Archive - Jul 5, 2011 - Story

Gold is higher today and showing particular strength against the euro and the Japanese yen. The relief rally seen in equities since the latest Greek ‘bailout’ is under pressure as S&P have said the debt rollover proposal would be a “selective default”. The ECB may selectively reject the S&P Greek downgrade and arbitrarily select the best credit rating being offered. Gold has been supported in the traditionally weak “summer doldrums” period due to institutional demand and strong physical demand at the $1,500/oz level, particularly from Asia. Gold tends to take a break in October and then has a second period of seasonal strength from the end of October to the end of December. This has been primarily due to Indian religious festival, store of wealth, demand in the autumn and western jewellery demand prior to Christmas.

The best thing to ever come out of RBS is back in its original format, now that Bob Janjuah has decided to begin releasing Bob's World again, if not with the unique trademarked grammatical style. That alone must be worth 95% of the intangible, and thus all, assets on RBS' balance sheet. To those who read just the first few paragraphs and are left scratching their heads if Bob was lobotomized in recent weeks and now sees nothing but upside, so contrary to his usual cheery disposition, we suggest reading on - that is merely his outlook for the short-term. The long one: "my view beyond July/August is bearish and very much risk-off. In late Q3/Q4 2011 I expect to see the beginnings of a meaningful sell-off in global risk which should take the S&P below 1220 and on its way possibly to the low 1000s. In this risk-off move I would expect – initially at least – USD to rally sharply, with the DXY index closer to 80 than 75, and major DM government yield curves to bull flatten, with 10-year UST yields falling to around 2.5%. Credit spreads should widen, but I expect non-financial corporate credit to outperform in relative terms. Having said that, in this major risk-off phase I still expect the iTraxx Crossover index to rise well above 500. And commodity weakness should be a major part of this late-2011 serious risk-off phase." Ah yes. Good old Bob.

It is no secret that Zero Hedge holds a special place in its heart for everything, ruler most certainly inluded, Birinyi-related. Which is why we learned with substantial amusement that the site of the Hungarian and his merry chartist men has been violently defaced as of this morning by !-Bb0yH4cK3r_Dz-!, which appears to be a brand new outfit unrelated to Operation_Anon or any of the other hacker collectives now running around taking down sites with impunity. The text on the new website is: "FuCk U Admin I' Am SuPeR MaN :) I ' M , Muslim Don ' t Panik. GiFt From AlGeRiAn HaCkeR To GaZa ChIDrEn !!!" This is probably not the way Birinyi was hoping to celebrate the S&P hitting 4,000+ by the end of the year at the current rate of market meltup.

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