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Interactive Brokers Warns Gold Margin Hike Imminent, CME Next?

Tyler Durden's picture


The first shot was just fired in today's battle with daily record gold prices. IB always tends to be a few minutes ahead of the CME. And following last week's 22% margin hike in gold, we are confident the CME will do everything in its power to pull a "silver" on gold. Are we about to experience a barrage of margin hikes in gold? Stay tuned and find out.

Interactive Brokers bulletin board


Fri Aug 19 13:29:35 2011 EST


As a result of the volatile trading environment at the present
time, please be advised that Exchange margins and House margins are
likely to increase over the next couple of days. For exchange-
specific increases, please visit the respective websites. IB will
also be increasing the gold derivatives margin. Please monitor any
affected holdings closely and manage your risk accordingly.

h/t London Dude Trader


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Fri, 08/19/2011 - 14:00 | 1578153 Dr. Acula
Dr. Acula's picture

Doesn't this increase the risk of a collapse?


Fri, 08/19/2011 - 13:59 | 1578154 SumSUN
SumSUN's picture

this is a dip worth buying.

Fri, 08/19/2011 - 14:04 | 1578178 Troll Magnet
Troll Magnet's picture

oh i've been waiting for this! will be waiting to click some "buy" buttons with my plastic money this weekend. thank you EE!

Fri, 08/19/2011 - 14:08 | 1578199 spiral_eyes
spiral_eyes's picture

margin hikes, margin shmikes, they can hike margins against "speculators" all they want, but every dollar benny prints is a margin hike against people who hold dollars. 

Fri, 08/19/2011 - 14:11 | 1578213 HoofHearted
HoofHearted's picture

Seems to me that the margin hikes just reek of having lost control. I smell desperation in the air. And it isn't from my buddies and me that have stacks of silver and gold. And thanks to CME for letting me add to the stacks at a lower price over the summer. I'm pretty much about as "in" as I can be, but I'll scrape together some green paper to BTFD if it comes along...

Fri, 08/19/2011 - 14:29 | 1578306 bankrupt JPM bu...
bankrupt JPM buy silver's picture

I told all my viewers to pull their accounts with IB

Fri, 08/19/2011 - 14:59 | 1578420 GetZeeGold
GetZeeGold's picture


We just had a rate hike last week. The gold market seems to flipping the middlefinger salute to the report.


Fri, 08/19/2011 - 15:08 | 1578453 JW n FL
JW n FL's picture
-139.86 (-1.27%) Real-time: 3:08PM EDT
Fri, 08/19/2011 - 16:26 | 1578761 IQ 145
IQ 145's picture

you can sell short the DEC contract for gold on the CME right now at the market. Put a fork in it; it;s done. Absurdly overbought; it'll be goin down some.

Fri, 08/19/2011 - 14:24 | 1578279 Two Towers AU AG
Two Towers AU AG's picture

Me too... Thanks you CME.. please raise the margins daily .. for nect 30 days.. :) :) :) ... I want to buy more Physical AU

Fri, 08/19/2011 - 15:25 | 1578502 tiger7905
tiger7905's picture

Interesting update from Don Coxe, says gold is telling us this financial crisis is very different and he's coined the term 'The Deficient Frontier' to describe this market.


Fri, 08/19/2011 - 14:04 | 1578179 trav7777
trav7777's picture

how so?

Margin hikes won't suppress the price for very long

Fri, 08/19/2011 - 14:09 | 1578207 Sudden Debt
Sudden Debt's picture

They wanna make sure as many chinese can buy gold on the cheap before it flies to the moon.

I don't know how many hikes silver already had but it always recovers and just gives us the option to add some more at a low price.

This economic crisis will haunt us for the next 10 to 15 years, whatever happens in 1 year doesn't matter.


Fri, 08/19/2011 - 14:29 | 1578309 gaoptimize
gaoptimize's picture

I think you underestimate the healing ability of an economy after a complete collapse.

Fri, 08/19/2011 - 14:39 | 1578349 faustian bargain
faustian bargain's picture

Possibly you overestimate the ability of our centrally planned economy to avoid complete collapse.

Fri, 08/19/2011 - 14:47 | 1578380 faustian bargain
faustian bargain's picture

Quite likely my brain misinterpreted some things...not sure I meant to say what I said. I haven't had coffee today.

