This page has been archived and commenting is disabled.
The Gold "Rehypothecation" Unwind Begins: HSBC Sues MF Global Over Disputed Ownership Of Physical Gold
That paper gold, in the form of electronic ones and zeros, typically used by various gold ETFs, or anything really that is a stock certificate owned by the ubiquitous Cede & Co (read about the DTCC here), is in a worst case scenario immediately null and void as it is, as noted, nothing but ones and zeros on some hard disk that can be formatted with a keystroke, has long been known, and has been the reason why the so called gold bugs have always advocated keeping ultimate wealth safeguards away from any form of counterparty risk. Which in our day and age of infinite monetary interconnections, means virtually every financial entity. After all, just ask Gerald Celente what happened to his so-called gold held at MF Global, or as it is better known now: "General Unsecured Claim", which may or may not receive a pennies on the dollar equitable treatment post liquidation. What, however, was less known is that physical gold in the hands of the very same insolvent financial syndicate of daisy-chained underfunded organizations, where the premature (or overdue) end of one now means the end of all, is also just as unsafe, if not more. Which is why we read with great distress a just broken story by Bloomberg according to which HSBC, that other great gold "depository" after JP Morgan (and the custodian of none other than GLD) is suing MG Global "to establish whether he or another person is the rightful owner of gold worth about $850,000 and silver bars underlying contracts between the brokerage and a client." The notional amount is irrelevant: it could have been $0.01 or $1 trillion: what is very much relevant however, is whether or not MF Global was rehypothecating (there is that word again), or lending, or repoing, or whatever you want to call it, that one physical asset that it should not have been transferring ownership rights to under any circumstances. Essentially, this is at the heart of the whole commingling situation: was MF Global using rehypothecated client gold to satisfy liabilities? The thought alone should send shivers up the spine of all those gold "bugs" who have been warning about precisely this for years. Because the implications could be staggering.
Probably the core primary consequence of this discovery, which obviously has a factual basis, or else it would not lead to an actual lawsuit between two "reputable" firms (aka ponzi participants), is whether gold in the GLD warehouse, supervised by HSBC, is truly theirs, or has it all been hypothecated from some other broker who never really had the asset or the liquidity, and so on in what effectively can be an infinite chain of repledging one asset to countless counterparties. Because if there is on cockroach...
Suffice to say, expect either a prompt settlement in this lawsuit, or a fervent denial by all parties involved that any gold was misplaced. Because here is the punchline: each physical gold or silver bar has a unique deisgnator that should never be replicated, yet this is precisely what happened to lead to the lawsuit! In a non-banana world, there should never be any debate over who owns a given physical asset, as replicated ownership (note - not liens) effectively means someone stole the gold (or there was counterfeiting involved) and was never caught... until MF Global finally expired of course.
So in other words, is this the eureka moment when everyone realizes that any gold, be it paper or physical, is either a irrelevant electronic binary claim held in some semiconductor, or at best an asset in some vault, that the brokerage next door suddenly also has claims over?
The end result is that the biggest loser is Joe Sixpack who bought the gold, and decided to keep it in a bank warehouse for "safekeeping" only to realize said gold will never be seen or heard of again.
From Bloomberg:
Five gold bars and 15 silver bars underlie eight Comex contracts between the brokerage and client Jason Fane of Ithaca, New York, London-based HSBC said in a court filing yesterday. Both parties have asserted claims to the bars, creating difficulties for HSBC, which is storing them, the bank said, asking a judge to decide who the rightful owner is.
“HSBC has received conflicting instructions regarding ownership and disposition of the property,” it said. “Accordingly, HSBC is exposed to multiple liabilities with respect to the disposition of the properties.”
According to Fane’s letter, the five Comex gold contracts are for an average of 99 ounces of gold each.
Giddens, who is liquidating the brokerage, has transferred about 38,000 commodity accounts to other firms. Three transfers of collateral made and pending will give commodity customers more than $4 billion of their assets, according to court filings.
The punchline:
The judge handling the bankruptcy said today he would deal in January with issues about distributing physical goods, such as gold and silver bars, after lawyers for some customers said they couldn’t get their share of the payouts because bars can’t be broken into pieces.
...indeed there is a reason why people say gold can not be diluted.
As for our advice: move any gold out of the LBMA or CME warehouse system immediately. And only treat any GLD investment as a day trading vehicle that can and will be lost the second there is a global liquidity or solvency freeze, because that particular asset will be wiped out as easily as "C:\format C:"
The brokerage case is Securities Investor Protection Corp. v. MF Global Inc., 11-02790, U.S. District Court, Southern District of New York (Manhattan). The parent’s bankruptcy case is MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
Update: as reader D points out, none of this should come as a surprise: after all the UK financial regulator, the FSA, already warned about each step of this unwind back in March 2010.
