The Margin Clerks Were Working

Tyler Durden's picture

Via Mark J. Grant, author of Out of the Box,

"This is the excellent foppery of the world: that when we are sick in fortune -- often the surfeits of our own behavior -- we make guilty of our disasters the sun, the moon, and stars, as if we were villains on necessity, fools by heavenly compulsion, knaves, thieves, and treachers by spherical predominance, drunkards, liars, and adulterers by an enforced obedience of planetary influence. An admirable evasion of whoremaster man, to lay his goatish disposition on the charge of a star!"
                       -William Shakespeare
You will hear many people in the next few days telling you that the gold market decline was just a correction. I do not share this view. For one the drop in the price of gold was the largest two day drop in 30 years. Secondly the volume was a record. This then leads to other conclusions.
Long experience in the markets will inform you that this kind of massive sell-off is indicative of someone or perhaps a numbers of someones with serious problems. It may be ETF's, it may be some hedge fund or it may be central banks who have pledged their gold as collateral with the ECB but somebody is in trouble. You do not get the breadth and depth of this kind of drop without someone having very serious issues.
"Thought, like all potent weapons, is exceedingly dangerous if mishandled. Clear thinking is therefore desirable not only in order to develop the full potentialities of the mind, but also to avoid disaster."
                       -Giles St. Aubyn
You can chalk some of it up to the apparent terrorist acts in Boston perhaps but the implosion was underway long before that took place and, in any event, a threat to the country generally results in gold spiking higher and not the opposite effect. Another indicator here is the sell-off in equities. In my opinion this was not just a correction either but the fallout from gold. The massive margin calls in gold forced people to sell equities to gain additional cash and you got a spiral effect in both markets. Then as stocks dropped there were margin call in equities so that one decline fed upon the other. The losses were of such magnitude that both markets entered what can be honestly called a feeding frenzy and the carnage was self-evident!
Given the severity of the decline you are likely to see a bounce in both gold and equities today. I would cast a suspicious eye upon both. The drop-off was of such magnitude that it may be little more than a short covering rally tinged by the believers that both markets will go up eternally. It will be a few days but it will leak out just who was singed by the decline and for how much and then we will have a better perspective.
The world is a fragile place these days. World-wide Quantitative Easing has buoyed all of the markets. The backdrop though is economies that cannot support current prices. Europe and Japan are both in tatters, China is slowing down and America is in what I would call a "sputter." Yesterday was a stark reminder of what can happen when the discrepancy between the results of the flood of newly minted cash comes into conflict with underlying fundamentals. The markets can turn on a dime and the move can be severe and painful.
Yesterday the margin clerks were hard at work. Today they may be more restful but those clad in the green eye shades may not be done with us yet. Yesterday also gave us an important hint.
The cash provided by the Central Banks has been leveraged to the nines as indicated by the severity of the sell-off in both gold and equities. More cash will likely have to be raised in the coming days which is why I think the Fates may not be done with us yet. Early morning indications do not indicate a bounce of any magnitude, in either market, and so I would remain cautious as many over-leveraged positions continue to scamper for cover.

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MythicalFish's picture

Just read that half of Justin Bieber’s Twitter followers are actually GETCO algos.That explains A LOT.

Son of Loki's picture

Fish, you forgot to mention Bieber's monkey now making the MSN  news headlines:

krispkritter's picture

Tiny, freakish, no-talent hack...went and left his monkey behind.  Monkey's probably get a better chance of a career and I'm not just saying that because...well you know...

jbvtme's picture

how the fuck are justin beiber and shakespeare aligned on the same page?  fuck me

TeamDepends's picture

Another clear sign of the End Times.

dhengineer's picture

Let's see if I can connect the dots:

Shakespeare acknowledges that humans blame their bad behavior on the stars;

The stars (not humans) cause bad things to happen to the markets;

The markets are propped up by the Bernack's fresh benny-bux

Algos run the markets

Beiber's twitter followers are algos

Therefore, Beiber equals Shakespeare... and apparently spanks his bad monkey...

That's five minutes I will never get back.  Um, I need another drink.

hardcleareye's picture

Welcome to the "fight club"...... <sarc>

(I don't think this is what "Tyler" had in

Panafrican Funktron Robot's picture

Mark Grant is positing on shit that makes no fucking sense (not surprised).


