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Black Friday? Fighting the Bubble One Default at a Time
A brutal risk selloff as Dubai seems to have sparked the "sudden" realization that, you know, stimulus just ain't going to do it all.
Sovereign CDS spreads have been widening since the news, rescheduled conference calls did little for investor confidence and U.S. equity futures have crashed (midnight ET was exciting!) on the order of 4% with crude futures down 5%. Treasury futures have spiked in inverted sympathy (flight to safety). Spot gold, which was as high as $1191 hours ago has sunk to ~$1140, all metals appear to be mimicking the behavior with London Lead down over 8%. Japan has is expected to intervene following the Yen's 14 year high mark. The Swiss National Bank is rumored to be intervening continually to un-defend the Swiss Franc. Quite a morning so far, and it's just beginning.
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I may not go to bed just yet.
I've got some wine here.
And your cats. LoL. The imagery.
Thanks for this thread so that those of us who are freaking can freak together.
No need for freaking. You're dealing with control freaks trying to control the uncontrollable. Send them all you're pain. All your dis-ease. Remeber everytime your car broke down. Everytime you worried about being able to pay a bill. Every bad thing that has ever happened in your life till they drown in the deluge of trouble and hardship and learn to share control.
Watch out below! LOL
Gold is now a risk asset. Cool. Who woulda thunk?
Ummm... Prechterites?
Sinclair has repeatedly warned about margin in this environment. How many years ago did Sammy sing "Paper Money"?
I play the game of a rich boy,
I buy everything I can.
My bankroll is a foot thick,
I'm a wealthy man.
A million dollar reserve note is right there in my hand
And I can't stand to think...it's all that I've got.
Take away all my silver
Take away all my gold
And hand me a stack of paper
Paper money don't hold. Paper money don't hold.
Well, you act as though you don't remember
The way it all used to be.
Now one man, he locks up the money
Another man holds the key.
Dow, PM, and dollar ugliness is pulling back a tiny bit.
Jeezus. I sound like Kudlow.
Really would like to know who just dumped all that gold.
(*edit: or if it's just a currency related thing.)
If I had any money I would be tempted to buy more. (Easy for me to say.)
Wish I had more expertise as I answer this, but two things come to mind:
1. Dubai is triggering stuff and folks need cash so that they can pay out on the default insurances.
2. Folks are freaking and the "carry trade" is starting to unwind.
I may be a fool, but I am sticking with my thesis on the gold/silver front: Strong hand. This shit will spin and wobble and after the dust settles, I think folks will pile into commodities and run it back up.
I feel you're right. I was just expecting a spike in the dollar to go along with a tumble in gold though. Maybe that's a little ways off yet.
I think the lack of the spike (or proportional spike, buck is up a bit from the 74.somethings) is good news. If gold has its own response separate from the dollar, we know that gold is going up because folks are looking to it for safety, as a response to either the theviery or incompetence of our governmental officials. This stuff is only going to get worse and folks will want shelter in something that has been doing the work as a store of value for, oh, like 6,000 years.
I am going to bed finally. No doubt I will miss some fireworks. Sleeping through Armageddon is not a bad idea.
Regarding "spikes in the dollar" I am under the impression that every morning here in Europe EUR/USD goes with the market (that's up, yet sometimes down). Then US 'markets' open and EUR/USD more or less undoes morning's move. Blatantly ignorant to the reasons beind, I guess some huge HFTs are moving from one market to the (pigtailing) other, with the resulting 'FX effects'.... Where's that guy Tobin?
As a result of constantly (should I say cravingly) checking gold price in € and $ for the last months, I don't feel like there is a direct relationship between gold and USD prices. Check it out, talking about feelings here!
The gold price HAS a direct relationship with the USD price due to increadible size of dollar carry trade. Not all of that liquidity speculates in the stock markets or bonds, bits of it are invested in gold with the hyperinflation story. Now as that unwinds from global markets, the price of USD goes up (not because of the stupid argument that it is a safe heaven--quite a few articles by BIS have been released on the shortage of USD, some referred here as well) but it also leads to buying gold due to fear, like last winter. That's why, I watch the price of gold in euros instead of in USD to get an idea of what is really happening. Whenever the price goes up only in dollars but more or less stable in euros, it is speculative buying. Whenever the price goes up more in euros than in USD, or falls less (though really rare recently) then it is fear. It has been a combination of two for the last 2-3 months, with the speculative effect dominating. This morning, it is the opposite. Fear has struck again. This is in fact good news for us the gold bugs...
