This page has been archived and commenting is disabled.
ICE Boosts Sugar Margins By 65%
Prepare for another staple pricing readjustment courtesy of central clearing "risk management": minutes ago the ICE hiked its Clearing Member outright margin for Sugar (SB and SBC) from $2,150 to $3,550, a substantial 65% increase in margin requirements. Little by little more exchanges refuse to take on liquidity risk. In essence what the CME, the ICE, LCH and everyone else is doing by hiking margins (in addition to forcing a brief period of selling) is to offset liquidity risk, although not risk of more rounds of liquidity, but of the Fed's withdrawal of liquidity. If tomorrow Bernanke were to announce QE is over, all those who have so far enjoyed massive unbooked profits in their options accounts on margin, will see their NAV collapse and margin calls will provide the double whammy to a complete asset liquidation wipeout. Yet unlike in the case of silver, where the margin requirement was modest, here the jump is very material. That said, now that silver margins have been tightened, gold should follow shortly - surely, that is the prudent thing to do. On the other hand, ongoing delays in gold margin increase will make the whole recent margin readjustment somewhat odd - after all, what better way to keep another buying surge in check then not announcing how much gold margins will go up by. Once the news is out there, buyers will be able to process and adjust accordingly. As long as this information is merely anticipated, it will continue to be a far bigger brake to a parabolic move higher in gold than if it had been already disclosed and processed.
And gold is not the only thing. Here are other agirulctulra products that will soon see their margins demands surge as well.
h/t John
»
- 6097 reads
- Printer-friendly version
- Send to friend
- advertisements -
Mene Tekel Perez
(count weigh divide Persia)
the writing is on the wall
http://en.wikipedia.org/wiki/The_writing_on_the_wall
A baited banker thus desponds,
From his own hand foresees his fall,
They have his soul, who have his bonds;
'Tis like the writing on the wall.
Check this out. Right now at 12:08am EST:
Futures:
Dow DOWN
S&P DOWN
Nasdaq DOWN
Russell 2000 DOWN
Nikkei DOWN
Crude Oil DOWN
Natural Gas DOWN
Heating Oil DOWN
Gold DOWN
Silver DOWN
Platinum DOWN... Copper DOWN... Palladium DOWN... Corn DOWN... Soybean DOWN... Oats DOWN... Rough Rice DOWN... Wheat DOWN... Cotton DOWN... Coffie DOWN... Sugar DOWN....
So... what's up?
LEAN HOGS.... & USD barely has an erection.
EVERYTHING'S DOWN! (except Lean Hogs!)
correlation
EVERYTHING'S DOWN! (except today Mandy was up and looking delicious)
You're right on time until you find
They've just been waiting for the fall
The Writing's on the wall
It's seven-hundred stories tall
Just when I was starting to think "A POMO a day keeps the margin clerks at bay"
Pomo granite
NAS closed 255552. ?
S&P closed 121354. Take out the 4 and you have fibo numbers, after rearrangement.
FAZ opened on 11-11 at 11.11
And sugar already took a hit do to a huge Indian harvest.
If tomorrow Bernanke were to announce QE is over...
& as long as we are wishing, I'd like a pony........
There must be a pony in here somewhere with all this horse puckey
lulz... I had to quote you
I still believe that raising margin is exactly the WRONG response to dealing with higher prices since again "you're reducing liquidity" which could be used to force prices DOWN as well as up. "Should the prices start rising again" as they have "then what?" More to the point "if we're using QE money...who needs margin?" Still "relative to QE" I agree--should the Fed yank it then that would have an impact. It's hard to tell though "because an economic recovery is under way." Either way I highly doubt the Fed will yank QE.
I got my hands on a copy of the order for the new gold margin requirements.
It says that starting Monday:
- No margin allowed
- Gold is no longer valid for settlement (must be done in cash or GLD shares).
Additional note: ICE board members are upset that Splenda packets have replaces sugar packets for their coffee, in the break room. ICE board members worry next week their coffee will be replaced with stickie notes that coffee will be delivered soon. Really it's on the trucks for delivery, trust us.
It appears to me that's what we should be hoping for as it would just create an unbelievable buying opportunity.
