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Commodity Liquidation Accelerates As Margin Calls Strike
There is a clear and significant sell-off across all risk assets. Equities are leading CONTEXT lower (after converging perfectly pre-Fed) but equities and credit are falling tick for tick for now with HYG (the high yield bond ETF) falling significantly (which remember has been critically important recently). Commodities are where the real action is though for now with Silver now down over 4.5% on the week (and Gold and Copper not far behind). The velocity of the moves suggest the disappointments in other risk assets are leading to forced selling as a dearth of QE-related comment from Ben and the boys has the USD now over 2% stronger on the week legging higher once again as EURUSD is now -220pips from its early morning highs.
Oil is holding up for now - pulling significantly away from USD's strength this week but the gappiness of the moves all week (from late sunday night) in Gold, Silver, and Copper suggests some painful calls are being made.
CONTEXT has been gappy today as the initial spike (thanks to Oil's jump) and drop (thanks to the TSY auction) seemed to act as a magnet as we went into the FOMC call (with ES just in line with VWAP). Since then equities - which remain rich relative to credit markets on a medium-term (where we see value for stocks given current high-yield levels at around 1208 for the S&P 500 cash index) have underperformed CONTEXT as oil remains a modest positive bias and FX carry crosses are stabilizing.
UPDATE: HYG just rallied hard off the lows and disconnected from stocks and credit - it seems they really do need to save that asset-heavy ETF.
Charts: Bloomberg and Capital Context
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Goldman off 5% from morning highs . . . will there be MF probe there as well as JPM?
Market feeling very quesy now.
QE Hangover.
euro is plummeting towards 1.29
Best way to prop up the markets: Kinetic Military Action.
http://www.prisonplanet.com/us-special-forces-mass-on-syrian-border.html
And DEBKA will soon reveal how Iran not only hacked into the US drone, but also into the black ops satelite controling all drones in the ME!
While I'm in agreement that war is a very real and near-term possibility, I can't quite help but think these various reports could be used to push oil up and down, in the same way ECB rumors were used to spike ES at various intervals?
Oil still holding up, but I wonder if the rug could get pullled out.
If anything is headline driven, oil is more than anything else.
rudolph running over the other reindeer
Please make the bad men go away!
crap, got my self cought on other side of the trade, i was long euro from 1.3060 and damn.....
Market just found out Santa doesn't exists
:) +11
You better watch out, you better not cry. You better not pout I'm telling you why.
China:
http://globaleconomicanalysis.blogspot.com/2011/12/chinas-deserted-fake-disneyland.html
soon to be Orlando
I wonder if there is a warehouse full of Sleeping Beauty costumes on site.
Something!! Bitchez (no idea what to invest in at this point)
then short
Sell puts in SLV....lay in the weeds to buy it lower and get paid to do it.
Jan 2012 27 strike is bringing 0.62...equals 20+% yeild to wait.
Selling puts on such a manipulated product could prove very costly.
Then sell put spreads....
sell the 27, buy the 25.....
I wish I knew what this means.
Gold and Silver down? I don't think so! Paper is down!
Buy The Dips! MERRY CHRISTMAS!
Buy Physical PM's!
If you want paper buy a WSJ!!!
@ Siver, "Something!! Bitchez (no idea what to invest in at this point)"
Ammo, water, storable food(go to EfoodsDirect.com), first aid kit(medicines), portable solar power, silver and gold. A good Zippo lighter wouldn't hurt either.
Got all of the above thanks. Thinking about liquidating some FRN's into more silver though. Found a place/product with a 2% premium over spot ... tempting.
@ SilverRhino, "Found a place/product with a 2% premium over spot ... tempting."
Go for it!!! My quote, "He who hesitates, masturbates."
I love my Zippo's but they always run out of fluid when you need it the most. I suggest stashing cheap Bic lighters everywhere, and they'll still work after being submerged.
Just my 2c
@ Srrut,
Steel wool + a 9volt = Fire. Cha ching, now you have my 2c.
strange first day of posting 4U
Bics are no longer cheap; however, inexpensive chinese knock-offs can be purchesed at the dollarStore @ 3-for-$1
I've also learned to throw one of those good 'junk silver' quarters in my
plastic water bottles (that I keep refilling from my Brita)..
Sure keeps the water fresh...
You heard it here first..Try it..
Plastic water bottles, that is...
