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fed...nice puke on bonds today..10 yr at 4.17%. Greenie can't keep up...the printing presses have smoke pouring off the machines. LOL!
Dan, did you see this article? I agree only if HUI loses 125...unlikely IMO.
http://www.321gold.com/editorials/maund/maund071603a.html
Dan, Nice breakdown of HUI components here.
http://www.amex.com/?href=/othProd/prodInf/OpPiIndComp.jsp?Product_Symbol=HUI
Another bullish COT report for gold. Commericals closing out the shorts. http://www.cftc.gov/dea/futures/deacmxsf.htm
Dan, FCX is ripping today...usually a good point stock for the miners. The rest may follow on Monday or Tuesday.
Nice article! Thanks.
Zeev,
I know you don't like yellow but one comment. Fiat monetary systems have always failed. Germany failed, the pound failed and the dollar will eventually fail. Yellow keeps the system honest. No more 24/7 printing presses.
George...Yep. Every time we hit 4.00% there is a beat down. The fund managers are selling and the government is buying. Mtgs are already screaming up. I just finished my closing today 20yr @ 4.875% 0 points. Yeah I'm tooting my horn a little. LOL! The yield was at 3.08 exactly when I locked it and we got as low as 3.07.
BCGI getting hurt real bad. 14.50
USD broke above the downtrend line hence the gold weakness.
Headfake? If the 10yr pops over 4%, it will be an exodus.
MH.."i find it chilling the fed gov
and bush are doing nothing to help calif"...Why should they? If they didn't have such a bunch of idiots running that state, they wouldn't be in this situation. Example...Anytime you cap the price of electricity, you are asking for trouble. Who pays for that oil spike in the end that is needed to produce electricity (Thanks Grey)? CA residences do.....vote the jerkoff out and send him to Iraq. He couldn't do any more harm there than he did in California. The people of CA voted him in...it's their problem not mine. I don't want to pay for it...we have enough problems in my state as it is.
***Gold and Silver short positions***
http://www.financialsense.com/metals/shorts.htm
"Nasdaq is smoking"...smoking crack. Wait until it wears off. Brrrrr!
Anyone notice that gold is barely moving even on a big USD and indice move? Tick Tick Tick......BOOOOOOOMMMM!!! Just a matter of time until gold erupts IMO.
Agreed...100%.
Agreed on US yields. those are my targets also. Well see how many hands fold when we get there. The "event" is always a longshot but I think the JGB's as the "event" have a very high probability of occurring. Thanks for your insight George...I enjoy reading your posts.
George, those JGB's have HUGE implications if they cave in both to Japan and our bond markets as well since Japan owns a ton of UST's. A collapse will bankrupt many a bank and other companies in it's wake. That is a negative for the Nikkei. Also, they will liquidate their UST's to shore up their countries problems which, in turn, will ignite our bond bubble in the process. I have been harping on this being the "event" that will murder world markets and rocket gold for 2 years now on the DrBob board...just a question of when. Scary stuff.
mlsoft..Ditto. I am in 100% agreement with you on Japan. A cave in of the JGB's is HUGE trouble for Japan and us. They will liquidate their UST's in a flash to shore up their own countries trouble and ignite our bond bubble.
NEW YORK -- The dramatic selling of Japanese government bonds is again spilling over into other global sovereign debt markets Thursday, triggering more speculation on whether the great global bull run in bonds might have come to a resounding halt.
The slump in the Japanese bond market, the world's largest, has been deep and striking, with the benchmark 10-year bond seeing its largest one-day selloff Thursday since late 1998. The yield, which moves inversely to price, jumped 22 basis points in one day to 1.12%, the highest level since October and nearly tripling the record low of 0.43% seen as recently as June 11.
The particular catalyst Thursday appeared to be a poorly received Y1.494 trillion 10-year JGB auction, on the heels of a similarly received 20-year JGB auction last month.