Here is the statistical numbers about this, that most know very well anyway:
''Averaging almost +0.50 over the last 10 years, the daily correlation between gold and Euros vs. the Dollar shows a strong statistical significance, with the single currency and bullion typically moving together against the USD.
If the Euro and gold moved in lockstep, the correlation coefficient would stand at +1.0; if they always moved in perfect opposition, it would read -1.0.
The correlation between gold and Euros tends to decline when the single currency falls vs. the Dollar, turning negative during gold's strong bull runs of late 2005 and early 2009.''
FYI: Last time gold and silver went down like this Bear Sterns imploded.
Goldman Sachs dumped all that gold.
They gun the market 50 points at a time to shake out the retail investor.
As gold moves toward 2000, look for Goldman to gun the market for $100 -$150 one day swings.
Hold on tight or don't get on at all!
Remember people, keep shopping! Even if you don't have money. Even if you have bad credit! Keep shopping until the problems go away. Hooray for capitalism, our savior!
ROFL!!!!!
IMHO starve the beast... do not buy holiday gifts.
Have been hearing about others who have decided to rack up huge credit card debt (personal stimulus package per se) and plan to default on them plus jingle mail their home to the bank.
Personally, i vote to starve the beast and so will not shop for the holidays. If you want to be biblical like Jesus received from one of the three wiseman, get gold while it is right now at a discount.
"If you want to be biblical like Jesus received from one of the three wiseman, get gold while it is right now at a discount."
NEWSFLASH: Two out of three wisemen were wrong!
Local car dealer ad:
Bad credit? No credit? Not a problem we guarantee we can put you in a car today. 100% down and you roll. Bring the wife with you to pick one out and we will dicker.
Giddy up im excited...
Marketwatch story: http://www.marketwatch.com/story/gold-prices-climb-above-1190-on-globex-...
Reuters story: http://www.reuters.com/article/globalMarketsNews/idUSTRE5A80MQ20091127
Do not worry ,the US Markets open soon,they should solve all of these problems by noon.
Can someone please explain why the sell off in Gold. After I read the Dubai head line the first thing I did was go to see if Gold was spiking...but I saw the opposite. Apparently I don't "get" something. What is it? (I'm not a financials guy)
Take a look at what gold was doing last October when the shit was really hitting the fan and people were trying to deleverage out of all risk assets. This is what the gold bugs refer to as "temporary liquidation events" where, if you have piled all your life savings into it, you are supposed to just hold onto your butt and await the inevitable rocket shot TO THE MOON.
All forms of leverage and USD-denominated debt are in effect a short position on the U.S. dollar. If they contract, the dollar goes up and other assets (yes, including precious metals) go down. They may go down less than everything else, sure, but down they go.
After 10+ trading sessions at over 90% bulls on the DSI gold was LONG overdue for a major correction.
My point exactly, as expressed above and below. +100.
Where's all them Gold bugs at? Kind of quiet around here without all their racket.
First bug here...Watch POG bounce straight back up to $1200 & lets see what the S&P does when its knocked for six in a few hours time!
I was planning on buying gold and silver early in the morning Friday. Should i buy or will this trend continue until next week?
Buy NOW while it is at a 'discount'.
Done. Pulled me trigga, up now since locking in, now go sit by curb and wait for delivery man.
Santa commeth early.
Do you think anyone who really knew the answer to this would be reading and posting the answer on ZH?
Game of luck on when to buy, just like for the rest of us.
what are the chances that the timing of the dubai announcement was arranged so that the bullion banks could run this many stops on thanksgiving night?
There is just too much manipulation. The stock market is never going to go down in a big way again, no matter what. Everything will just go up forever, and nothing will ever make sense again.
This is just a head fake, knee-jerk reaction. In a day or 2 we will be back up to our steady irrational climb to infinity.
O.K.most frequent visitors here know things are realy bad and we are in another buble. But why the panic today,when in fsact ZH mentioned this on wednesday and in fact wrote"Sequential popping of bubbles to commence shortly". But I wonder why things deteriorated Thursday and not Wednesda?. And could that panick be socially engineered by our friends at (whatever their address is in NYC)on purpose,to make sure that gold crashes?. I think the gold mania hitting the U.S. through all kind of mediums,might produce the run on the bank that didn't happen last year. Because now the question is not whether your money is safe since it is guaranteed by the goverment,rather if the value of this money is safe. Now that is not guaranteed by the goverment.