Invest in volatility VXX or TVIX. VIX has some catching up to do imo
yeah its not biting? complacency = crash or prescience = levitation
VXX? You'll need to start with a lot of $s because you'll end up with just a little. One of the worst levered ETFs
A wise man once said, Cocaine is a helluva drug
I'm RICK JAMES, Bitch!!!
http://www.youtube.com/watch?v=yUrqy1Ec06c
APPL puts
I am staying alert for a buyng opportunity in PM's. I am prepared to buy in 4 or 5 increments.
My first will be at 3:30pm eastern for 22% of my total purchase until end of January.
@ Dona,
I assume your taking physical, not a fake paper promise right?
I am building up physical positions every two months and heavier allocation when it's down hard.
You missed today's absolute bottom by a few minutes.
I'd much rather hold Bonds (Debt) then hard Assets...lol
NO EASY QE3....NO HEDGEE...won't get more QE until real implosion in Europe happens...really hard to tell what will trigger it as Greece just gets worse and worse and they won't let even that bugger to hit banks for the "agreed upon haircut of 50%" which of course wouldn't trigger a CDS default which wouldn't take down French banks...for want of a nail....
I still do not understand about the greek non-event haircut why did not anyone buy greek debt and declare he/she was NOT accepting 50%. But I also did not understand that MF could take my money away from me. Probably my fault.
My failure to capitulate on my tiny gold holding bought near the highs jas introduced a new initial condition into the universe with positive feedback loops magnifying downward pricing pressure.
Gold will form a base when I sell.
Beware. I am thinking of doubling down. Sometimes my mere thoughts of buying precious metals, f the universe believes they are sincere, can send contrary reactions immediately into the markets.
Since you wrote your post, top, da bitch got banged down another $20!
24hgold.com
kitco.com has rhodium down $100, cheaper now than platinum, which itself is cheaper than gold.
Junker, gold down another $5 or so since you came by.
ever try to sell rhodium?
anybody?
let me tell you about the time one of my friends...blah. blah. blah...and he still hasn't found a buyer...
The End
@ DoChen,
I see you sufer from short - term memory loss. USD ain't worth shit. Forgot about that secret extra 7 Trillion bailout on top of the 7 Billion the Bush & Obama puppet regimes/Fed gave to the Illuminists/Bankers? I didn't.
I beg to differ.
Price of Dollar denominated U.S. govt. debt is very close to a 100-year high.
Chupacabra, apparently down here in Peru (on visit), they don´t have any chupacabras, at least my in-laws don´t talk about them....
Hey, yo, I´m on YOUR side! And the latest figure I saw was some $30 trillion (ZH article last night). It´s like the numbers quadruple every couple of days! I wrote at my blog a little over a week ago that we were getting ROBBED BIG TIME when Proton Bank and MF Global total were a mere $2 trillion or so.
I should write an update there... $30 tn is a lot of money.
As for the US$, if you had been paying attention to what the Bearing writes fairly often, then Au is off to $55,000 or so per oz. My Trail Guide:
fofoa.blogspot.com
Thanks, brother, good look'n out. I check out your blog. Thanks.
smack down, bitchez.
getting out of the euro and into the dollar, the false coupling to the market, and liquidation of commodes, er, paper commodities will do that to our PMs in terms of FRNs.
the key is to see past the fiat strike price, keep in mind it's heavily manipulated (see hyperleveraged ETFs), and get ready to buy some more.
their intrinsic value ain't going anywhere close to zero.
I just hope that I can find physical to buy after europe goes BOOM!
I see a 40% drop acorss the board in EVERYTHING!
and that is my kind number not to be confused with 500 / 5,000 selloff! LOL!!
The Credit Markets will FREEZE! in Europe and the rest of the World will FREEZE along with Europe!
The question really is why?
everyone knows whats going to happen when Europe Seizes.. so why do the powers that be want a Global Crunch?
so they can be seen riding in to save the day thru printing?
make printing / printers the good guy(s)?
the good news is this will take the pressure off of oil for a good little while.
Got Food? Water? Medcine?
I hope you have something other than Faith and FIAT!
Hiya JW,
Since it is hard to predict when the eurozone is going to bust, may want to buy some now. ´Cause if you wait until it´s all down 40%, no one will want to sell...
I will be back buying in the physical markets when I am back in the USA (Thursday).
I am a buyer on down days.. so i have more than a few foot stooles! lol!!
Touché mon amis pirate! LOL...
DoChen,
Hurry home!!!!!, we need to have all the help we can carting new purchases!!!.
