Reserve.
You've got part of it, but the medium and long term curve is due to market factors. The fed does not have enough money to influence that part of the curve. Buying/selling fic/mbs securities only temporarily influences the short end of the curve.
We would respectfully disagree. But if you still believe they can control the entire yield curve we could arrange for you to purchase a ton of long duration bonds at a slight premium.
Goodguy
I'm not sure if you trade bonds on the secondary market, that would give you a much better feeling of interest rate drivers.lol not sure how familiar your are with interest rate but we all know the Fed can control it by buying or selling securities. If the Fed wants to raise interest rates, it sells securities. This adjusts the federal funds rate which is what banks charge one another for short-term loans. The Fed can also adjust the discount rate, which is the interest rate it charges banks for loans obtained directly from the Federal Reserve.
Goodguy
I'm sticking with my juniors that have quality properties, proven management and a lot of cash in the bank. At some point these small companies will be bought out at prices a hell of a lot higher than they are now. Just have to be patient and not worry about bad days in the market.
The fEd does not in any way control the yield curve structure, it is set by about 12 macro hedge funds in NYC and London, and a few institutional investors like PIMCO and Blackrock who manage to achieve significant alpha.
The Goldmans and Morgan Stanleys etc are involved as well but they dont go out as long on the curve as they used to. The FEDS hands are tied, it is a net buyer of shitloads of paper at the minute, 0ver 80% of the most recent UST auctions. Unprecedented territory!
The Goldmans and Morgan Stanleys etc are involved as well but they dont go out as long on the curve as they used to. The FEDS hands are tied, it is a net buyer of shitloads of paper at the minute, 0ver 80% of the most recent UST auctions. Unprecedented territory!
Barrick just announced a 30% cut in their head office staff. Times are tough in the gold sector and higher interest rates won't help.