3.1 In this chapter we consider restricting two practices we believe pose an unacceptable risk to protecting client money and assets, and financial stability.
a) Restricting the placement of client money deposits within a group
Scope
3.2 Please note that our policy proposals in this section apply to UK authorised firms that place client money in client bank accounts held with a group bank, credit institution or qualifying money market fund. These requirements will not apply to incoming EEA firms conducting investment business, as under MiFID regulating client assets is a home state responsibility. We will consider extending these proposals to general insurance intermediaries when we begin reviewing CASS 5 – Insurance Mediation Activity in the first quarter of 2011.
Intra-group client money deposits
3.3 CASS contains guidance requiring firms to conduct an appropriate level of due diligence on institutions with which client money is held and to ensure deposits are appropriately diversified. We currently allow firms to hold client money with a deposit taker within the same group as the firm subject to appropriate due diligence and diversification.
3.4 There is no standard market practice for depositing client money within a group structure. For example, a number of investment firms take an explicit decision to hold client money deposits outside of the group, while other firms deposit significant amounts intra-group. Existing handbook provisions seek policy outcomes that ensure an appropriate level of diversification is achieved to protect clients’ money.
3.5 CASS contains provisions regarding a firm’s selection of a bank, credit institution or qualifying money market fund. A firm must exercise all due skill, care and diligence in selecting, appointing and periodically reviewing the institution where the client money is deposited and arrangements for holding this money. Handbook guidance also provides a list of matters a firm should consider in the process.
3.6 The money deposited at a group bank is held on trust by the firm for the firm’s clients, but it is treated as an ordinary banking deposit at the bank. Put another way, all client money at the end of a chain will eventually be held as a deposit. There is always a risk that a bank with which the deposit is held will enter insolvency proceedings and at this point it becomes possible that not all money deposited in client bank accounts as client money will be available for return to the underlying clients. Accordingly, the regime does not envisage a 100% return to clients in the event that client money is lost due to a bank’s insolvency, with CASS providing that clients will generally share rateably in the loss.
3.7 The issue under consideration is not that the funds are held as a deposit, but that when held within a group, there is an increased contagion risk that both the investment firm and the group bank or affiliate will fail simultaneously (or one will fail shortly after the other).
3.8 The resulting risk is that a firm will place an inappropriate amount of client money intra-group, usually as a source of liquidity, which has a lower cost of capital than external sources. Furthermore, as a group’s financial position deteriorates, there is a risk that firms within the group will deposit more client money intra-group to fund operations. This may give clients an inappropriate level of exposure to the bank’s credit risk. It also may lead to clients unfairly bearing the risk of the group as a whole, rather than just the individual firm. The existing sourcebook provisions which address this mismatch of firms’ and their clients’ incentives can be strengthened so the risk to clients is mitigated in the event of a firm’s default.
3.9 Imposing a hard limit on the proportion of client money which can be held intra-group is attractive and will mitigate concentration risk. However, limiting the level of client monies held within a group may increase overall credit risk where outside options are less highly rated. We have considered consulting on the basis of a 20% limit in order to fully identify stakeholders’ concerns, particularly if there is a knock-on effect on liquidity.
3.10 We have worked with firms during 2009 to reduce the concentration of client money held intra-group. During pre-consultation firms estimated that the proposals would result in an increase of approximately 10–25 basis points for additional costs, together with removing stable funding and increasing compliance and operational overheads.
3.11 Accordingly, we propose limiting the amount of client money held by a firm which can be deposited in intra-group client bank accounts to 20%. We understand firms may require some flexibility in holding money intra-group (for example, where a firm’s client specifically requests their money is held with that specific institution) and propose to address this on a case by case basis. We also propose changing existing guidance into a rule to provide a clear basis for our expectations.
3.12 We take this opportunity to highlight that our proposal to re-introduce a client money and asset return to the FSA (see below) which includes content regarding intra-group client money deposits.
b) Prohibiting the use of general liens in custodian agreements
Scope
3.13 Our proposals apply to all UK authorised investment firms and overseas branches of these UK firms. These requirements will not apply to incoming EEA fiirms conducting investment business as under MiFID regulating client assets is a home state responsibility.
3.14 Some firms in the UK appear to have inappropriately allowed custodians and subcustodians to include general liens covering, for example, group indebtedness to the custodian or sub-custodian in contractual agreements, or they have failed to pay due regard to this issue. As we have observed from LBIE’s insolvency, liens have contributed to significant delays or obstacles in an IP’s ability to recover assets from depots not under their direct control.