Someone is hurting bad, to be selling Phys IN this scenario.(of course they do not read ZH, and know the real score).
We KNOW it's going much lower,but thats fine by me, I am going to add at least another 15-20% into my hot little hands.
DCA, wins every time.Sooner or later(sooner I feel) the USD will not be the GO to dead presidential currency of choice,it's as worthless as the rest NOW, problem is Pavlov's Dogs haven't figured this out yet.And when they do, it will be too late.
UBS says Gold Guns and Canned Goods.. its not just us fringe people at zerohedge.. now its one of the largest banks in the World as well, Oops!
http://www.youtube.com/watch?v=C8FIXhDJ8o0&feature=player_embedded
Uploaded by RussiaToday on Dec 13, 2011
Every week Max Keiser looks at all the scandal behind the financial news headlines. This week Max Keiser and co-host, Stacy Herbert, discuss virtual dollars and American plots and tinned goods and small-caliber weapons. In the second half of the show, Max talks to Detlev Schlichter about elastic money and financial crises.
KR on FB: http://www.facebook.com/KeiserReport
Got $200? That's what I tell people it will cost them to be able to sit in their home for a month, if necessary, while the world burns around them (assuming they can defend themselves). Store water in large garbage bags inside large plastic trash cans. Buy a can opener and some cases of canned food you don't mind eating straight from the can. If you haven't done anything else, do that, then work on a real survival checklist.
If you're one of the few ZH readers who doesn't have a month or two of food and water on hand, you're either terminally lazy, or you have a lot of faith in this system. If you've got time to be reading this, you've got money. If not, forget this crap and take this time and turn it into money. Let's put it in perspective: It would be better to literally rent out your ass, now, on your own terns, than do nothing and have to rent out.... you get the idea. If you've got a wife and/or kids, the odds are that it's all on you.
We've spent decades living in a system where others control our destiny, with no real way to fight the system or secure a real place and stake in the world. If the doomsayers are right, that may be about to change. And securing a place in the new world doesn't require you to play into their system or hands, it requires the opposite. With change comes opportunity, we'll each have our own chance to help make a new world. Whether we are a help or hindrance in that effort is largely dependent upon what we do right now. It's all on you.
buyingsterling
(assuming they can defend themselves).
IF they can defend themselves.
IF they cannot, unless it's from a physical/mental incapacitation issue, I won't cry a tear for the MAN of the house.
Because your commanded to CARE for your family,that also means PROTECT them to the death...........not a suggetion.
If you have been one of the pussies and ant'is on the anti weapons train, then God help your family, I hope you hang from your nutsacks if they suffer because of your idiocy.
It's not too late by any stretch to learn basic self defense with a shotgun, a revolver, or a rifle.(1-2 days basic teaching, will save your bacon)
If your prepared to watch your famly be murdered,then so be it.
It's on YOUR head.
Just one word. Asshole.
Well, no plunge.....what holds this market up? No QE, the dollar is rising. Are US equities now the least stinky investment?
Wait until the orders come in tomorrow morning
Good luck with buying Gold :-)
European central bank gold liquidation continues.
Interesting story, where did you find this? I have looked high and low and see nothing that suguests banks are liquidating anything.
>> nothing that suguests banks are liquidating
Who ever is liquidating it doing at the least profitable time. They are routinely dumping massive quantities in off hours. Pretty obvious it a concerted effort to drive gold way down. It is my opinion gold will close out negative for the year.
There was a discussion a couple days ago that the drop in gold was being driven by banks (and possibly CBs) leasing gold at negative interest to get some short-term cash. Which means there is a cash flow problem at the banking level, e.g. liquidity. Which means SHTF for one or more somebodies.
We may be seeing the early stages of a positive feedback loop on deleveraging, in which case the bottom can drop out pretty quickly. One would have to be insane to sell physical at the posted paper price of gold, however, so we're probably also getting closer to the decoupling event. If someone is dumb enough to sell, by all means buy.
+ $55,000
I am really enjoying reading your posts, seek. Just lookat in the last half hour, gold down, what, $25?
It sure would be interesting to know who is getting splattered by the Fan now... The only (imperfect) tool I have to use to look at physical scarcity is the 24hgold.com JV widget with eBay (at 24hgold.com), which last I looked showed a nearly 11% premium for AGEs over spot. Typically the premium ranges between 5.5% - 8.5%. ASEs are at 80% (!!!) over spot, probably a glitch...