Fri, 08/19/2011 - 14:51 | 1578394 Sudden Debt
Sudden Debt's picture

What happened?


Fri, 08/19/2011 - 15:00 | 1578426 faustian bargain
faustian bargain's picture

I misinterpreted the meaning of gaoptimize's 'underestimate' as 'overestimate'.

Fri, 08/19/2011 - 15:54 | 1578626 Sudden Debt
Sudden Debt's picture

I meanth about your logistic coffee problem.

Fri, 08/19/2011 - 16:01 | 1578648 faustian bargain
faustian bargain's picture

lol...had stomach illness yesterday, trying to avoid stirring things up today.

Fri, 08/19/2011 - 17:31 | 1579139's picture

You could try snorting it.

Fri, 08/19/2011 - 18:16 | 1579290 JW n FL
JW n FL's picture

we dont need to encourage Family to go to rehab the long way around, do we?

Sat, 09/24/2011 - 00:21 | 1704458 AldousHuxley
Fri, 08/19/2011 - 14:13 | 1578228 midtowng
midtowng's picture

They can hike margins to 100%. It won't stop the gold bull, only delay it.

Hiking margins has a decreasing effect. The higher the margins go, the less effect the hikes have.

Fri, 08/19/2011 - 14:27 | 1578293 Raymond_K_Hessel
Raymond_K_Hessel's picture

Oh how quickly we forget.  Don't get too cocky.  Take a look back at what happened to silver when they hiked margins in May.  Buy short-term puts on GLD.  Use the proceeds from the pull back to buy the dip that is coming.  Bulls make money, bears make money and hogs get slaughtered.

Fri, 08/19/2011 - 15:09 | 1578458 Calculated_Risk
Calculated_Risk's picture

silver is a much more volatile market than gold. you won't see a massive take down like that except in the paper market. premiums will just increase.

Sat, 08/20/2011 - 00:25 | 1580270 Chupacabra
Chupacabra's picture

Trying to snatch pennies with short-term GLD puts sounds a little hog-like to me, friend.  Just sayin'.

Fri, 08/19/2011 - 14:58 | 1578416 Man Bear Pig
Man Bear Pig's picture

yes. and margin hikes out of desperation add fuel to the fire. they have lost (the illusion of) control of the market and the market has figured it out.

Fri, 08/19/2011 - 18:02 | 1579247 disabledvet
disabledvet's picture

Actually i would argue the more you raise margin and fail to stem the price rise the more the market sees you as the weak hand. In other words its a price suppression strategy and nothing more. Once this insanity fails whose there to provide for an orderly market flow? If you say "obviously no one" then you will understand why institutions globally are fleeing to the safety of treasuries.

Sat, 08/20/2011 - 00:22 | 1580265 Chupacabra
Chupacabra's picture

Agreed.  These margin hikes will have increasingly less effect.  When the scramble for physical heats up and the run on the bullion banks starts, you can tinker with your margin requirements all you'd like.

Sat, 08/20/2011 - 18:06 | 1582137 HungrySeagull
HungrySeagull's picture

It might knock off a few young and inexperienced bulls but the big old bull with iron balls will crush you.


If being chased down by buffalo, don't bother mounting a horse. Both of you will be gored tired./

Fri, 08/19/2011 - 14:47 | 1578377 Azannoth
Azannoth's picture

You know what I like this suppression, the last thing we want to see is a Christmas tree chart of gold(like in 1980), it's good that they are dampening the rise, which also gives us more time to accumulate

We're on the same side here me thinks, they are making the metal cheaper for us to buy

Fri, 08/19/2011 - 17:02 | 1578983 Smiddywesson
Smiddywesson's picture

Trav's right.  They double tapped gold with two margin hikes last time and the gold market reacted to it like a charging rino to a BB gun.  It felt it, but it came right back at a full dead on run.

That problem with using up your margin hikes is they get used up.  Then what?

Sat, 08/20/2011 - 00:23 | 1580266 Chupacabra
Chupacabra's picture


Fri, 08/19/2011 - 14:06 | 1578180 centerline
centerline's picture

I have been holding for a decent dip.  The moves have seemed to be too parabolic, too quick.  Of course, at this time I look like a complete idiot.  But, it wouldn't be the first time (or the last).  Oh well is all I can say if I have to pony up a little more fiat here soon.


edit:  Had to go back just to complete a sentence.  Man, my posts are pitiful sometimes.