At the moment it seems like gold is about to illustrate what a V-shaped recovery actually looks like.
Indeed, man!
Just true, just true! $1174.10
Are people finally waking up to the fact that gold is not money? That it is a yellow metal that sits denting the wood of your desk as the calls come in demanding cash to cover margin calls, CDS, etc? Here's what bugs me about the gold bugs. They scream to get out of $ and into gold but how are they ever going to realize a profit unless they dump the heavy stuff and get back into the worthless scrip exactly at the point when these dollars are worth their least? Stick it on the ponies. At least you'll get to watch a real live race with horsies instead of a scribbly line jumping up and down.
Gold isn't money if all you hold is a paper claim to it. You are deluded if you think somebody is selling the metal on their desk for a margin call. Only paper players get played. Why do you think they started accepting bullion for margin? Olivia Newton-John isn't the only one desperate to get physical.
The gold bugs are here of course. Remember, the increase in gold was related to two types of buying: Masssive liquidity not knowing to speculate in which market and the bugs as some call them waiting for a collapse. IMO, the dump in gold is related to urgent need in liquidity by one or some of the big boys before Monday. Now, it's time for the bugs to extend buying. The price will depend on who is stronger. I was sleeping, would have bought some at 1140 straight away..
The gold bugs are here of course. Remember, the price of gold was going up for two reasons: Massive liquidity looking for a place to speculate and gold bugs buying as they wait for a collapse of this sort at some point. IMO, the fall is related to one of the big guys in need of urgent cash. Now, the bugs will appear and start buying even more. The direction of the price in the short run will probably depend on who buys/sells more, as well as the delivery next week, and the now famous tungsten story. In medium run, for spring let's say, a quick look to last winter graphs for USD and gold should make it clear what is going to happen. I am keeping my gold, for the sunny days to come :)
In gold at $725 and silver at $9.50. What Me Worry?
Let's talk Turkey...Day, that is. Do we think it's a coincidence that this news began to break on the light volume day before T-Day in the US? And that more details came out on a day when US markets were closed? Clearly, the reality that Dubai, which has no oil, is de facto broke isn't news to its enlightened rulers...the question is whether our "ally" coordinated the release of the $80B debt restructuring with Timmy or Larry?
Just a thought... since 'exports' could be a bit of a lost duck for the tme beig; what if..the yen was allowed to appreciate -letting the japanese start resources-building, ? pennies..
If you don't have the physical gold in your hand - you only have a piece of paper - it looks like gold has gone fractional as well.
Wouldn't there be a massive selloff of gold on Monday in the US market? I think it has another 30-40$ more to go. What do you say?
There is only just over $4bn of Dubai cds outstanding...it's really not a big deal.
gold goldman goldstein goldberg, these are not biblical family names, at some point they were chosen, by some of the greediest people on the planet. gold is money, one of the few authentic forms, we'll see what a barbarous relic is in time. ( the fed, the dollar ) it won't be gold rothschild started out as a coin dealer
Well, today should be interesting with light trading and all, plus you know the PPT & the $PET are going to be bending over the proverbial tax payer today and issuing credit to any deadbeat nation needing a bailout (except of course the third world here in the states, i.e. detroit). Gold's bull run ain't over, but this correction back to 1100 or so is overdue.
I'm curious how the $ is back to barely above 75 again... wasn't it 76+ or did they cancel those trades too? Perhaps today will see our first market shutdown claiming light volume.
Don't you love it when she gets wet with excitement.
they'll find a way to prop it back up, it's a buying opportunity!
i am hoping it touches the 50 day MA ....currently 1065..
(Tim Taylor sound) Bluh?? It's already +$22 off the low. Doesn't look like you got the long side of the wishbone yesterday.
Europe is in the green
So is Toronto. Already today there's half the volume there was for the entire day yesterday.
TD Securities algos 'buying the dips'?
(They use the vampire squid's trading platform)
Actually, I like seeing an attempt to delever, now matter how pernicious -- this worldwide debtors prison needs to be burnt down.
