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And There's Your Perfectly Leaked Explanation: CME Hikes Gold Margins, Again, This Time By 27%

Submitted by Tyler Durden on 08/24/2011 16:41 -0400

Two weeks after the CME hiked gold margins by 22%, and two days after the Shanghai Gold Exchange sent them higher by 26%, here comes the CME, as we expected, with another 26% gold margin hike (previously: "Should we expect 3 more SGE margin hikes in the next 2 weeks? Or will the CME rightfully accept the baton and do everything in its power to dent the parabolic rise in the alternative reserve currency? We are cautiously looking at what the CME will do today and will advise readers."). And now we know that this particular margin hike was leaked well in advance, and explains the entire $100 plunge in gold today. And as a reminder, the August 1 CME margin hike worked... for about 30 minutes.

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Thu, 08/25/2011 - 01:36 | 1598280 jomama

good luck robbing others for a living. odds are pretty good they're armed as well.

Wed, 08/24/2011 - 21:52 | 1597805 Rynak

Instead of hackfixing special cases, i have a simple proposal:

Constitutional law: any form of credit (including margin), may never ever be modified after the intial contract against the lenders benefit, unless the client explicitely agrees to it, where that agreement may NOT be made ahead of time - so, it may not be agreed uppon during contract creation, only when the adjustment is actually requested to go into effect.

Consequence regarding margins? Well, it would mean that CME either would have to set margins high enough to never ever hike them, or risk losses, by having to deal with the requirement that clients must AGREE to hikes on a per-case basis!

Wed, 08/24/2011 - 23:14 | 1598038 pokerplayer

So how far are we from zero margin on the CME?

Wed, 08/24/2011 - 22:13 | 1597871 Fiat2Zero

Ru-oh Raggy...PMs starting to climb in Asian after hours.

Another margin hike of 30% coming to "teach gold a lesson"?

Don't worry we'll be on a zero leverage cash basis soon!

Thu, 08/25/2011 - 01:35 | 1598278 jomama

yoinks!

Wed, 08/24/2011 - 22:14 | 1597874 Fiat2Zero

Krugman is going to look so fucking stupid when this is over. Economists will precede bankers to the gallows. I'd hate to be one of his fucking grad students.

Wed, 08/24/2011 - 22:23 | 1597910 cranky-old-geezer

Go ahead banksters, hammer it down. We'll back up the truck & load up.

BTFD

Wed, 08/24/2011 - 23:14 | 1598035 pokerplayer

Yes but it would be nicer to know how much longer they can hammer it down (with margin increases) then we can back up the truck and buy more than we could otherwise.

Wed, 08/24/2011 - 23:24 | 1598054 Lazane

You paper mache pushing bubble heads with your bulging badges of fraud need to find your salvation or maybe you would like to end up here...

http://www.youtube.com/watch?v=BwA3AJPWphQ

Thu, 08/25/2011 - 00:13 | 1598131 yabs

haha million dollar bonus is sticking up for Krugman

http://thetruth-jules.blogspot.com/2011/08/paul-krugman-once-again-proving-he-is.html

what a joke

Krugmans analysis of economics is this: print more money

yeah right that works

ask Zimbabwe how they are doing

Krugman is a failure as an economist and as a human being.

He knows nothing what so ever apart from getting blowjobs from bankers

Thu, 08/25/2011 - 00:23 | 1598144 actour22

you guys are getting a little lame thinking that margin hikes are the reason gold topped or the only reason gold cant go up everyday.. Zero hedge top ticked 1911 on gold the other day arrogantly claiming all shorts should cover before a 10000 price per oz is at hand.. At some point all the money print is priced in...

Thu, 08/25/2011 - 00:52 | 1598204 Shineola