Fri, 08/19/2011 - 14:11 | 1578217 scratch_and_sniff
scratch_and_sniff's picture

you'll get your pullback... if it continues like this, im going to start worrying for real. This move has been brewing for a decade, its quite the parabola, here's the no 1 chart of the decade;

Fri, 08/19/2011 - 17:05 | 1579000 Smiddywesson
Smiddywesson's picture

Stocks rose 27x between Oct 1922 and Oct 1923 in Weimar Germany.

The gold markets laugh at your parabolas.  Rules of thumb for parabolas don't apply to these types of situations.  Anyone who sells is in for the regret of their lives.

Sat, 08/20/2011 - 08:17 | 1580680 scratch_and_sniff
scratch_and_sniff's picture

They arent "my parabola's", they belong to the abstract, and the gold market does not laugh. I, on the other hand, with have a fit laughing at you when the penny drops, ye big halfwit.

Fri, 08/19/2011 - 14:20 | 1578257 Scisco
Scisco's picture

I missed a GLD call by a nickel last week. Looks like I am going to get another stab at it.

Fri, 08/19/2011 - 14:19 | 1578253 Id fight Gandhi
Id fight Gandhi's picture

Probably worth buying some near the money gld puts. Buy some dips in physical.

Fri, 08/19/2011 - 14:38 | 1578341 Silver Bug
Silver Bug's picture

This to be expected, Silver and Gold are going to take turns on who is outperforming, and who is getting the hammer of God slammed down on them. Gold will get machine gunned with margin hikes. Just a good buying opurtunity. Overweight Silver at the moment, as Gold cools off, then I will simply switch back.

Fri, 08/19/2011 - 17:07 | 1579018 Smiddywesson
Smiddywesson's picture

I would have agreed a few weeks ago, but central banks are not buying gold.  Their buying provides the resiliency in gold.  Their last two margin hikes, used in tandem, were an abject failure.

How many hikes will it take this time to drive gold down a lousy 1.5% over two days?  Three or four?

Fri, 08/19/2011 - 18:02 | 1579250 BayAreaAlan
BayAreaAlan's picture

"central banks are not buying gold." Source please? I don't assert you are wrong, but how do you know you are right?

Fri, 08/19/2011 - 14:56 | 1578412 faustian bargain
faustian bargain's picture

can someone post a link to where I might follow CME margin updates? I've looked on the cme group website but I'm apparently not smart enough to find it.

Fri, 08/19/2011 - 15:31 | 1578528 fiddler_on_the_roof
fiddler_on_the_roof's picture

To scare weak holders of Gold - before it was "IMF gonna sell Gold", now it is "CME margin hike", next what is it going to be - "Uncle sam is going to confiscate your Gold" ?

Fri, 08/19/2011 - 16:42 | 1578896 max2205
max2205's picture

The 20 year t bond is up 40% in 6 months but no margin hike. Hummm

Fri, 08/19/2011 - 20:07 | 1579635 SWRichmond
SWRichmond's picture

Remember...this is a deleveraging, and gold is money.  This is more evidence of leverage being squeezed out of the system.  Gold is slowly (lately, rather quickly it seems) reverting to a cash market, which coincides nicely with the prefence of physical gold over paper gold.  Demand for gold continues to rise, and the purchasing power of gold continues to rise; this is exactly how money should behave in a deleveraging.

Think of the vaults at COMEX etc. as a bank.  There is a run on the bank.  The bank is trying to make it more attractive to leave the gold in the bank.  This also makes perfect sense; bank runs are common during deleveragings.  When the bank runs out of money, because it has promised / lent out too much via fractional reserve lending, people will rush the banks and hang the bankers from lampposts.

Are there still any lampposts on Wall Street?

Fri, 08/19/2011 - 20:09 | 1579641 SWRichmond
SWRichmond's picture


Fri, 08/19/2011 - 14:00 | 1578156 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Can JP Morgan actually afford the margin payments? Or don't you have to pay margin on naked shorts?

Might asked Blythe...