How much fiat is in gold/silver paper

How much fiat is in stocks/bonds

How much fiat is in crude oil

How much fiat is in forex trading

Through this lens, would it maybe make a bit more sense that gold was merely collateral damage in a fucking epic currency market dislocation, that also hit crude priced in USD particularly hard?  Look at crude vs. gold over what would be an eternity in our ADD afflicted brains, April 1st - April 15th, 2013.  See where the dropped nearly in tandem?  Now look at USD/CHF, one of the ultimate "safe haven" barometers, and the 30 year, another of the "safe haven" barometers.  See how these two asset classes traded almost the exact inverse of gold and oil?

This isn't hard, people.  I agree entirely with gold market manip (though I would note, all markets are heavily manipulated at this point), I'm just saying, gold is a relative small fry as far as market movements, it just happens to be unusually scary to the fiat regime.  So is oil, because changes in how oil is traded could end the USD faster than anything.  So, acting surprised by the gold/oil drop, or coming up with answers that are fucking stupid and wrong, that doesn't help us, Mark Grant, and it actually hurts those that are less well informed, and therefore more likely to take your word on things that you obviously know nothing about, despite being a "respected" finance/economics writer for a long ass time.

pods's picture

The real question is, when his monkey is bad, does he spank it?


krispkritter's picture

When I'm bad, I still have to pay to be spanked... 

Burt Gummer's picture

"this kind of massive sell-off is indicative of someone or perhaps a numbers of someones with serious problems."


Yea, serious liquidity issues.

Muddy1's picture

"World-wide Quantitative Easing has buoyed all of the markets. "

More like US quantative easing by Bernake and money being made available to all foreign banks with offices in the US.

fonzannoon's picture

Ahhh Captain Obvious 3 days later....

The most entertaining part of this article is the caption.

Zer0head's picture

Domestic according to Chertoff group

Winston Churchill's picture

Without doubt.Low velocity explosive, maybe even  black powder.

Not too bright whoever did it,I can make better at the bottom of my garden with

supplies from CVS, and Discount auto.Seen worse damage from a mortar shells,although

I'm sorry for the victims.It could have been much,much worse.

Bearwagon's picture

Right, compared to a real explosion this was only a fizzle. Probably not even a real detonation but a rapid deflagration (like black powder). But black powder is unlikely, because it burns very hot, and there are no bad burns like that would probably cause. Could be, that I just haven't seen them, though.

TeamDepends's picture

Does anyone pay attention to spot price anymore?

Bearwagon's picture

Yes, I do. But it doesn't tell me anything worthwile.

moonstears's picture

Spot down(a) + sideways(b) X10 days = sale price of phyzz at local coin stores(c). Write this down.


Bearwagon's picture

"The move can be severe and painful." In case you get the mother of all margincalls, it not only can, but will be painful, at least in the short run, me thinks.

Dr. Engali's picture

You mean one of the club of insolvent banks of the western world  is in trouble? No Freaking shit...they are all in trouble. Let me know who isn't insolvent ..then I will be surprised.

Watts_D_Matter's picture

Next this guy will tell me that casinos cheat and elections are rigged....pure genius!

BlueStreet's picture

No problem is too big to fix, except maybe this one.  

youngman's picture

why would they want to fix it..they are making money hand over fist....its a rigged market..and the riggers like it that way...

Manipuflation's picture

Yep.  Probably a good day to go get some cash out of the bank too.  Something is very wrong.  Even more wrong than the normal wrong.

"Given the severity of the decline you are likely to see a bounce in both gold and equities today. I would cast a suspicious eye upon both. The drop-off was of such magnitude that it may be little more than a short covering rally tinged by the believers that both markets will go up eternally. It will be a few days but it will leak out just who was singed by the decline and for how much and then we will have a better perspective."

DeadFred's picture

We did get the bounce he suggested, a totally surprising 38.2% rise from the bottom toward the top from several days ago. This means all is well doesn't it?

PLira's picture

Art Cashin weighs in on yesterdays market in "Cashins Comments" fwiw.


Manipuflation's picture

Sorry, I got lost there for few hours.  Had to steal some business from my former employer.  Caveat emptor is all I can say today.  But hey look at the DJIA.  PE's on equities are 34523785628634889743 to 1 but they must be undervalued right?

tenpanhandle's picture


"Yep. Probably a good day to go get some cash out of the bank too. Something is very wrong. Even more wrong than the normal wrong."