3.15 CASS 6.3.3G requires a firm to consider the terms of its agreements with third parties with which it will deposit a client’s safe custody assets. As part of this guidance, the firm should consider restrictions over the third party’s right to claim a lien, right of retention or sale over any safe custody asset in the account, as well as identifying client assets separately from assets belonging to the firm.
3.16 We believe the sourcebook can be enhanced with hard rules rather than guidance in this regard. This would enable us to effectively monitor compliance and take enforcement action where appropriate.
3.17 Accordingly, we are consulting on the basis of changing the existing guidance into a rule. We propose creating a rule that prohibits using general liens over client assets which are held under custodian agreements, except to cover the situation when a firm (or if the client has a direct relationship with the custodian, the client) does not pay custodian fees and charges to the third party holding the custody assets.
»
- 106083 reads
- Printer-friendly version
- Send to friend
- advertisements -
You think private vaults list in the yellow pages?...there is a whole other world out there you obviously know nothing about.
Enlighten us all (including Kyle Bass who advised University of Texas on their gold holdings)
or...shut the fuck up.
Enlighten us all?....Fuck you Bob. You are the stupid dipshit who advised us all to sell our Gold, told us all it was overvalued. Ain't no recovery from that sucker.
You're GODDAMN right I did. WHEN IT WAS TRADING @ 1,900 per ounce.
Stop fucking me with your ad hominem.
You've been short gold since your first post.
That is complete bullshit.
I would like your source(s)
* Sigh * OK, but will you then STFU??
Clicking on your name gets to your page, which using the "track" tab shows your posting history. Going to the last page of this shows the oldest thread you posted on. Which is this one...
http://www.zerohedge.com/article/it-getting-ugly-quick-fiat-land-sp-now-...
And on this page, and I quote --
Now, please get back in your box, and stop being such an asshole to everyone.
That was from MAY asshole.
Just shut the fuck up.
2010...
Ah 5/11/10 I see.
I'm still waiting for my gold short comment (that was supposedly my FIRST COMMENT)
saulysw already posted it above and below.
Admittedly by the time stamp it was your third post in your first thread.
Here you are 4 days later commenting it was no wonder gold was near all time highs: http://www.zerohedge.com/article/goldmans-big-picture-view-fx-beyond-jus...
Same day talking about how .gov will not get your gold: http://www.zerohedge.com/article/rick-santelli-tells-truth-about-gld-and...
Again the same day talking about how gold is the safest asset: http://www.zerohedge.com/article/rick-santelli-tells-truth-about-gld-and...
It's almost like you yourself don't know what you think.
I was long gold, I won't deny that.
But than when gold was at 1,900 I went short.
So what's your point? That I know when to buy? Know when to sell? Know when to short?
Here's when I went short
http://tradeonfire.blogspot.com/2011/09/gold-linear-regression.html
No you stated on 5/11/10 you were short. Afternoon London fix on 5/11/10 was $1222.50 which was a record at that point. Afternoon fix on 5/21/10 was $1179.75. It didn't dip below that until 7/27/10 when it was fixed at $1168.00. The afternoon fix on 7/28/10 dipped to $1157.00 and has never looked back. So lets say you closed your short on 7/28/10 you made $65.50/oz(excluding of course any intraday lows you may have perfectly timed).
Then you went long till $1900?
All I ever tried to tell you was the truth about the fractional reserve gold and silver markets. You don't listen.
Connect the dots Bob. This post should have helped you. Instead you try to say nothing is wrong. LOL. Open your eyes man.
Where did I say nothing was wrong?
Just shut the fuck up.
You were so wrong it should be embarrassing
I've been telling people to buy gold and silver since the late 1990's. I'm hardly "embarrassed" by that call.
In the minds of trolls, you only made the call shortly before the latest peak. If the spot price is above the last peak, you are investing in a bubble. There is no way to win. Or rather, no way to overcome their bias.
Some people choose to accumulate over time with the paper they get every 2 weeks. When you have more paper than you need(maybe that day will come for you in the future), only then will you realize why some people just BTFD while you post scare tactics. Hope that works out for you.
Someone should check my calculations on this, but it looks like 1 billion dollars in gold at today's prices would be about .94 cubic meters. Probably not a whole lot more in well stacked bars. If you could find a suitable private vault, you sure wouldn't have to rent much space.
lol, you keep thinking all of that. Makes it easier to enslave you.
Here's a hint--it's a lot harder to find and break into private vaults than it is for some paper pusher at a bank to press a few keys and say "AAAAAAAAND it's gone. Poof!"
Whatever you say.
You've been right every step of the way.
What's your 6 month projection for gold/silver?