Fri, 08/19/2011 - 14:03 | 1578175 rich_maverick
rich_maverick's picture

JPM and the other Prime Brokers live by a different set of rules.  As for margin on naked shorts, yes... you have to pay.  But, given that JPM does not really pay (it's all the FED), these rules are not impacting there positions.  It only impacts all their counterparties.

Fri, 08/19/2011 - 14:05 | 1578184 Gordon Freeman
Gordon Freeman's picture

Your margin's no good here, Ms. Masters--we'll show you to your table now...

Fri, 08/19/2011 - 14:12 | 1578222 HoofHearted
HoofHearted's picture

+$42.37 per ounce

Fri, 08/19/2011 - 14:30 | 1578313 Bullionaire
Bullionaire's picture

JPM:SILVER now negative for 17 days.


Suck on THAT, Blythe.



Fri, 08/19/2011 - 14:11 | 1578215 Sudden Debt
Sudden Debt's picture

They sell the paper and pass the cost down.

I wouldn't be surprised if they actually made a gain of every margin increase.


Fri, 08/19/2011 - 14:59 | 1578421 Texas Ginslinger
Texas Ginslinger's picture

A comment at Blythe's blog;

Ex-Dissident said... Blythe, ignore these jealous morons. You are the essence of class and wit, all mixed together in one spectacular woman. You are both admired and loved.

Jamie D. must be the only one making comments there.


Fri, 08/19/2011 - 17:10 | 1579032 Smiddywesson
Smiddywesson's picture


Fri, 08/19/2011 - 14:01 | 1578160 troublesum
troublesum's picture

Still trying to understand the implications of Margin Hikes? Can someone explain?

Fri, 08/19/2011 - 14:04 | 1578177 kalasend
kalasend's picture

Look back at silver price in May for the effect of margin hikes.

Fri, 08/19/2011 - 15:53 | 1578621 Bicycle Repairman
Bicycle Repairman's picture

Gold isn't as volatile.

Fri, 08/19/2011 - 14:12 | 1578220 Scisco
Scisco's picture

Holding a futures contract in the underling commodity suddenly requires more funds. If you can't get the funds a liquidation is forced.

Fri, 08/19/2011 - 14:18 | 1578247 cossack55
cossack55's picture

Fuck a Futures, Kiss a Phys.

Fri, 08/19/2011 - 14:26 | 1578290 troublesum
troublesum's picture

Thank you

Fri, 08/19/2011 - 20:28 | 1579680 AustriAnnie
AustriAnnie's picture

Here it was!


And an interesting perspective on the unintended consequences of such hikes:


Fri, 08/19/2011 - 14:02 | 1578163 redpill
redpill's picture

How come they only hike margins when gold goes UP?

Fri, 08/19/2011 - 14:25 | 1578289 EscapeKey
EscapeKey's picture

For the same reason they never hike margins on E-Mini's regardless of volatility.

Fri, 08/19/2011 - 16:30 | 1578764 Sudden Debt
Sudden Debt's picture

How come woman get a migraine whenever a guy feels horny as hell?

Questions we'll never be able to answer with logic.


Fri, 08/19/2011 - 14:02 | 1578164 centerline
centerline's picture

Please.  Hammer the crap out of gold.  I need a better entry price.

Fri, 08/19/2011 - 14:20 | 1578260 cossack55
cossack55's picture

So it is hammering gold that creates gold derivitives?  I thought it only produced flat gold.  Hmmmmm.........!

Fri, 08/19/2011 - 14:02 | 1578167 Gordon Freeman
Gordon Freeman's picture

Who gives a shit?  A margin hike is not going to stop privateers from trading gold futures.  A hike might trigger an algo dump, and open up an entry point.

CME:  Go ahead--make my day

Fri, 08/19/2011 - 14:27 | 1578295 EscapeKey
EscapeKey's picture

Another margin hike will TOTALLY stop Chavez from repatriating Venezuela's gold.

Sat, 08/20/2011 - 00:37 | 1580285 StychoKiller
StychoKiller's picture

I'm thinkin' you left off the </sarc> tag here.

Fri, 08/19/2011 - 17:12 | 1579044 Smiddywesson
Smiddywesson's picture

Margin hikes get progressively baked in the price.  They are reaching diminishing returns and are trying to keep their powder dry.  They will fail.

