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CME Hikes Margins Across The Board: Copper, Palladium, Silver, And, Oddly, IR Swaps, Treasurys And Fed Funds
As Zero Hedge had been claiming for about two weeks now, with volatility in stocks virtually gone due to the fact that nobody trades a market that is nothing more than a policy tool, those chasing vol have had to shift elsewhere, namely FX (the vertigo-inducing EURUSD is one example) and, surprisingly, treasuries. As we speculated, the fact that the world's most "liquid" market can experience 6 sigma shifts in the 2s5s10s butterfly in the span of days (more on that later), is indicative of something very bad developing under the surface. We have a feeling that should stocks continue to be shunned as they have been, and as the MOVE index continues to creep higher, the likelihood of some major wipe out is imminent. It seems that the CME has finally agreed with our line of thinking. Late last night, the CME hiked its margin requirements across pretty much all asset classes. The different options and futures involved in this drastic action were everything from natty, to copper (cough Blythe cough), to palladium, to silver. But most notably the CME both new initial and new maintenance margins on 5,7, 10 and 30 Year IR Swaps, 5,7, 10 and 30 Year Bond Futs, and, of all thing, the 30 Day Fed Fund Futures. If it has gotten so bad that the exchange has to regulate the vol in Fed Funds (the indicator of future inflation), then certainly one or more wheels are about to fall off. As to whether this action will have its typical impact of warding of shorting is unclear. We believe it will merely make fails to delivery increase substantially.
From the full release by the CME:
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Tyler... why so quiet on the CFTC position limit sham yesterday?
I don't think it means any wheels are likely to fall off. I believe the intention is to reduce volatility by raising the entrance bar for small, smaller ?; speculators; eg. those who care or can "feel" the margin requirement.
ZH acting all wonky again. Getting hacked?
even lady gaga fans know bankers will sell you in to slavery and you should buy silver. too funny.
http://www.youtube.com/watch?v=eqtUoRM_M3Y
Pass this along from Jim Willie. Though the article is about China, the last paragraph is about PMs and the thought that "they" can't allow them to go too low as China will scoop up all the physical. Another Greenspan Put?
http://www.marketoracle.co.uk/Article25035.html
The Chinese have done something remarkable, only to be done if they know the game is over and the victory over fiat paper money is complete. The Chinese have laid out their game plan, their modus operandi, their tactics if not strategy, through an anonymous London broker. Hats off to the King World News for sharing the invaluable information that should encourage even the most timid and reticent investor. The Anglo bankers are stuck!! They are running out of physical metal to sell in a fractional scheme. They cannot afford to pounce too hard on the price, with either naked shorts or higher margin requirements. Doing so only plays into the Chinese hands, which are grabbing all the bullion available. So the challenge is for the Anglo bankers to control the pace of the demise of the Gold & Silver metal market. This is game over. In these times of monetary hyper-inflation, called euphemistically and absurdly Quantitative Easing by another name, the prospects for a double and triple in the Gold & Silver price is utterly obvious.
Agree with JW CB.
Does not matter what the ¨Regulators¨ do.
Just buy the physical PMs before the Chinese get them all! And the price of gold goes to FOFOA numbers...
DoChen,
Not to worry.
SVL to .02
GLD to .08
http://blogs.wsj.com/source/2010/12/15/silver-debunking-the-myths/
Big Deal!
The WSJ article calls into question the allegations that the investment bankers are manipulating the market imho. The only analogy I can think of is how elections are stolen. You don't have to steal every vote to win one. The bankers don't have to knock the price down to the same benchmark every trading day to succeed either. I draw my investment decisions from anecdotal evidence. I am not good with math.
Great news - the CME Board Members sell and get short and then raise the Margin! YAY
I saw this last night and think something is really FU here. Weird.
CME is moving at light speed over something. Their masters are spooked.
Silver and Gold up in their faces into the close. Blythe will be back to sphincter kugels soon.
HK +++
I'am a small guy as many on this board are,the margins do not mean shit to tree! My coin guy will sale all I want from kilos to a mercury dime. Those are the numbers that hit home w/me.
Bond vigilantes myass. Naked shorts more likely.
I don't know any companies acquiring their Argent from the floor of the comex. If I did I would make some of my purchases from them.