....oh yeah, you won't because you don't know what you're talking about (and last time you did you fell flat on your face)
Right, you want me to make a prediction about the price level that will be displayed on a bankrupt exchange in 6 months, and if I don't make one I'm an idiot?
Sorry, kid, you don't get to frame the conversation any way you like. This exchange is going into terminal decline. It could go literally any day, or it could be another year of a thousand cuts. Who gives a fuck? Just keep doing what I tell you to do, and you will come out worth your weight in gold. Period.
"Right, you want me to make a prediction about the price level that will be displayed on a bankrupt exchange in 6 months, and if I don't make one I'm an idiot?"
No one said you would be an idiot. But if you're gona' come around and tell people to buy silver (or anything) you should tell them where you think that particular asset will be in 6-12 months. Otherwise you should shut the fuck up. It's as simple as that.
"Sorry, kid, you don't get to frame the conversation any way you like. This exchange is going into terminal decline. It could go literally any day, or it could be another year of a thousand cuts. Who gives a fuck?"
Who gives a fuck? Is that a serious question? Your advice is shit, it has been proven to be shit and your cavalier attitude proves it. If people bought silver at $49 based on your whimsical predication of it hitting $60 in a few days or weeks, they would HAVE LOST A SHIT LOAD.
Put your predictions where your mouth is (that means price targets and time frames)
Yeah, if they bought at $49, then they also bought at $35, and at $30, and at $25, and at $20, and so on all the way down to $8 where I started harping it.
And no-one bought on my "whimsical predication" of $60, because that was a single comment made in EXASPERATION at the apparent complete and utter failure of my thesis that volatility would increase and that spot price would go to zero as the exchanges started to collapse. But you don't want to understand that, because you are an insecure little faggot.
In five years, no-one will give a fuck that the collapse happened in January 2012, or July 2012. Yes, NO-ONE WILL GIVE A FUCK. They either saw it coming and positioned themselves accordingly, becoming fabulously wealthy in the process, or they didn't, and lost EVERYTHING.
If you don't get it by now, you never will. Can't say I'm sorry. SOmetimes punk kids like you just need to get your hides tanned before you will learn. Too bad this lesson comes at the end of the lash, rather than a belt.
MAKE A FUCKING PREDICTION YOU CHICKEN SHIT PUSSY
I WANT TO SEE PRICE AND TIME FRAME.
IF NOT SHUT THE FUCK UP
...if not you're just guessing.
Umm Bob no one can time nor price the end of a system priced in gold or silver.
Trav calm down - you guys are fighting each other instead of the man. Corzine walks when intelligent focus on kicking each others asses instead of focusing on scumbags like him
focus people - the financial Armageddon is here and we need all hands on deck
You exhibit a pattern here. When backed to a wall, you demand others make exact predictions on your terms. The problem is that your terms are stupid.
6 months from now, the system will be worse off than it is today. That is the only prediction I need to make. You can avoid system failure by holding gold, and you can profit greatly from it by holding silver. That is the only action you need to take.
Your method leaves you wide open to a repeat of MF Global. Yet you continue to use it, knowing the risks. According to Einstein, you are insane.
BULLSHIT.
I made projections and WAS RIGHT. I was also called a dumb ass for being right.
You're nothing but an asshole that can't predict a thing.
You are psychotic...Are all the people in Japan dead? You predicted that.
Even if you were right on the price, it doesn't matter, because this post proves that your thesis was wrong.
Has a decade passed? That was the timeframe for that prediction on Japan.
I, unlike you, have a timeframe that goes longer than the lifespan of a cockroach.
CHEAP ASS COP OUT
....and yea I was right on price AND time.
That doesn't mean your thesis was right. You are just a dumb shit that got lucky, and nothing more.
Did you read Tyler's post? It proves that I am right, and that you are wrong. That's the way it is. Sorry :(
This certainly has been an interesting and heated exchange.
From the perspective of a non-trader, I want to say this: we have not achieved price discovery. In an environment where it is an accepted and stipulated fact that central banks intervene in markets that trade currencies, interest-bearing securities of the private and sovereign kind, some openly admit to intervening in stocks, and it is widely acknowledged that they intervene into precious metals markets, IT IS LUNACY FOR ANYONE TO ASSERT THAT WE HAVE ANYTHING THAT APPROACHES PRICE DISCOVERY IN THESE MARKETS.
I, for one, am supremely confident that price discovery is coming. I am also supremely confident that it will be preceded by martial law in the U.S. This bunch will not go without first doing everything in their power (inlcuding claiming more power still) to stay in power. Any careful observer can see this right now, taking place right in front of our eyes. it is undeniable.