Fri, 08/19/2011 - 18:16 | 1579285 LongBalls
LongBalls's picture

They are failing Smiddy....they are failing. Up yours debt slave masters. Freedom is my gift from GOD!!!

Fri, 08/19/2011 - 14:02 | 1578168 uno
uno's picture

options expiration next week for gold silver, probably just a coincidence

Fri, 08/19/2011 - 14:07 | 1578191 Gringo Viejo
Gringo Viejo's picture

4 snaps uno ++++...winnah, winnah, chicken dinnah!

Fri, 08/19/2011 - 14:10 | 1578212 MsCreant
MsCreant's picture


Fri, 08/19/2011 - 16:04 | 1578667 DosZap
DosZap's picture


< probably just a coincidence>

Two words....................

My Arse!!..........................

PLEASE UP THEM!!, Waiting to make a huge scoop.(along w/50 million more)

I will never get it, why they DO NOT get it.

This just makes their problems WORSE.

Fri, 08/19/2011 - 14:03 | 1578171 Sudden Debt
Sudden Debt's picture

Let's hope they increase the Silver margins also if there's anymore room left to make a difference physical and paper.

I still want my cheap silver in october.


Fri, 08/19/2011 - 14:21 | 1578266 cossack55
cossack55's picture

If its still under $100/oz in Oct., it will be cheap.

Fri, 08/19/2011 - 14:03 | 1578172 markar
markar's picture

Bring it on. The sooner they flush out the weak hands the sooner real price discovery can happen.

Fri, 08/19/2011 - 14:03 | 1578173 Bastiat
Bastiat's picture

I understand that Chavez raised his margin requirement to 100% recently . . .

Fri, 08/19/2011 - 14:12 | 1578223 Scisco
Scisco's picture


Fri, 08/19/2011 - 14:21 | 1578174 Dr. Engali
Dr. Engali's picture

I hope they hammer the shit out of gold. I have been patiently waiting for a pull back to add to my positions. My patience is growing thin though.

Fri, 08/19/2011 - 14:04 | 1578182 Gringo Viejo
Gringo Viejo's picture

As stated so often on ZH....go to full cash contracts and be done with the comex charade.

Fri, 08/19/2011 - 14:04 | 1578183 Seasmoke
Seasmoke's picture

thats not going to help, this time is different

Fri, 08/19/2011 - 14:05 | 1578185 Fortunes Favor
Fortunes Favor's picture

Comic Relief For Market Mayhem

Gold prices hit a new high of $1,877.88 this morning and all I hear on CNBC are the top callers and naysayers

Fri, 08/19/2011 - 14:10 | 1578211 Gringo Viejo
Gringo Viejo's picture

Yes Sir! The EOTWAWKI and these weasels go on as if it's business as usual.

Fri, 08/19/2011 - 14:46 | 1578369 Blagio
Blagio's picture

CNBS has been calling a top since $1000.  The talking heads aren't required to have ECON 101 qualifications when applying for the position. They are just told to pump away.

Fri, 08/19/2011 - 17:17 | 1579071 Smiddywesson
Smiddywesson's picture

I don't have ECON 101 either, that's why my ECON works and I have PMs.


All my Econ. is based on subterfuge and conspiracy.  In a rational market, conspiracy and illegality is the only way to make money.  That's why the markets will never be rational. 

Fri, 08/19/2011 - 14:05 | 1578186 Bastiat
Bastiat's picture

CME options expiry next week  LOL!  Can't have the bastards actually losing money on an OPEX!  Some things are theirs by right, dammit!

Fri, 08/19/2011 - 16:03 | 1578658 Strider52
Strider52's picture

Prolly a good time to short GLD & SLV. But, I don't do no steenkin paper!

Fri, 08/19/2011 - 14:06 | 1578188 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Perfect storm created by margin hikes before Bernanke loans Fed gold to China at $1850?  Bring the price down, bitchez!  I need more!

Then again, and I will keep writing this, the higher the margin, the more investors will turn to physical, which will squeeze the market more than paper demand ever will.

You call this a storm!

Fri, 08/19/2011 - 14:23 | 1578274 cossack55
cossack55's picture

Right again, Mr. H.