Yesterday, April 15th, I completely drained my bank account.  One thing is evident...there are no capital controls on how much of ones' bank deposits can be transferred over to the IRS.



ebworthen's picture

"An admirable evasion of whoremaster man, to lay his goatish disposition on the charge of a star!"

God I love Shakespeare.

jmac2013's picture

Or whoever penned his works.  It's very unlikely that the uneducated man from Stratford wrote that prose.

ebworthen's picture

Intelligence, creativity, and keen observation of human nature need no schoolyard.

Einstein flunked out of math; will future generations claim he could not have been the author of his works?

An unfortunate artifact of post-post modern thinking is that one has to be educated to perceive, create, or intuit.

More than likely an education would not have allowed Shakespeare to think and write the way he did; and modern education is often little more than an indoctrination into accepted memes, theories, and modes of thinking.

jmac2013's picture

That maybe, but the works of Shakespeare have very specific references to classical works written in latin, greek, italian, french, most of which were never translated into english at the time.  We don't even know if the man from Stratford could read or write english let alone all these other languages.  Furthermore, he owned no books, and there weren't libraries in those days.  How did he get the learning of these classical works?  He also had illiterate daughters, highly unlikely the great writer Shakespeare would have raised illiterate girls.

I don't want to go round and round on this one.  If you've looked into the Shakespeare authorship and are fine believing that it was the man from Stratford, ok.  If you never have, I suggest you do.  Many famous writers and thinkers had their doubts over the authorship, with good reason. 

ebworthen's picture

I have, and like I said, modern education is often little more than an indoctrination into accepted memes, theories, and modes of thinking.

A lot of academics over the centuries have poked at Shakespeare to further their own careers, and because their own mediocrity made them doubt the exceptionality of Shakespeare and others.

Salieri versus Mozart; I'll take Mozart.

jmac2013's picture

LOL, Shakespeare as author is ORTHODOXY.  No need to portray yourself as some high minded independent thinker in this regard.  You are holding the sheep main stream viewpoint on this topic. 

In fact, you can't get book learning, which the author of shakespeare's works had to have (no other way you can refenece old texts without it) and have no classical education and no books. 

ebworthen's picture

I know, Sir Francis Bacon or some Catholic intellectual using Shakespeare as a proxy.

Heard it all; genius doesn't need an education.

I will continue to bleet and believe.

Humility takes courage.

Miffed Microbiologist's picture

Sadly have to agree with you. I was fortunate to be at Gonzaga in the early 1980s and was truly challenged intellectually by Professors in all depts. My general ed classes were much harder than what I see college kids doing today. Modern public education seems to think preparing young adults for the world today is simply having them regurgitate facts on a bubble test. The truly tragic part is that today with the wealth of information available on the Internet, one can eduction oneself easily. Unfortunately kids today are memorized by the shiny bauble in their hands and have no inclination to pursue anything else. Its a form of "pan autism" on an entire generation. Perhaps this is why we see the explosion of autistic diagnoses today, nature just catching up with the trend. Okay, I've gone off the deep end with that.


Imminent Crucible's picture

Does it really matter? None of us has ever met Bill the Bard, or Francis Bacon or Marlowe or Ben Jonson. Other than some feisty academics, we got no dogs in that fight. Besides the words themselves, all we have are a few tatters of dodgy personal history. 

The words themselves are amazing, whoever wrote them.


jmac2013's picture

Depends on what you mean by "matters".  I find it interesting that these works may have been written by someone more fascinating than this dullard from Stratford who went around suing people over minor grievances and raised illiterate daughters.  I feel a sense of relief to wipe that ricidiculous piece of fictioin from my conscience, kinda like when you are a kid and learn that the Easter Bunny and Santa Claus aren't real.

Imminent Crucible's picture

I can sort of understand this, but isn't life pretty short to spend any energy on a grudge against some obscure person who kicked the bucket centuries ago? Was Shake-Speare a dullard? I don't know. It sounds like you're one of those who assume that any person who didn't matriculate from an Ivy League school with dual degrees in Medieval Lit and the Metaphysical Poets is an ignorant lout. That would make me an ignorant lout. Whatever.

Not sure what your conscience has to do with it. I don't have that problem, because my parents never taught me to believe in the Easter Bunny or Santa Claus. They were the kind of brutal child abusers who spoiled everything up front by saying "Santa Claus isn't real. We just pretend he brings the presents down the chimney to make you ask why the wrapping paper isn't all sooty."  Vicious thugs they were.

jmac2013's picture

Like the other poster, you are accusing me of some sort of snobbery.  When in fact, I'm bringing up a very rational point regarding how someone with no book learning could reference very specific and often times obscure ancient texts written in Greek or Latin. 