Anyone who wants to start an argument about where "price" will be in six months is a moron, or worse, a professional troll with "online persona management software" running on his/her computer.
Bob,
Your first post, you were short gold.
Can you show me?
Show me my first post here OR SHUT THE FUCK UP.
Calm yourself. HINT: It is your first post, and an interesting thread. Geo, Turd, SWR, and I were all there. You called gold down when it was 1300. Check it yourself. And by the way, I have never seen you make a rising gold call, so I think of you as an anti-gold guy.
Great....I'd love to see it.
Please show me.
You haven't because it's BULLSHIT
Show us.
The other guy did, twice. You were short at $1300. How did that work out for you?
So the bold font says you mean fuckan business and CAPS for even more emphasis?
LMAO....relax Bob, and have another drink.
Fuck another drink, someone take his keys!
All of you keep talking past each other without listening to what the other has to say.
Most of ZH readers are macro-oriented and have a strong opinion on what lies ahead for us.
Bob is a mean-reversion piker who trades on market sentiment instead of macro views (which might take years to materialize).
It's possible to be long-term bullish on gold and still short it when it spikes against the 200 day moving average. Obviously he'll pay through the nose if he's caught on the wrong side if it goes parabolic or if paper collapses.
Bob, I realize ZH is a goldmine (pardon the pun) for traders but I honestly don't know what you're doing posting in the comments section. You're either a masochist or the definition of a 'troll'.
(Repeat for emphasis)
* Sigh * OK, but will you then STFU??
Clicking on your name gets to your page, which using the "track" tab shows your posting history. Going to the last page of this shows the oldest thread you posted on. Which is this one...
http://www.zerohedge.com/article/it-getting-ugly-quick-fiat-land-sp-now-...
And on this page, and I quote --
Now, please get back in your box, and stop being such an asshole to everyone.
Short gold just b.c it's over done short term.
That means it was a short term trade.
Haven't you always been short gold though?
Nono booboo
I own gold...I never said I didn't.
I WILL and HAVE shorted gold in the futures market when I feel it is overvalued.
Real convinient to have no conviction, isn't it?
Fuck the fundamentals. Let's trade. Surely we won't lose everything in one fell swoop, like any and all clients of MF Global.
Keep ignoring reality. You'll get exactly what you need.
I'm done tonight.
You're right...you're always right. You'll never be wrong.
Goodnight.
No, but fuu up there just bitch slapped you all over the place. Goodnight is right.
Just want to see how far this goes. And what happens if you put in log words like "antidisestablishmentarianism"
game.set.match saulysw.
Still a time-frame issue, Bob. But I'm willing to concede that I was expecting $60 by the end of the year.
Now, after the last few months, I'm seeing a repeating pattern in the ten-year chart, for whatever that's worth today. Seems a likely bet that it's going to drop a little more, maybe to 25, and then start another leg up from Jan. to Apr. Doesn't matter for me, and many others here, as the coins just sit in their boxes looking shiny until it's time to sell or use them, and I'm still accumulating.
Thought I'd extend an olive branch, as I do remember you making the call, and whether you, I or anyone else thinks that reality is correct, you did manage to hit it fairly closely. Kudos.
Thank you.
I appreciate that.
Doesn't matter for me, and many others here, as the coins just sit in their boxes looking shiny until it's time to sell or use them, and I'm still accumulating.
You really should get some out every now and then and clank them like a pirate. Arrrrrrrr! When it's time to convert them into something else, no one will care about a few scratches. Trust me.
You're a bad fucking liar Bob.
And like I said before, you still don't get it.
He hasn't the wherewithal.
Tough crowd tonight
If you take the idiots out of their paper positions the price drops only to the point where the physical buyers all over the world can actually get their hands on some. There corrected it for ya.
If you can get your hands on some, of course.
Silver still is reasonably easy, but I haven't seen a glint of physical gold in a shop (aside from jewelry, that is) for a long while now.
right about what? You said that HSBC was going to sue some private guy over who owns gold in a sequestered account at MF Global?
Jeezus, how the hell did you get all those calls so wrong if you're psychic? Oh wait, you never actually were right about anything
The more shocking news would be that there is no fraud in the precious metals market.
Note to Graham and McCain: Isn't a gold bug automatically an enemy combatant?
"You'll have to pass this bill to know what's in it!"
N-PHYS or T-PHY.U solves the segregated allocation, storage, and physical delivery issues - but not absconding from the Central Banksters!!
Amazing how noone worries about something bad happening on the weekends. Why does the S&P 500 go up every friday? My inclination is to be in cash.
Monetizing wealth extraction, while painting the tape?