Jubilee!!!!!!!!
Now wait, take that back. The Gold-man's of the world would lose power over all of us.
The original plan was to cause a dollar short squeeze to plunge the POG to around $500/oz to shake out all but the hardcore fans and where 'they' would load the boat. Dubai's little inconvenient truth has just adjusted that to (maybe) $7-800/oz. Just keep in mind that India's buying of the IMF gold stash is that much less physical that the western banks can use to manipulate delivery to maintain the facade (not that they had an easy job with the amount they had available). The CBs are painting themselves in a corner and until now, more difficult meant more spin to cover what is really happening. Later, as more physical has been absorbed by the easterners it will become a liability as the POG will have to be manipulated by futures and (eventually) endless plating of tungsten bars for the suckers buying paper.
Now the dollar short squeeze just got leveraged beyond the control of TPTB. Remember last week the 9% jump in $futures that got canceled? A repeat will be tough with the entire world watching.
Will be interesting to see what happens in the currency markets when the senior people return Monday. Remember, everything that happens today (Friday) is because of someone directing trades as the result of news they saw on their blackberry while at the (take your pick) football game, mall, family outing, etc. IOW, people who are reacting out of panic after getting a terse ass chewing from their fellow stakeholders on said blackberry while at above mentioned venue. Then toss in whatever great news they get from the 'black friday' sales figures Monday. This could get really fun. On the other hand, we may see GS earn all their bailout money if they can contain the bonus panic from the senior people come Monday.
Looks like the bottom is dropping out of silver prices again...gold to follow shortly
OHHHH so this is just an arranged slaughter of the dollar shorts/carry trade unwind again.
I can GUARANTEE you that GS is profiting from this in some huge way.
Guarantee it.
Remember that weird spike to 82 DIX on Monday?
ZH readers where speculating that was a dollar short killing 'error' that GS profited from somehow. Of course.
Yeahp.
Quentin Tarantino's next flick:
Kill Shorty.
Wish I had some cash. I would be buying gold like there was no tomorrow. Great opportunity. Sale is on.
check my comment @ 340am today....US markets should have all this solved by noon...Do not worry
maybe up(positive) by 1130 am what a joke
The Fed will eventually lose control of the POG, that will be the Rogue Wave that completely unhinges the financial system.
This is a paper trend. If someone will sell you their gold for this paper, do it.
Remember the paper price last year? It was $100 under the true spot physical price, IF you could find supply.
The Fed IS going to print into any deflation, bet on that. We either default or we inflate to functionally default. We ARE bankrupt.
IMHO?
In the green?
I'm loving this site, but what are these terms?
Usually I lurk until I can get this stuff from context, but I must come out of the closet and ask this time.
IMHO = In My Humble Opinion
In the green = positive change (vs. in the red, negative change)
Don't be afraid to ask; we're in such deep trouble precisely because we've got people in charge who think they know but don't.
trav777:
Totally agree. We are in default right now. There are only two ways we can default. We can handle this - the hard way or the easy way.
The hard way is to just do an Argentina or Russia. Just declare default. We won't do that b/c too much of our debt is held internally and there would be riots and disorder in the streets.
If all of our debt was held externally, as if we were a true Third World Country, default would have been a done deal already.
Soo, we're going to do this the easy way - which is to crank up the printing presses like there's no tomorrow until - voila - we have created enough new fiatscos to retire the debt.
Hence the Fed/Treasury engineered war on the dollar.
And it was all going swimmingly until the PP activity started reflating asset bubbles instead of the general economy..
FWIW ... I'm in Au @850, Ag @9.65
Physical, in the bilge keel of U-96.
Can't remove it unless I get some Pb to compensate the boat's stability ..
KptLt laughing swordfish
9er Unterseeboote Flotille
I hope the U-96 is yellow.
actually black topside with Measure 17 Blue at the waterline and dark grey underneath
And you guys all abused me when I SAID this would happen.
Who would have thought it would have started so soon. We have seen the TOP in gold. Enjoy the decline!!!!!
Oh look. Gold is falling off a cliff. It's imploding!! Quick Sell sell sell.
What are you doing? Napping?
Napping!!! There's no Napping in bullshitball!!! There's no napping!!!!!
Sorry curbyourrisk but you're just not getting the big picture quite yet.
Sorry if people have made you feel bad by disagreeing.