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Gold's VIX Term Structure 'Most Inverted' Since Lehman
While there are obviously sellers in the gold market, there is also a dramatic spike in demand for protecting what is still being held (remember there is a buyer for every seller). Gold's short-term VIX (implied volatility) has spiked to 18 month highs above 29% but it is the steepness of the term-structure of volatility that shows just how much protection is being sought. The difference between the one-month volatility and one-year volatility is almost 10 vols - the highest level of inversion (short-term risk higher than long-term) since Lehman. It seems the market is extremely fearful of further volatility in the short-term but less concerned longer-term. What is also worrisome is that the last two times that Gold's VIX was this much higher than the S&P's VIX was June 2006 (when the first hedge funds started to implode from Subprime) and Sept 2008 (Lehman). It appears that gold volatility is signalling counterparty risk concerns once again.
Gold's short-term VIX is its highest relative to medium-term VIX since Lehman as protection is bid...
and it seems the last two times that goldprotection was in such big demand relative to stocks was when counterparty risk was rising once again...
Charts: Bloomberg
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Even regular VIX exploded today. 13s up over 200% http://www.tradingvix.com/2013/04/sell-off-deepens_15.html
Orange juice bitchez !
WTF? Who would have saw that coming?
FOFOA predicted exactly this. $200 COMEX gold.
Buy some physical while you can because real gold wont be available on some phony commodities exchange price for very much longer. This could be the last hours of paper gold.
Okay I'm lost here. Tyler, can you (or someone) please explain how buying gold protection offsets counterparty risk??
By hedging your counterparty exposure across a larger base of defaulters... of course.
The large institutional stop-loss orders are on auto-pilot, whether they were triggered by commercial naked shorts or not, but keep in mind, there's a dichotomy here.
It is CONfidence in the FUTURE price of PAPER GOLD that is collapsing. What players in that game equate physical metal with that paper is now irrelevant, as it is the confidence in the futures market that is collapsing.
Because of systemic interdependence, we could have a related derivatives failure of epic proportions if the trend continues (I say related because the current gold market is the epic derivatives market that Freegold hinges upon).
When COMEX defaults thous who deal in derivatives (paper gold) will be paid in derivatives (currencies, i.e. "paper gold").
But with the massive positions of the bullion banks in FRAs (interest rate derivatives) a bond market collapse or an interest rate derivative collapse could be interconnected to the current gold market collapse.
Spitzer,,
Paper seperates from phys,,I've just had an orgas^*&^%^
They're selling, Mortimer!
"Orange juice bitchez !"
See. That proves it. You can eat orange juice, err.., um..., you can't drink gold!
Barbaric relic
Something wicked this way comes.
Like a slow-motion train wreck.
It's sloooooow moooo until it ain't. Then it's real quick.
Here's to price discovery! I might just BTFD after we pass 666 again
Slo mo until whoosh. Bid gone. Even with the hedgies, hfts, and headline reading robots.
Just wait until we get to the derivative forced unwinds on $ Trillions in the hundreds of!
speaking of slowwwww- apmex site is really slow. Glad I bought more coinage this morning
try getting a price at Provident...I gave up.
Yup. Something big, too. Cyprus or more likely Japan broke something important in the financial system and we just don't know about it yet, just like when AU imploded before Lehman and the financial collapse in 2008.
It's worth looking at the August-September 2008 gold chart to see how this plays out.
These charts infer that the evnt has already occurred.
Actually they imply that the event has occurred, but has not been recognized by the remaining markets.
When they do, gold reverses. Also, things get ugly as in Hank Paulson's tanks-in-the-street ugly of 2008.
I fully expect some sort of major reveal in the next two-three weeks that's on par with a Lehman-type event, unless they manage to keep it secret. In that case, ZH will probably publsh charts showing what actually happened.
I don't think they can keep anything a secret, not with this move.
I appreciate the shakeout that really wasn't. I think it will be an interesting week.
This is not a "bull market" shake out man.
I said 2 weeks ago on here to forget everything you know about bull markets. Throw all of your charts in the trash. This is the revaluation of physical gold.
My guess is that paper gold is being converted to physical.
I'm still going with the 'pre-emptive' theory...
~~~
1. Either it was a pre-emptive move to put fear into the minds of any 401k holders to cash out [right before they announce a $200B QE ante raise], thereby, keeping the funds largely in tact for later DieselBOOMING...
OR
2. Alternate theory... Drop the PM prices to a point where miners can no longer afford to stay in business [opening up the door to BUY UP all the miners with printed money]...
Iwould guess a major Euro insurer is going down,
Their accounts make the banks mark to model method look honest.
With re and re re insurance could end up as a loss anywhere.even without
the modern derivatives.
Insurer on that closed Cyprus bank?
Hey, you're on to something there. +100
i am thinking one of the piigs is icelanding the euro. someone has to jump off the ponzi scheme. i thought it would be the japanese first but portugal or ireland makes more sense or even cyprus.
the realization the west is fucked is clear.
Goldman releases earnings tomorrow?
So what is Bart Chilton doing today? Haircare Monday?
And Gary Gensler? Obviously not haircare day.... maybe suture day...