Maybe I´ll pop over to Turd´s site and see what he has on his mind.
I just hope that on Thursday (when I am back in the USA) that I can buy one more time (at least)!
I wouldn't be shocked if it was JPM selling into the downtrend, given that trashing silver is their job these days.
I'm sure it's one or more of the Euro banks... and HSBC, since they obviously had exposure related to MFG?
Good point on the premiums, I've been thinking that one of the more useful charts I can imagine would be a physical v. paper premium time series. I'll need to go dig some.
DoChen,
Someone is drunk, or trying to FRANK folks, the spread at MY place for AGE's is not even 5%.
nasdaq, xlf, steel (slx), palladium might all close below the 50dma today. Strong selloff in retail today as well...
Trying to position for the year end - TLT looks strong for the short-term.
To be stuck inside of the market with the Biflation blues again!
Commodities selling off. Retail sales severely disappoint. EZ disintegrating. Everyone rushing to safety. And yet oil is over $100. Again. And EZ, UK, JPY CPIs are all stubbornly high.
It's picking up steam now, here's how: the economy is slowing down worldwide with massive austerity programs beginning to bite. And debt-deflation goes on and on. US family net worth declined over 4% and incomes are dropping. No help from employment. But the cost of raw materials, the cost of doing business and living are staying high RELATIVE to all this. Not hyperinflating, but still inflating away while the ability to afford the prices drops.
THe net result is buying power getting crushed. The Fed was wise not t go to QE3 else prices would rise farther and faster than incomes and net worth, making the process even worse.
Faster and faster will the process go
Prepared for this you must be
Being a smalltime kinda guy, I'm waiting for silver to drop below $30.00, then buying more.
Too bad ammo isn't dropping as fast as PMs
I've found that the pistol and rifle ammunition I need has been almost the same price for almost 1 1/2 years. some dips here and there (small ones).
hairball48,
Rat on, you cannot even BUY half assed 7.62x51 for less than $500.00 a "M", Milsurp.
IF you can find it.
Elliott Wave guys are calling for Silver to hit $22 in the next leg down.
By the way, people. For some perspective (lest we forget), gold opened 2011 priced at $1120 on 4 January 2011. It hit a low of around $1060 on 5 February. Even if gold fell to $1500 by year's end, you're still looking at a greater than 30% annual return on investment. So when the gold bears begin to reawaken from their hibernation, just remember where this year started!
What in the world is going on in Gold today?
I guess the downgrade/US debt has nothing to do with the price of gold per the fed.
Manipulation.
Apologies for stating the obvious but I'm so used to it now that I laugh whenever I see a drop :O)
Thank you Bernank. I BTFD. 357 shares of PHYS. I like 357, it rhymes with my S&W.
Now for a little panic and a rush to safety in gold...
Hello all,
I am locked in a 403(b) until termination or resignation. Is there anyway I can protect that money, or should I count it as a loss? Thanks in advance
n8dawg84
How much to lose, and can you work a deal with your Boss to lay you off long enough to get it out, and keep your job?.
If we're talking BIG bucks, I would try ALL avenues.
yeah apparently the only thing that makes gold and silver go up now is money printing, and if we don't get it, gold and silver might get destroyed. I guess deficits don't matter anymore
Take a look at the trading channel in the 10-yr note since 1987 or so. There seems little doubt that the yield will be driven down to almost zero if needed.
http://finance.yahoo.com/q/bc?s=^TNX+Basic+Chart&t=my
Edit. Try this instead http://tinyurl.com/cpjxkx4
No printing + deleveraging due to faked capital = MUCH lower gold priced in $
No printing? Must be fake interest rates on fake debt. FAKE.
Contracts of futures are being sold while physical gold/silver are fasting disappearing and there is going to be a ‘out of physical’ flag being raised soon.
misplaced post.
Fucking Bernanke... PRINT YOU FUCKER.
break down, shake down, golds goin to 500.00 !!!!
dude, i hope (that there is some to buy at that price)!
Haha, I hope so. I'll be buying hand over fist at that price.
Ben just said he was not going to do a QE II...but they are under the table...they are loaning the EU as much cash as they can print...and they are buying the EU bonds too...I think when this is all found out...how corrupt and how much lying was going on...that the world as we know it..just falls apart...the Bankers are drowning..going down for the third time..and everyone is trying to save them...because THEY are THEM....they are all the same...its us vs them....and they have the printers
Guess it could be a tactic freeing up quite a bit non-paper gold for JPM and others to save their faltering physical market. If the MFG story indeed was triggered by them to prevent a default in physical delivery, this might be the only way for them to force the real stuff out of scared/weak/stoopidly leveraged hands.