No matter what kind of genius someone might posess, they cannot know books and the facts contained in books without reading them. 

How could Shakespeare know these ancient works intimately when he had no books, no college education (there was no Ivy League in the early 1600s only Oxford and Cambridge existed then).  You only get knowledge of ancient works by reading them.  These books were chained to the library desks at Oxford and Cambridge and only students and faculty were allowed access at very specific times.

ebworthen's picture

You have friends who read them to you and you discuss them with.

No texts in Inca or Mayan or Native American times, but rich oral histories, mathematics, astrology, art, etc.

You are confining yourself to the constructs of your age and caging yourself in a cell of preconceived notions of human abilities and paths constructed of Western post-modern determinism.

jmac2013's picture

Wrong, you are inventing super-natural explainations to try to perpetuate a story which is patently absurd. It's more likely you are the one confining yourself to a fictional narrative.

What friends told this to him orally?  There are no letters in Shakespeare's handwriting.  We have nothing in existence in his handwriting except a few badly scrawled signatures on his will. The will, incidentally, makes no mention of the manuscripts which were published after his death and attributed to him.  Why no mention of them in his will?  He didn't think they were a big deal?

The man from Stratford was married by 18 with 3 kids by 21.  When did the poor man from Stratford with so many responsibilities undertake this oral education that you surmise?  What record do you have of it? 

Uber Vandal's picture


There were MANY and NUMEROUS texts from the Mayans, unfortunately, Zealots of differing views of religion put them to the flame.
ebworthen's picture

O.K., I understand, but there are oral traditions that did not need books and libraries.

Someone can learn a great deal from discourse and dialogue without books, libraries, and formal education.

You don't have to have books and a formal education to bear fruit from once in a millenia genius, creativity, talent, and hard work. 

The Atomist's of ancient Greece conceived of the atom using thought, without scientific instruments.

My point is that it is the mind, the genius of individuals, these outliers that exist who defy rote explanations.

Let's say Sir Francis Bacon was Shakespeare, it is still genius.

Uber Vandal's picture

Indeed. The Hopis are a good example, too.

Point taken :)


Roger Knights's picture

" If you've looked into the Shakespeare authorship and are fine believing that it was the man from Stratford, ok.  If you never have, I suggest you do."

On his blog, Michael Prescott recently posted this:

It's not that middle class people can't be great writers. It's that Shakespeare's plays were pretty obviously written by a court insider. "Love's Labours Lost" is the most obvious example - it's chock full of inside jokes about members of the Court of Navarre, which only courtiers would get. And it's one of Shakespeare's earliest works, so we have to assume that he arrived in London from provincial Stratford and immediately became a member of the Queen's inner circle. This is, to put it mildly, unlikely.

What's far more plausible is that Shakespeare was a talented play broker and producer who purchased other people's plays, reworked them to make them more popular, and staged them for the groundlings. Some of the plays he acquired were written by a courtier who either was down on his luck and needed the money, or who simply wanted to see his plays performed publicly.

This would explain why the versions of the plays published during Shakespeare's lifetime were adulterated and corrupted, while the unadulterated versions ("the true and original copies," as the First Folio puts it) appeared only after both Shakespeare and the true author were dead.

Of course, it's impossible to prove this theory, but it makes more sense to me than the traditional story of an unlettered Shakespeare "warbling his native wood-notes wild," who somehow wrote the most sophisticated fiction of his era.

Posted by: Michael Prescott | April 11, 2013 at 01:03 PM 

To which I commented:

Shakespeare's sonnets, which were published early in his opus, require jumping thru technical hoops that a novice with little schooling couldn't have done.

The probable provider of most of Shakespeare's scripts was Sir Thomas North. The Sherlock who's uncovered North is Dennis McCarthy, whose website gives a boiled-down version of the arguments in his book, North of Shakespeare ( ), at



DeadFred's picture

You can see in this ancient prose the backwards thinking everyone had in those times. They trusted in the influences of the planets and celestial spheres over the actions of humans when we now trust in the reality of the Fed, green shoots and Hope and Change. They were so deluded back then.

ebworthen's picture

Nevermind.  +1 for the sarcasm.