Sat, 08/20/2011 - 00:27 | 1580273 Boxed Merlot
Boxed Merlot's picture

You call this a storm!...


But Lt Dan, you ain't got no legs.

Fri, 08/19/2011 - 14:07 | 1578196 Gunther
Gunther's picture

Oh horror, that is going to reduce liquidity!

/irony off

Fri, 08/19/2011 - 14:08 | 1578200 tmosley
tmosley's picture

Yup, here come 5 or more margin hikes.  Be ready to BTFD.

Fri, 08/19/2011 - 14:09 | 1578203 SheepDog-One
SheepDog-One's picture

Ive got a hunch margin hikes are now on faster diminishing returns just like everything else. Just dont buy gold on margin and it has no effect at all.

Fri, 08/19/2011 - 14:09 | 1578205 AldoHux_IV
AldoHux_IV's picture

Hopefully someday soon these margin hikes are like any other central planning attempt at manipulating the markets and have a half life of 1-2hrs in effect.

Fri, 08/19/2011 - 14:13 | 1578225 MsCreant
MsCreant's picture

Jezuz, it will have me glued to the screen all day long looking for my entry point. Auuugh!

Fri, 08/19/2011 - 14:52 | 1578398 SheepDog-One
SheepDog-One's picture

I bet locating your entry point is not as difficult as youre trying to make it seem.

Fri, 08/19/2011 - 16:14 | 1578712 faustian bargain
faustian bargain's picture


Sun, 08/21/2011 - 01:47 | 1582986 saulysw
saulysw's picture

Hahaha. You naughty dog, you.

Fri, 08/19/2011 - 17:20 | 1579083 Smiddywesson
Smiddywesson's picture

I went to the Discovery Channel for two day during the last margin hike.  It was quite soothing.  When I got back, problem solved.

Fri, 08/19/2011 - 14:10 | 1578209 speconomist
speconomist's picture

Just gold? And silver?

Fri, 08/19/2011 - 14:11 | 1578219 Troll Magnet
Troll Magnet's picture

a month ago i was waiting for the EE to hammer the price down to 1500. after finally letting it go and buying some physical PMs at 1660, now i am waiting for the price to come back down to the 1700s level. shit, i should just buy regardless but the temptation to time the market is so hard to resist.

Fri, 08/19/2011 - 14:14 | 1578232 MsCreant
MsCreant's picture

I'm feeling all that.

Fri, 08/19/2011 - 14:22 | 1578269 tmosley
tmosley's picture

The dollar cost average method is probably the most effective way to invest in this environment.  You won't get in at the bottom, nor will you get in at the top, but you will build a nice big buffer ove the course of the continuing bull market.

Despite all the clamorings of the trolls about how I encourage people to buy at the top (blatent lies, I encourage people to dollar cost average), my dollar cost average is below $17 for silver.  It would really have to take a dive for me to lose any fiatscos.  Even if it did, I have so much faith in my research, even if it went to $1 and no-one else wanted the stuff ANYWHERE, I would buy all that I could get my hands on.

Fri, 08/19/2011 - 14:25 | 1578287 cossack55
cossack55's picture

Too right, Mr. M.  At $1/oz. I would have to sell everything not bolted down to buy more of the pretty shiny stuff.

Fri, 08/19/2011 - 17:22 | 1579099 Smiddywesson
Smiddywesson's picture

I might not sell everything, but I would rent my wife.

Sat, 08/20/2011 - 18:03 | 1582132 HungrySeagull
HungrySeagull's picture


By the time you finish entering all that payment crap and hit the enter button, the Dragon Trap is going to have you buying whatever number you put in at 100.00


All the drama of a Ebay sniping action within the last 20 seconds. The strongest computer and fastest internet wins.

Sat, 08/20/2011 - 00:22 | 1580264 Boxed Merlot
Boxed Merlot's picture

even if it went to $1 and no-one else wanted the stuff ANYWHERE, I would buy all that I could get my hands on...


Looking to be the JPM of the 21st century?  Or just another CB with a traditional bent?  It ain't money ya know, (just the next best thing)

Fri, 08/19/2011 - 14:12 | 1578224 LookingWithAmazement
LookingWithAmazement's picture

How about the "Chavez-effect"? Gold has not skyrocketed since.