No business,
the S&P always goes up every friday because Monday is almost always an up day. Plus, they have shorts programed to cover their shorts on Friday.
Have the stuff under YOUR control. It is only yours if you see it, feel it, smell it, taste it.
...and defend it.
... and make love to it. TMI?
It's ok as long as I don't have to listen to it afterwards.
One ring to rule them all, one ring to find them, one ring to bring them all and in the darkness bind them.
"Master carries a heavy burden."
This is why taking delivery is important. Once the obvious starts to dawn on people - that there are way more paper claims on gold than there is actual gold, this will start to become more common.
And thus the constant lesson about buying gold or silver or any other precious metal.. take. physical. delivery. period.
Celente was taking delivery. He was using the paper beat-down price to get physical on the cheap. If I was him, I'd start dealing with Tulving.
Guess he waited too long, huh?
If I remember right he bought December contract in April.
Regardless of when Gerald celente when he bought his gold futures ... You practice what you preach..
Gerald and his rants about the white shoe boys and how the whole world is going to be in a riot.. Talking about fucking up your own credibility. Would you take advice from a guy that just took it up the pooper dry but knew he was bending over in the shower of in the homo section .. dont cry rape
From what I could piece out of his immediate remarks, Celente was buying front-month contracts then holding until he could gain a cash settlement from bullion bank(s) in lieu of taking delivery. After a series of contracts/cash settlements he had accumulated funds equal to a 'free' contract, on which he would take delivery.
This pyramiding is common in markets: is similar to gaining frequent-flier miles by using a bonus-point credit card.
As far as I can tell, Celente lost his bonus contract. I don't know if he actually lost cash out of pocket.
Ditto mendacious sack of shit Ann Barnhardt who may or may not have had any open interest in any market but certainly took the opportunity to flap her gums, annoy people and be famous for fifteen-billionths of a second.
Bruce Krasting had an interesting tale of a trader who had a wire-transfer from MF Global reversed. It is hard to say whether this is an 'alligators in the sewer pipe' tale or not. The tale seems too 'tale-like' to be true.
All this will come out in bankruptcy court. My guess right now is all the customer funds will be 'recovered' by the trustee and the story will fade, indundated by more 'Eurozone failure' horror stories.
There are no conspiracies. Riiight.
Steve, HSBS just sued MF Global ove the murkiness of ownership of gold and silver. Now, how did the issue become murky? Oh yeah, that's simple, just happened in a vacum, right? And everybody in today's markets and goverment are trustworthy and pure as the driven snow. Just ask Jon Corzine how pure he is. He'll undoubtly tell you.
Ctrl Alt Celente
<golf clap>
Speaking of flapping gums, you still shorting gold?
This is the Tip of the Iceberg...and like Bob D you refuse to connect the dots. Sad.
bayofpigs said silver would be over $60 today (a projection from just 6 months ago) Trust him at your own behest.
His projections speak on his behalf.
Let's listen to the guy who denies the grim realities even as they stare him dead in the face.
Bob. I never said that. I said $50 by the end of the year and I stand by that. If I'm wrong, so be it. I did however, hit my $1750-1800 gold call made last Dec 31st.
You, on the other hand, are all over the fucking place.
You are a sick fuck.
You're gona' get what's coming to you. You sicken me.
What are you talking about? The fact that people question your views or hold you accountable?
Projection.
Would you take advice from a guy (Celente?)
Yes I would. His advice was solid as a rock. He never advised people into risky paper gold products. He repeatedly advised against. I'm just guessing here that his advice was for the little people like me, and he figured the big boys don't need advice that's why they are got rich already.
I agree. His advice always seemed logically sound to me.
But I would ask a different question: what kind of person (or organization) would screw with someone like Celente? It's not wise to piss off the press and, you know, steal their money. Is there an object lesson here, or as some have suggested, is the whole fractional reserve gold ponzi approaching imminent implosion due a lack of physical gold? I don't see how news of Celente's loss can be ignored by holders of GLD or SLV, or really any of the paper representations of material stuff.
Celente had it all wrong. If you love a woman's presence you want the real physical feeling not the paper virtual.Unless you're a true monk, not a live monk-e or an anti-i-monkey. If he really loves gold he should have been physical; not virtual. I know anal-agous reasoning can take us to the wrong watering hole as the word construct implies, but even so I'm tempted. On a matter of principle. Never liked clutching at virtual curves. PLease don't consider me a gold bug or a hypothecationary recycler, or an analagous woman lover. How's that for hypothetical self gratification, it sounds as frustrating as Celenteflagellation.