Krugman says its time to end the Goldbuggery anyways, and demands "intellectual capitulation"
Krugman is a fool.
This is the golden bullet in his fucking head and nobody will know it yet until the dust has settled.
Talk about a lack of intellectual honesty...
Krugman just prefers standard buggery to goldbuggery.
Come on..open your wallets and lets bail out the counterparites --banks and insurers-- again so they can reap record bonuses on your tab.....be generous this April.
BFS
Bull Fucking Shit
No more bailouts/ins
Benny ... may the bird of paradise fly up your nose
"It appears that gold volatility is signalling counterparty risk concerns once again."
Uhh, huh..
I bought gold and silver last week...some more today ,and I'll buy again the next time they knock it down. Funny thing today when I was talking to the dealers is that everybody is buying, there are very few sellers.
Thats what they were saying at 1600....and 1550...and 1530....now 1370...and at 1200....and at 1100...
What are the dealers gonna tell you? Panic selling is rampant? Wait. Wait. Wait. Wait.... Geesh. Whats the rush? Wait for it to bottom out... you guys are suckers for buying here. My god. Act like youve seen an economic collapse before. The time to buy is when the banks/countries start liquidating and not before. This is just the first wave of selling. There are a few more dumps to come. Or not. Be a fool and guess the bottom.
Sounds like you are fool for trying to guess the bottom. When the shit gets that bad there won't be any physical left. Two weeks ago I didn't have to wait to have an order filled...today it's a three week wait for silver. Like I said if they hit it again next week I will buy more? Why should I care if I don't hit the bottom when I know that the upside is unlimited?
lol. ok. Thats not only foolish, but you're lying. Youve been buying every dip for 2 years. If I had that much cash Id be sitting on a beach somewhere and not speculating in currency markets. Do you have unlimited funds with which to buy PM's? Why do you keep buying the dip when all your previous "buy the dips" have been inaccurate? Only a fool would keep making blind guesses when the data points to obvious sell-offs across all markets. But there has to be a buyer to make a market and that would be you. Unlimited upside???? Are you kidding? Let me guess...because China and India are buying? Hyperinflation? Unlimited upside? wow. You really shouldnt be playing in this game with that thesis. You're gonna be toasted if you've really been buying when you said you were buying. But hey... to each his own.
First of all you don't know a thing about me to call me a liar, so that makes you a complete idiot. For your information I have "zero" debt to worry about (other than the debt based fiat currency people like to call money), and I have a monthly buying program. It's just like the market? Do you go all in or do you pick your spots? Do you take money off the table or do you let it all ride? I prefer to average in and I take proceeds off to put to work in precious metals.
By the way your first post you stated " My god. Act like youve seen an economic collapse before." so again I ask..why do I give a shit if I hit the low or not? If the price in fiat goes lower then fine if the price goes higher even better.
It's funny that as something is apparently being discarded all over the place lately, almost all of us on here have only one concern, and that is being able to actually own that thing. None of us care if the price falls further or if we hit bottom. That drives people nuts because it flies in the face of conventional shitheaddom.
What gets me is his argument make no sense. On one hand he says act like we have seen an economic collpse before, but on the other he doesn't grap how that can lead to unlimited upside for precious metals. We could wake up tomorrow and the dollar would be dead, ( I don't really think it will happen that quickly) but precious metals will still retain teheir buying power.
If the dealers were lying, they'd have inventory to sell. They don't.
I've been watching Tulving, APMEX, etc in real time. Premiums are getting increased and products are going out of stock. Even if they're just sitting on their own inventtory because they bought high, they could profit from the buy-sell spread on any selling.
Make no mistake, the market is getting sucked dry of physical at these prices.
i troll for cheap junk jewelry and coins. i was surprised this past weekend when everything was still going for a premium way above spot. no one is selling physical. this is a conversion of paper to cash. buy!buy!buy!
Got the same info from my dealer who said Friday was strong and Saturday even better.
Blow it the hell up! I found nearly 2k rounds of .223 FMJ rounds at a garage sale this weekend. I shit you not. It's older Winchester stuff, but I popped off a few rounds from several boxes and they all made a nice bang. It was all in one big box, I couldn't believe it when I saw it. While all the fat old women were looking at worthless plastic crap, I paid $150 for all those rounds.
I'm a sucker though, the old dood running the show looked surprised when I told him $150 was good. I probably could have got the whole load for $100.
We should all be paid by IQ level. That is all.
That's what the fascist apparatchiks think -- they can't stand that anyone is allowed to make more than them...
Get smarter.
That's not statistically possible. After a certain point- 9's of fineness are for all practical purposes- meaningless.
@ bnbdnb:
I'm inclined to agree with you on that, but think of how many people would need some kind of "income assistance"/welfare if that was the case.
No different than now. Its just that I'd be rich.
The people with the guns define IQ.
And, many of the most intelligent are the greatest fools, or wackos.
I'd much rather we pay people on character and ethics than being a human calculator/dictionary.
Look at the charts above - they imply that some event has already taken place, not that it's about to.
Until the curtains open though, we are in the dark.