Fri, 08/19/2011 - 14:15 | 1578236 Bastiat
Bastiat's picture

Last night wasn't a bad start, I'd say.

Fri, 08/19/2011 - 14:23 | 1578276 tmosley
tmosley's picture

Might want to refresh Kitco there, buddy.

And realize that delivery won't occur instantly.

Fri, 08/19/2011 - 14:27 | 1578296 cossack55
cossack55's picture

Which begs the question: How will delivery happen?  Boats sink, planes crash, trains derail, stagecoaches are rob..............gotta go. Back soon.

Fri, 08/19/2011 - 15:04 | 1578439 Idiot Savant
Idiot Savant's picture

Who cares how delivery happens, the correct question is WHEN will delivery happen. I believe one of the documents posted yesterday states that delivery is to occur within two months. I can't wait to see how this deal plays out.

Fri, 08/19/2011 - 17:23 | 1579106 Smiddywesson
Smiddywesson's picture

Anybody want to bet that Chavez' gold boat never sets sail, or meets with an accident on the way?

Fri, 08/19/2011 - 19:03 | 1579414 Raymond Reason
Raymond Reason's picture

They'll do to Chavez what they did to Gadaffi and Saddam, freeze his assets. 

Sat, 08/20/2011 - 00:51 | 1580297 StychoKiller
StychoKiller's picture

How would the rest of the World react to that?  (Hint:  It's all a lose-lose situation for London, no matter how they try to wriggle off the hook!)

Fri, 08/19/2011 - 14:54 | 1578404 LookingWithAmazement
LookingWithAmazement's picture

But even the announcement of Chavez recalling gold might have added fuel. Even stranger is that gold is lowering now while stocks are too!

Fri, 08/19/2011 - 14:15 | 1578226 Vagabond
Vagabond's picture

Why aren't margins done on a percentage basis?  This method of altering margins with price and volatility changes is not the most sensical approach.

Sat, 08/20/2011 - 00:52 | 1580302 StychoKiller
StychoKiller's picture

To paraphrase:  "Markets with sense is like a fish with a bicycle!"

Fri, 08/19/2011 - 14:16 | 1578230 THE DORK OF CORK
THE DORK OF CORK's picture

Let them do their worst - this Dork is ready to step in with a fistful of euros in exchange for another few ounces.


Fri, 08/19/2011 - 14:14 | 1578231 Bastiat
Bastiat's picture

The Silver Bears are humping Blythe's leg going into next week's OPEX too.

Fri, 08/19/2011 - 14:15 | 1578234 digalert
digalert's picture

My double barrel spring loaded gold trap is set...

go ahead CME, I'll wait.

Maybe I'll snatch some silver eagles while I'm at it.

Fri, 08/19/2011 - 14:15 | 1578237 americanspirit
americanspirit's picture

Margin hikes on PMs at this point are like trying to push back the river. Fruitless, pointless and stupid. But I guess they gotta do what they gotta do. Pretty funny, really. It's almost as amusing as it would be watching a guillotine party featuring the aristocrats (you know who you are, and we know where you are). Do you think the heads keep on thinking as they roll into the basket? You know, something like "this can't be happening to meeeeeee."

Fri, 08/19/2011 - 14:28 | 1578304 cossack55
cossack55's picture

"this can't be happening to CMeeeeeeeee."

Fixed it for ya.

Fri, 08/19/2011 - 14:16 | 1578239 JW n FL
JW n FL's picture

They (CME) can NOT Hike China's Renmibi for Gold market!!


In this edition of On the Edge, Max Keiser interviews Ned Naylor-Leyland from Cheviot Asset Management.

He talks about the new pan Asian gold exchange and what it means for global currency and commodities markets.

Fri, 08/19/2011 - 15:38 | 1578310 JW n FL
JW n FL's picture


NEW YORK — Electronic-stock-market operator Direct Edge announced Monday it has opened up access to seven private trading facilities, letting traders route orders directly to some of the largest U.S. "dark pool" venues. Direct Edge, which runs two U.S. stock exchanges, has forged pathways to alternative-trading systems run by Barclays, Goldman Sachs and Credit Suisse, as well as trading firms Knight Capital Group and Getco.


The CME can NOT move the price of Gold but for a few hours or maybe a few days? perfect storm? a few weeks?