So if gold plummets to say $900.... WHERE are you going to buy it for $900?
this is a sign of a complete collapse of markets....if you wanted a leading indicator of pending financial doom - this is it....
Parabolic Containment Mechanism Bitches
In the main, your observations are spot on. However, on this one you've slightly missed the mark. Today's margin increase for sugar was not a function of prices going higher. Sugar futures were down sharply today. Changes in margin on all the exchanges are occasioned by change in price volatility -- irrespective of direction. Remember this. The Exchange ( technically, the clearing house ), is the seller to every buyer and the buyer from every seller of all commodity futures and options. Margin variation is designed to ensure that the customers of the exchange (the clearing house) are going to be "good" for execution of the contract. It is a way to mitigate against the risk of default and cope with counterparty risk.
How about them NAKED shorts? Who has the asset?
Pin the tail on the donkey.
It looks like the typical shake out before the full blast run ups if you ask me. Either that or this is a feature not a bug. The street wants QE, but the Fed cant have people starving and get away with it, so perhaps it's an attempt to micromanage prices. Inflate bank shares and GM IPO but not sugar and cotton. Keep fiat on top of metals by yanking dollar policy back and forth with confusing remarks and trying to shake metals to death. I mean come on, it's been absolute schizophrenia in the commodity markets since the QE announcement.
We have been buying physical PMs and defending it with cheap dollar options or far forward expiring puts on iau and slv in the paper markets. This strategy has worked well for awhile now as the bear raids on metals become obvious fast, as do the reversals. The fact that metals seem to be gaining a monetization effect all of their own recently doesn't hurt either.
I felt obliged to step in and lend a hand over at SLW yesterday. Now theres a stock with some character! Good luck Silver!
This happens all the time. Commodity bubble pricked
Margin requirement increase did not last long for silver (a couple of hours at best)
Bring daddy his suga.
So you can buy suger with gold, since ICE accepts gold as payment now.... Gold is money.
This day-to-day BS is merely to propagandize the sheeple into unloading any true wealth they may have left. My advice is to keep your PM poisitions, ignore the obvious manipulation, go to sleep for 6 months, and if you wake up still alive, you may find yourself suddenly very wealthy.
I was the one who invented the term: "Asset Price Dislocation". Indeed - I am keeping my dislocated assets (PM's and mining shares) because the dislocation is going to happen in my favour.
you do realize sugar had over a 10 percent range today, they have to raise the margins. the margin for comex silver should probably be higher than it is as well.
They are going to do everything in their power to keep gold down...except the one thing that actually would: stop printing money.
I dont get what people here dont understand. MARGIN IS A FUNCTION OF UNDERLYING PRICE AND VOLATILITY. It is not some magical device to manipulate the markets and drive them lower. Margin on crude was raised 6 or 7 times in 2008 and that didn't stop it from going to 147. Get a clue. Margin was raised 7 times the past 6 weeks on cotton yet it went limit up 8 of the past 10 days. Please end this margin conspiracy theory because frankly it is ignorant.
test.
First post. gimmee a break.
Breaker 1-9 COME BACK! SoCal Bear Report
http://www.youtube.com/watch?v=wIJG6IZjBVQ
So now ICE charges more gold for sugar?
This is going to keep happening over and over and I say GOOD.
CBs don't like QE2 being used to justify speculation in commodities, it's bad for the peons and bad for the overlords. Can't kill the peons because they feed the beast, but can certainly kill off all those pesky middleman speculators along the way.
Speculators at this stage are not assisting price discovery, quite the opposite, they're distorting prices to the high side (seen the oil inventories lately?). Kill 'em off.
If I were Blythe I would keep that dry powder (increase gold margin) - for gold 144x.
Next step would be to dramatically reduce leverage levels for commodity trades.
Don't put the hate on sugar, I like sugar. Going to stock up today.
You can eat it, drink it in your coffee, ferment it and drive your car with it.
GHD australia is authorized ghd outlet brand online seller provides all kinds of ghd hair straighteners. Such as cheap ghd ,
ghd iv styler, pink ghd etc. GHD styler can make you life more confidential and colorful. Welcome to http://www.ghdstyle-au.com http://www.uggdiscount-boots.com