I think Celente was trying to jack the system (taking cash settlements and then trying to convert those to gold). I don't blame him for trying, but I'm not surprised they stole his money. I think there might be some reprecussions from this, but that's just my intuition, having grown up with folks like Celente, who tell it like it is and who, well, know people. OK, I'll admit it, I like the guy. He has character and is almost as eclectic as me! Out of curiosity, where do you live?, roughly speaking? I'm curious and I have a guess, but I want to see if I'm right.
Too many paper claims on too little physical gold: Hmm, nobody panicked that there were too few lifeboats until it was clear the Titanic was sinking.
I see 1 of 2 things happening here, according to the article.
Scenario 1.
If people decide to start taking delivery, spot gold runs up exponentially as panic buying insues by the parties that are deficient of the asset.
or
2. Like the article said, the entities (GLD, IAU, pool accounts, etc....) blow up, and doen't even bother to cover the deficiency of gold, and spot gold remains at current levels, while the holders of GLD (and the like) take the hit while the nation avoids the panic run up on gold.
I for one prefer the first scenario, but after reading this article, and watching this whole train wreck for over 5 years now, anything is possible including scenario 2.....The market and the federal government have this uncanny ability to shock the world and investors. When something looks so plainly obvious (like shorting Morgan Stanley at the end of 2008, right before the government banned short selling) watch out for the surprise move that rips your face off.
Scenario 2 will only delay the inevitable outcom; a run to physical. Even the shares have been hypotheticated. It's why they are so cheap and how they are continuously shorted.
I give you scenario 3.
GLD/Paper Gold represents "demand" for gold but not "supply." Paper gold holders are not gold bugs or gold interested, only 'investors' in the hot thing now- "gold." Pop the paper gold scenario, the holders of this product don't necessarily flow into physical, rather they wander to whatever hot new thing comes up. A lot of demand for gold disappears. I fear this scenario.
"hot new thing"
you got a list Prole, cuz it's getting lonely out here fo' a playa....
No, they won't. When they are flushed out, they will be left with nothing, just like MF Global clients. They won't be investing in anything other than the basic necessities of life for quite some time.
If you can't stand over it with an assault rifle and defend it, you don't own it. Simple as that.
Walk softly and carry an armored tank division, I always say.
I was going to say; walk softly behind an armoured tank but every bastard shoots at a tank.
That's because once us bastards shoots up some tanks, we hope to get an even trade. TANKS FOR THE MAMMARIES. <rimshot>
rehypothecation sounds like harry potter on a quiddich junk. Either you get the snitch or you are out in the cold. Watch out for bludggers and quaffles. as for regulators you better not count on them. They couldn't tell rehypoth from rehab.
Hey, I already used a LoR reference in this thread. Go find somewhere else to peddle Potter. :P
Ha ha. The gold disapparated.
Rehab's for quitters. These guys rehypothicate.
Should be part of a to be signed disclaimer for anyone not buying physical and taking and keeping possession.
It could be that the customers own what amount to parts of goods-delivery bars.
The same could (in theory) happen with other companies that vault allocated gold for you in quantities of less than one bar's worth.
With Bullionvault, for instance, you have lien on part of a bar.... things could get interesting if the company goes belly up and you try to cash out, even though the gold is i) allocated, and ii) in your name.
"The judge handling the bankruptcy said today he would deal
in January with issues about distributing physical goods, such
as gold and silver bars, after lawyers for some customers said
they couldn’t get their share of the payouts because bars can’t
be broken into pieces."
Sure, give them more time to unwind there position's on multi cover's.
"I simply do not know where the gold is."
I don’t think that this will go unresolved" and "I am hopeful that there will be effective recovery and reconciliation of these accounts."
At least with 'format C:' you get a chance to confirm.
Does anyone here believe that central banks won't print our way out of this mess? The alternative seems very dire.
I do. They won't print their way out of this because they know they can't, otherwise, they would have done so already. All of their printing to date has been meted out just enough to keep the system afloat while they buy up all the gold they can get.
There's no way out of this mess, but yes, they are going to keep it going and loot as much as possible before it collapses through printing.
all this turmoil
and yet my ounces are just as pretty as ever and my monster boxes show no sign of wear or tear. go figure.
With comments like that, you will soon be friended by the Federal Reserve.
http://www.cnbc.com/id/44701381/The_Fed_Wants_to_Be_Your_Facebook_Friend
"Green" is good!
I almost had a heart attack reading this headline, ZH could have eased into it a little bit.
Go long on home safes!
Of all the news stories they have tried to bury on late Friday afternoons, this one is the most important.
Gold, the other white meat...i
I think it was Jesus who used a bar of gold to feed unlimited people, no?
So if it's in the bible, it means they are doing God's work.
Blankfein was right afterall.