WAKE UP!! China is ahead of America in Quality.. if you believe that the Renminbi with its 1,200% leverage v. the United States Dollar's 120% Leverage.. (the lverage numbers are a little lite)

disclosure I own Dollars and Gold, I would not own Renminbi if someone gave it to me.

Fri, 08/19/2011 - 14:18 | 1578246 10044
10044's picture

These MIs are getting less effective EVERYTIME, e.g. Last week's. Was it 22% ? How long did it last, a day??!

Fri, 08/19/2011 - 14:19 | 1578251 FoieGras
FoieGras's picture

Remember margin hikes work both ways. In futures markets there's a short position for every long. Shorts are affected by the margin requirements just like longs.

If there are enough deeply leveraged shorts in the futures this could set off a squeeze to much higher prices.

It can work both ways.

Fri, 08/19/2011 - 14:24 | 1578283 redpill
redpill's picture

After this week I don't see how there could be any leveraged shorts left.

Fri, 08/19/2011 - 14:30 | 1578311 cossack55
cossack55's picture

However, I can imagine many "full" shorts.

Fri, 08/19/2011 - 15:36 | 1578551 EscapeKey
EscapeKey's picture

Shorts = (exempt) commercial banks.

Fri, 08/19/2011 - 14:24 | 1578278 Stormtower
Stormtower's picture

Can anybody tell me why the Euro is getting stronger against the USD, I would have thought with all the shit going down that we would benefit.

Fri, 08/19/2011 - 14:30 | 1578312 Two Towers AU AG
Two Towers AU AG's picture

QE3 is being launched next week... :) :)

Fri, 08/19/2011 - 14:25 | 1578286 Implicit simplicit
Implicit simplicit's picture

Etrade raised its vxx margin requirements to 70%. Dirty pool. They must need to force some selling and/or prevent withdrawals to boost their own reserves. Not right. I called another company and they said the least margin requirement for vxx was 30 and the highes 40 if it was a large % odf your portfolio.

Fri, 08/19/2011 - 14:27 | 1578300 tocointhephrase
tocointhephrase's picture


Fri, 08/19/2011 - 14:30 | 1578314 cossack55
cossack55's picture

Promises, promises.

Fri, 08/19/2011 - 14:34 | 1578316 Quinvarius
Quinvarius's picture

some day they will figure out that pulling credit out commodities pulls liquidity out of the entire system. cme has to take responsibility for pushing the stock market off the cliff

Fri, 08/19/2011 - 14:33 | 1578319 Badabing
Badabing's picture

Steady now, remember the puke indicator. Only the big banks know when the bottom of the next hammering will be.

When you hear the news that GLD just gave up X amount of tons you know the bottom is in. hopefully you can call your coin dealer and lock in at the opportune moment.

Fri, 08/19/2011 - 14:33 | 1578322 Bastiat
Bastiat's picture

Like a trying to wave off an F5 tornado with semafore flags.

Fri, 08/19/2011 - 14:37 | 1578338 DonutBoy
DonutBoy's picture

+1.  It'll get runover faster than a BOJ currency intervention.

Sat, 08/20/2011 - 18:00 | 1582127 HungrySeagull
HungrySeagull's picture

Gather up the trailers and park them a few miles over yonder and watch.


Fri, 08/19/2011 - 19:57 | 1579598 WmMcK
WmMcK's picture

Signal "B-a-n-a-n-a M-a-n" and take off.

Fri, 08/19/2011 - 14:35 | 1578326 I Told YOU So
I Told YOU So's picture

the gld chart is WAY too extreme, just in case the paper market (gld) drives the physical down (tenporarely) it might be prudent to hedge with gld dec puts say 125-150? 

Fri, 08/19/2011 - 14:39 | 1578348 Badabing
Badabing's picture

Thats not what i'm talking about. I TOLD YOU SO

Look for the GLD holdings to be reduced not the ETF price!

Fri, 08/19/2011 - 14:45 | 1578373 I Told YOU So
I Told YOU So's picture

I see what you mean but the charts paint a picture of what has already happened and the GLD chart is way  overextended, my point is that to hedge the retracement that is coming one can buy very cheap OTM dec puts, sort of like insurance. nothing wrong with that, even for those holding only the physical and not a combination of physical/futures.

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