I'd think. Don't fall for it...but do buy 'it' though ;). If it is still to be had. I wonder...
Just my 2ct
If anyone believes that we are in normal times, then you need some serious help.
All I can say is that I'm waiting for silver to fall to sub $20 and I'm loading up big time.
The global economy requires a reset and this is not going to end well.
we all know to expect the unexpected...we have to live with gold and silvers paper imposter's...there are 2 options..
1. there is no alternative to our force fed diet of fiat currency.. because gold and pm's(paper imposters) are equally poor stores of value..so bend over and take it up the a***
2. Real pm's are the end game and the only possible lifeboat that will survive the cesspit sea of dying fiat currencies as the physical metals decouple entirely from the paper imposters...
i have no idea of time frames whatsoever or how ugly the journey might be.. but i know option one is devoid of any hope at all so i will go with option 2 because "the world belongs to optimists , pessimists are merely spectators(waldo emmerson me thinks)"
Funny how these margin calls crop up when the bottom is falling out of levitated equities. Anything to give CNBC the opportunity to perpetuatethe lie that PMs are moving in tandem with other "risk assets."
PMs are selling off so the banksters and other criminals can raise cash meet margin calls or raise capital? Is that what's going on?
Wow Dick Bove came right out and said it:
http://finance.yahoo.com/blogs/breakout/fed-bankers-cannot-trusted-dick-bove-194940492.html
Forgive my cluelesness, but how could the divorce between paper and metallic gold happen?
Will the miners and large physical holders make a new acronym to sell the metal at the price buyers are ready to pay for phyz? Will some regulatory agency decide that GLD paper is an economic object that is not gold and have it sold under its own name? If today's "gold" is headed toward $500 or $25 an ounce and there is not a single gram of it to be bought anywhere without a 1900% premium, how will price discovery/exchange/sales happen technically?
I love the question but I'm clueless too and have no answer. I will wait patiently with you for somebody to say something different to..
in the history of fiat, in the last 5000 years, 2000%, 1900$/oz, PMs, must have guns & ammo, be prepared..
I admit, I'm confused. I have ETF gold but it's not GLD.
Physical gold only in your possession is what I would recommend. The answers to all important gold questions happen to be at just one site!
fofoa.blogspot.com
But, you must be prepared to read long and hard (for me anyway) pieces. I would suggest starting his late 2009 pieces (after you have read the article I just mentioned above). Lot of reading and hard. But very worthwhile. Especially if gold goes to FOFOA like numbers of $60,000 / oz.
fofoa is interesting, but I couldn't find there an answer to my questions: what can be the process by which paper gold and physical gold will become separate market objects? under which political/financial/ideological/legal conditions can this event happen? What are the necessary steps to go there?
Physical and paper gold will have to diverge at some point, when metal rarity will force a physical price at odds with a value of paper that will tend towards zero.
So there will be a tear/rift/chasm/earthquake/tsunami/godzilla/something in the gold market.
What will it be?
In a nutshell, market demand falling for paper gold and rising for physical gold. A COMEX paper price that is falling while physical is unable to be procured at said falling Comex price. Essentially a loss in confidence in paper contracts. FOFOA has discussed the MF Global collapse in the context of these ideas in his most recent post, Unambiguous Wealth 2 – The MF Global Chronicles.
++++++++++++++++++++++++++++
FOFOA offered this hypothetical for thought:
Point is, so what if everyone panics out of every kind of "gold" other than physical? As long as that liquidation is happening at a faster pace than the liquidation of physical, and remember there are some giants that are buying physical on the dips, that puts extreme pressure on the BBs. If the price drops that much, they've got to source the physical they sell at those lower prices for the price of paper gold to remain representative of the value of physical. If your assumption is that the CBs are still willing to support that connection with physical, as GATA's assumption is, then sure, they can handle it with CB backing. But I don't think the CBs are doing that. So I guess we'll see. If it drops to $1,400 I'd expect to see the biggest GLD puke ever, since that may be the only place for the BBs to get that kind of physical *IN SIZE* anymore. That's my thesis. The GLD puke has nothing to do with the AP's managing the NAV of GLD nor does it have anything to do with the sentiment of GLD investors. It has everything to do with the BB's (who are also APs) needing massive amounts of physical during the correction."