Exchange Traded Fund
Claims that total defaults in the municipal bond market could reach $100 billion are vastly exaggerated. Teachers will starve, police and firemen will go on strike, and there will be rioting in the streets before a single interest payment is missed to bond holders. Defaults will rise, but it will be from two to only 20, not the hundreds that Whitney is forecasting. Have I seen This movie before?
The basic problem is that nobody cares. Cotton, the grains, and oil all go up for the short term. But the long term impact of the Egyptian blow up on the global economy is minimal. But expect volatility to start trending upward from here. There are black swans out there gathering.
As Egypt Bourse Announces Trading Halt Through End Of Week, What Happens To EGPT ETF Holders And The 15% Premium To FV?Submitted by Tyler Durden on 02/01/2011 07:40 -0500
After Van Eck Global briefly suspended the EGPT ETF for trading, the broad synthetic market index resumed trading and closed about 8% higher on the day. That Kool Aided investors saw absolutely no problem with the fact that the ETF would not have access to creation units until the Egyptian market reopened. Which begs the question: after it was earlier announced by Arabiya that the Egypt bourses are likely to continue their closure until the end of the week, just how many more investors will risk with ramping up the ETF ever higher, even as it was trading at a 15% premium to FV yesterday. Lastly, if as some expect the Egyptian stock market does plunge once it finally reopens, those who loaded up on this latest mini bandwagon are about to be reaquainted with gravity. Alas, the Egypt stock market is not part of Bernanke's purview for wealth creation.
Tracking The Gold "Conspiracy" - GATA's Must Read Presentation To The Cheviot Asset Management Sound Money ConferenceSubmitted by Tyler Durden on 01/29/2011 13:45 -0500
GATA has compiled what is probably one of the best and most comprehensive reports on the history of the gold market, the "special" place gold holds in the central bankers' world, the interaction between the physical and gold paper markets, and the documented historic evidence and definitive proof that the gold price has long been the most manipulated concept in the history of modern capital markets. Must read for all interested in the dynamics behind the price of gold.
Following my thoughts on the fireworks going off everywhere in emerging markets, if you are not short emerging yet (EEM is a great proxy. Look at Bovespa in Brazil or TUR the Turkish ETF, it is all looking horrible and about to get completely decimated), you can still buy silver and sell Spanish equities. A few weeks ago when silver had broken the 50-dma I had pointed that it should retrace towards 25.80/26.50. We came right around those levels and caught a huge bid today. Confirmation by breaking out of the bearish downtrend channel since the recent highs would point towards new highs. Meanwhile the IBEX has completed a consolidation wedge and held resistance at 11,000. As a long as we stay below the afore-mentioned resistance the next stop on the way down is 9,600.
Expect dire reactions by financial markets when the US debt/GDP ratio soon tops 100%. With the current spending trajectory and the new tax compromise, total debt will reach $23 trillion by 2020, or some 160% of today’s GDP, 1.6 times the WWII peak. China and Japan might even demand a retreat from our $150 billion a year commitments in Iraq and Afghanistan to protect their bond holdings. Who were the real big spenders?
Everyone is buying gold, right? That's why the price is so high, right?
When the market seems like it is about to roll over, who you gonna call? Why future Treasury Secretary Jamie Dimon of course... Courtesy of IOIA, we now know whose ETF desk has a sole purpose in life to hit the Chairchopper's Russell 2000 target of 36,000 before June, when it all goes to hell.
Too many investors want a magic elixir that guarantees outrageous profit with no risk, either to their pocket or their brain cells. But it does NOT have to be this way...
The world gold council has released its quarterly comprehensive investment digest, as usual chock full of actual data, and not just anti-gold speculation based on myth. Probably most relevant are the core facts: "The gold price rose by 29% in 2010. By comparison the S&P Goldman Sachs Commodities Index (S&P GSCI) rose by 20%, the S&P 500 rose by 13%, the MSCI World ex US Index increased by 6% in US dollar terms, and the Barclays US Treasuries Aggregate Index rose only by 6% over the year." The main reason for the jump: excess supply of paper currency alternatives, and surging investor demand. And while the recent pull back has been primarily driven by the flawed assumption that the Fed will not monetize any more debt and pump the "Yucca Mountain" of excess reserves (it will), many forget that the demand is actually still there. The chart below confirm this, and provide some other observations on the gold market.
The heavy price of a “head and shoulders top”. Competition from rising interest rates in emerging markets and record scrapage rates are eating into the prospects for the barbarous relic. So are higher margin rates for traders. Moving out of hard assets into paper ones. Exiting from a one sided trade. (DGZ), (GLL). (GLD).
You may feel that this is an odd time to write a piece about one of the riskiest sectors in the precious metal investment class, especially as gold and silver prices continue to plummet in the futures markets but the proper time to buy, of course, is when fear is high and prices are low.
I, among many, was thinking the Euro would test the 125 level, but things have turned. Here is how the reversal of foturn came about and the outlook ahead.
Gold Options activity took a turn towards the bizarre late Friday. Between the hours of 2pm and 4pm Eastern, put buyers came out of the woodwork. We are almost certain that Doug Kass's interview on Fast Money was the sole cause of this activity. He was interviewed at 5pm. The put buying frenzy came in a full 2 hours beforehand on a Friday....What we are focusing on is the option activity that occurred before his interview.
As we highlighted yesterday, and predicted a week ago, following the Ivory Coast's halt of cocoa exports, futures in the substance have moved to one-year highs on Monday as "ongoing political tensions in the world's top producer escalated." The WSJ reports that "New York ICE second-month cocoa futures soared more than 4% to a one-year high of $3,340 a metric ton. In London, front-month March futures jumped 7% at the open to a five-month high of GBP2,307/ton ($3,692/ton)." We hope that our prediction that JP Morgan is the mastermind behind this most recent key commodity market implosion, made surely in jest, remains that way and that no cocoa ETF is currently being prepared by JPM without anyone's knowledge, until it is of course, too late.