Whats Ben schedule ? and is he following it.
Whatever "it" is, the focus (and blame) will be Wall Street. But something has definately gone haywire in the past few days. Funny there has been no word out of N Korea over this time frame. the talk is that they have "cooled down".
Surprised? NK was just a placeholder for the gold move showcase.
Much fuckery is afoot.
Russell not having a particularly good day either. Perilously close to 900, look out below if we hit it.
it's funny it seems like all the div payers are having a decent day. healthcare especially. i'm surprised the dow is not off just a couple of points.
I think the feces has already hit the fan and that we're just waiting to see where the splatter will land.
Don't under estimate what is going on my friend.
The worlds financial architecture is changing. Its a long story but keep calm and buy physical gold.
All is well is All.
First portion of GDX today. 1/3rd final position.
If history is a good guide, and it generally is, expect the mother of all increases in the price of gold in the coming weeks.
I would say to buy on this monumental dip, but lo and behold no physical gold or silver is for sale today.
Lehman x 100 on the way.
Brace for the 2pm sell off across the board.... Should be interesting.
Already is getting interesting. Tho' I expect the PPT to come charging in.
Agreed and scene....
Here we are again, 20 handles down on ES and it stops. Ben has declared this the "daily limit" for the S&P 500. Anyone notice?
Its actually an expansion of the range. Usually its been 10-12 pts down =strong buy, either all of that or half is gone by the close, the following open 100% is gone and its off to the races again.
In any case, it's not reflective of where it should be .....
Is a side effect of the destruction of the gold market going to be that a few DUST holders become quadrillionaires?
http://stockcharts.com/h-sc/ui?s=DUST&p=D&yr=3&mn=0&dy=0&id=p32246657846
Hop on board everybody! I'm sure that trend is just getting started - next stop 200! OK, it didn't work out so well with bitcoin, but this time is surely different!
Due to high demand, this product is only available outside of the US.
Maples also outside US only.
Krugers still available @ around 1475/
Although my charting software and data feed won't blow anyone's doors off, I always pay attention when the SP-500 equal weighted and cap-weighed indices diverge by a lot. Like today.
Wow. We broke through daily lows....gonna get bad for S&P.
QE5 is coming in the form of total banking recaps or the entire system self immolates.
Anyone hear that crazy talk from Merkel today? "Banks must be allowed to fail." They are coming for all your money. Get it out of the banking system. Take advantage of the gold sale. But definately GTFO of the banks.
I just went to buy some Canadian Maple Leaf Silver coins ..... my local Bullion dealer just raised their premiums from 10% to 20% over spot this morning ..... good luck trying to get physcial Silver anywhere near this paper spot price.
Had no problem at Blanchard.
Exact same story here with my local guy.
Market in process of trying full rescue now, ES pushes 6 off the lows in about 10 min. They will never give up on this stuff - Gold could go to $250 and they would likely still be buying SP500.
I am actually looking to buy gold if they nail it another day. My guess is tomorrow bounces (would be shocked if it does not) but adding on the next decline below todays lows.
I'm starting in with some lottery tickets in NUGT at 11.91 yea yea the paper world might blow up but I kaint resist... I smells niggas panicking
Anyone seen Paulson?
In the event expiries are mattering here:
Vix is done end o' day tomorrow
ETF's/etc. are done end o' day Friday
Gold futures are done end of day 4/26 (last Friday of the month).
This honestly seems like something bigger than expiration manipulations though. Largest 2 day move in gold in 30 years. That doesn't happen minus something very, very wrong impending.
So the greedy asshole gamblers are finally getting rid of their worthless paper gold ------- What else is new?
They finally figured out there's no physical to back it up. Physical Savers just hold on --- no prob lem.
Just wait till they start getting rid of their worthless paper stock certificates & worthless paper bonds ---- ha ha ha ha ha ha ho ho ho ho ha ha ha ha ho ho ho ho, etc
What can you buy with worthless paper stock certificates & bonds? Worthless paper or digital money printed out of thin air?
There's nothing else to buy. The people on food stamps & unemployment are buying everything else. Except the Lamborghinis ---
the tbtf fat cat ceo's are buying all of those.
It's worth noting that the Yen is about to complete two up days in a row, very strong up days. It's basically round-tripped back to April 5th. Think about that for a second. The Yen, being obliterated at warp speed by Abe, is..... strengthening? And it's not just against one or two currencies. It's strengthening against every currency. This is superbly fucked.
Some institution has collapsed and they are liquidating everything. 2008 all over again.
Some perspective is in order.... Gold VIX was at two or three year lows only FOUR days ago.
I had a huge argument with a relative this morning because I am always buying a little extra food these days,keeping the shelves stocked. She as much called me an idiot and I told her she was in denial (she drinks,I don't).What bothers me these days is in the USA the f****rs don't even feel guilty about the theft of assets. If Corzine can have his lofty attitude to the manor born,then what should we tell a young kid in school about values and hard work. We need a country worth fighting and dying for. I think that with the exception of the military,people have forgotten about duty and citizenship,sacrifice and all that stuff.
When you own physical gold, who is your counterparty?
Got it?