These people know the gravy train is about to run off the rails and they’re looking for safety. They don’t care if they miss out on another 5% gain in the stock market, they want to get out of stocks NOW.
In recent days, there has been a global scramble to acquire silver bullion coins and bars after the price falls according to Reuters. Maple Leaf silver coins are difficult to acquire according to bullion dealers, with the Royal Canadian Mint on allocation from September. There is a concern that supply times will increase and premiums are likely to jump according to Reuters. “A tumble in silver prices to four-year lows has triggered a global scramble by consumers to purchase silver coins and bars, as the spread between the price of the metal and gold reaches its widest in five years. Retailers and distributors in Asia and the United States said they were struggling to get supplies of items such as Canadian Maple Leaf silver coins. While demand for silver has been strong over the last few months, retailers say buying interest soared in recent days as the metal fell towards its lowest since 2010, along with gold.
Greenspan told the CFR that "gold is a good place to put money these days given it's value as a currency outside of the policies conducted by governments." "Gold has always been accepted without reference to any other guarantee." When asked where the price of gold was headed in the next five years he said “higher --- measurably" ...
U.S. Mint Gold Coin Sales Near 60,000 - "Islamic State, Ebola, Putin, Ukraine" and Swiss Gold InitiativeSubmitted by GoldCore on 10/29/2014 13:59 -0400
Smart money is willing to pay a small premium to own segregated and allocated coins and bars rather than have the exposure of an ETF or digital gold platform ... Prudent diversification into physical coins and bars will again reward those who take a long term view.
The Smart Money is dumping stocks for real assets.
EVENTS LEADING TO CHAPTER 11
GTAT is facing a severe liquidity crisis due to circumstances that will be more fully described at the hearing on the First Day Pleadings.
August 26th: "Talk about growth... hey have the sapphire product that is going to go in the iPhone 6 launch... this is the stock I have been recommending!" - $18.88
October 4th: Chapter 11 - $0.97
There is a saying that you don’t ring bells at the top. It’s not really true. Every time the market forms a major peak, at least in the last 15 years, there are usually a preponderance of signs of excessive speculation and leverage.
Despite or maybe because of the recent bout of price weakness, gold and silver American eagle coin sales from the U.S. Mint have picked up significantly from last month. Smart money continues to accumulate bullion when prices are pushed lower.
The U.S. economy has had six full years to bounce back since the financial collapse of 2008, and it simply has not happened. Median household income has declined substantially since then, total household wealth for middle class families is way down, the percentage of the population that is employed is still about where it was at the end of the last recession, and the number of Americans that are dependent on the government has absolutely exploded. Even those that claim that the economy is "recovering" admit that we are not even close to where we used to be economically. Many hope that someday we will eventually get back to that level, but the truth is that this is about as good as things are ever going to get for the middle class.
Positioning among "smart money" participants in the markets continues to show major divergences. While large speculators bought S&P 500 contracts at their strongest weekely pace in more than a year - shifting to a net long position - they also increased the net short Russell 2000 position to its 'most short' in five years. Large speculators also bought crude oil after eleven consecutive weeks of selling. In the rates complex, hedge funds maintained their 10Y Treasury long exposure while large speculators sold 2-Y Treasuries at the fastest weekely pace in more than three years to the biggest net short position in five years. - leaving, as BofA warns, 2Y susceptible to a squeeze pull-back. This potential squeeze extends all the way to 5Y as repo rates indicate a massive shortage into month-end.
The Fed’s strategy of targeting higher stock prices to boost economic growth has done the exact opposite. This strategy has pulled money away from effective macroeconomic investments and into ineffective macroeconomic albeit effective short term microeconomic investments. The end result is that we have all time high stock prices but no economic growth. We will be stuck in this economic lull until the Fed is ready to admit defeat and allow for a new more effective strategy to be implemented.
In our era of omnipotent central banks worshipped by the Status Quo, we have a goddess of financial transitions--Janus Yellen, the two-faced chair/deity of the Federal Reserve - to usher in the Great Transition from risk-on to risk-off.
It appears today's weakness in stocks (most notably high-beta momo) and bonds (HY credit weakness) was triggered by two "ma"s - grandma Yellen and grand-poohbah BABA's Ma. Hawkish FOMC concerns took the shine off HY credit (and stocks) but Treasury bonds rallied modestly (5Y -3bps, 10Y -2bps). However, high-beta momo stocks dragged Nasdaq and Russell lower as 'smart money' proclaimed this was making room for the Alibaba IPO (which raises the question - if there is so much pent-up demand money on the sidelines just dying to be lost in the stock market, then why were so many high-beta, high-growth, momo names being sold today, theoretically in order to make room for the BABA IPO?) The USDollar ended marginally higher (GBP weakness, EUR strength) but most commodities gained on the day (Copper down on China) with WTI back to $93. Stocks did have a mini-melt-up on absolutely no news whatsoever into the last hour but gave most back. The Russell 2000 is -0.5% in 2014.