Actually Jesus "fractionalized" a few loaves of bread and a few fishes and fed a whole throng of his followers. The bankers stole the concept and here we are today.
People finally realising theres no gold?? How long is this going to last for?
PAGE coming online next June, whats going to happen to the price of Gold then?
Best stick to GLD and SLV as at least if gives you the feeling you own some hahaha. I meanwhile will continue stacking
Just because the Chinese built a weapon in the form of PAGE doesn't mean they are going to use it to blow up the COMEX just yet. China is one of the chief beneficiaries of kicking the can. They are buying gold like crazy to back their trade under the system to come. That's why they are coordinating their margin hikes with us. That's why most of the price appreciation has been during their session. The Fed and the ECB are holding the system together so our trading partners can acquire gold and trade under the system to come.
Blowing out the COMEX would be them shooting themselves in the foot. They are not going to do it.
I would also be surprised if this wacky ride continues through June. It feels toppy to me. I give it 3 months.
Gold is Gorges!
Kyle Bass mentioned in the AmeriCatalyst 2011 interview that Cayman took delivery of physical - almost a year ago (might even have been longer). That decision was made after Cayman had a look at the way papergold was administered.
It's somewhere in here - http://bit.ly/rzN3l6 - I can't be arsed watching the whole thing again just to find the right bit.
If you haven't watched it already, you should ... Bass is a VERY good presenter/interviewee and seems genuinely bright (if a lttle heavy on the spraytan and Just For Men).
You will have to get past the annoying fact that Bass continually apologises to professional parasites in the audience, simply because they're acquaintances of his: if someone you know is a stupid parasitic cunt who does fuckwitted things (like helping put together TARP or working for the IMF), you don't have to apologise when you point out their cuntiness.
LOL - nice.
Jump to ~41-45min in. Good meat n potatoes in there.
Most here are well acquainted with Mr. Bass. He's also the reason the University of Texas took delivery of $987 million in gold bullion earlier this year.
and 20 million nickels!
If that 'Texas' gold is in New York like I think it is, then who is it that really 'took delivery?'
The 'Texas' gold is waiting for the opportune moment, to disappear, like the MFG Gold.
But it doesn't really disappear, somebody takes it. Who is the ringmaster, who takes the precious?
"War nickels" (1942-45) to be precise, containing 35% silver.
No. Regular nickels. http://www.wallstreetoasis.com/blog/20-million-nickels
I thought fractional reserve was bad enough. What the hell is this rehypothecating assets nonsense ? I just learnt this word yesterday.
its a club sandwich that you share with the whole club and their wives; only it was sold to one then another until the whole club owns it. So the sharing was not the original deal but is the end result. Communism by another route is rehypothecation. Corzine, the born again rehypothecated communist; the road to GS leads you on anywhere and everywhere. That's why GS is the new global solution. Join now and become a rehypothecation addict.
You know what, usually your posts are very good but those constant remarks about communists or socialist are really ridiculous and maybe at some point you will realise that your model of capitalist life is shit and all those Buffets, Dimons, Corzines and Fulds were your idols at some point and when they went down, or will, suddenly they become commies. At least commies (they had different hobbies) have not accumulated all those billions stolen from pockets of the general populace.
I'm only kidding, this is a club sandwich for the american public; don't take my words literally. I'm no communist but early christianity was communal and about sharing, which is not communism as we understand it today, aka statist, totalitarian, "class" facade for blatant dictatorship.
falak pema,
" I'm no communist but early christianity was communal and about sharing,"
Hate to pop ur bubble, but it still is about that Today.
I don't get it : the USSR was NOT about sharing, in REALITY. Today North Korea is NOT about sharing. Am I missing something there? Modern communism was using "sharing" as a facade. Early christianity did what it said. Big difference.
You are correct. It is not sharing if it is taken by threat of force. That is called stealing.
Or taxes.
Oh potato tomato potato tomato.
http://www.youtube.com/watch?v=xNJTWGx4yQA
there is a marked deficit in ZH crowd both on logic and on humor. But nobody's perfect, me included.
I agree with your second sentence. You are forgiven. Now go in peace to sin no more.
the sandwich, is gone. this whole paper game, is a big fat empty pinata. none of the people on the ground, are going to get any candy.
Under communism funds never get to the pockets of the general populace to begin with!
And hang some day for your efforts!
Hypothecation getting a loan on some collateral and keeping the collateral. For example, buying a house, you get a loan with the house as collateral. And for MF Global the 'repo to maturity' that got them in trouble. Rehypothecation is still not clear to me, but I think it is using the same collateral over and over. Will someone please correct this?
function rehypothecation($collateral) {
rehypothecation($collateral);
}