But, the steady and persistent selling in Japan is fueling the sale of other government debt around the world, both for psychological and practical reasons. Not only are Japanese investors, who have been active buyers of foreign debt, beginning to sell their holdings to move to higher-yielding assets such as equities, but the surge in JGB yields is changing the arbitrage dynamics in global bonds, forcing leveraged investors like hedge funds to sell.
"I think we are at a major threshold in bond markets right now," said Brian Edmonds, global head of U.S. Treasury trading at Banc of America Securities in New York.
Even though the U.S. Treasury market still benefits from demand from some domestic investors, notably mortgage-backed securities holders and issuers, the market is getting hammered by foreign selling, Edmonds said.
If there's a theme rippling across global debt markets, it appears to be that a spate of interest rate cuts and other forms of stimulus will start to lift global growth during the second half of the year. The stumble in the bond markets -- and in particular a drop in interest in new auctions not only in Japan, but in Germany and the U.K. -- also underscores the fact that many investors have reached saturation point with their bond holdings and are beginning to contemplate switching into equity markets.
The fact that Japanese investors are selling some overseas holdings is feeding a vicious global bond market cycle. This shift is evident in the latest statistics from Japan's Ministry of Finance, that show domestic investors sold a total of $9.9 billion of foreign bonds in the week ended June 27, compared with a smaller net sale of $3.6 billion in the prior week and a complete turnabout from the week of June 13, when they were net buyers of about $9.4 billion foreign bonds.
Ciaran O'Hagan, global bond strategist at Lehman Brothers in London, called the change of strategy "stunning" and said heavy selling continued this week.
George, remember I was talking about those JGB's awhile back..."Japanese government bonds were rocked for 22 basis points, leaving yields at 1.13%. Recall that barely three weeks ago, the yields were about 45 basis points." from Fleck. Those things will kill any recovery attempts in the Nikkei. That's why I am very negative on Japan LT.
leptokurtosiss..."where monkeys could beat fund managers."...I thought they were the monkeys. ROFL!!
George, A little validation to the HUI 200+ call of yours. http://stockcharts.com/def/servlet/SC.web?c=$hui,uu[w,a]daclyiay[pb50!d20,2!f][vc60][iLi14,3!Lh14,3]...
Ain't that a pretty sight! Conventional methods show a 202 projected target but they always over shoot on a strong rally.
Agreed. How about that miner action today?
I think Japan is closer to disaster than recovery due to the JGB bubble. That will squash any recovery attempts IMO>
COT report very interesting for gold. Very bullish. Specs down to 65K long...commericals closing shorts and adding longs.
http://www.cftc.gov/dea/futures/deacmxsf.htm
mlsoft...WHT/WS the strike is 1.65CAD (1.23 USD) with 5/30/07 expiration. At roughly .50 versus the common 1.25, your .50 is all time premium. Should you hold them until maturity you need 1.73 on the common to break even since they will erode in a flat market over time. Will gold stay flat for 4 years? ROFL!! I don't think so...there will be some "event" that will take place by then to set things into motion. Real Estate maybe? USD? Bond bubble popping? Too many potential catalysts to list.
Dan,
Prechter's bearish scenario will be wrong IMO. A decline here to reset from overbought could be good. A lot of miners are overbought on the dailies and will need strength to clear the triple resistance now on HUI. It will just make the explosion that much more powerful when it happens. Holding a boatload of WHT/WS now...sold WHT in lieu of the warrants. For .50 time premium for a quality miner like that, it made no sense for me to hold the common because the move past 408 will occur sooner than later. One note...I plan to get the hell out around Aug 2004 before they meet about the Washington Accord. My guess is that marks an IT top somewhere in there. JMHO.
I don't think they will cave in the markets before semi-annuals. But in early July..Ssssssssssssssss BOOM!!!!!!!!!
USD just plunged.
** Great page for those of you that follow credit spreads on bonds.**
http://www.bonds-online.com/asp/corp/spreadbank.html
Re:Nikkei, Probably not much. Japan's largest customer (us) has to go through it's K winter still. Plus there bond bubble is going to kill them when it pops. An equity rally could be the catalyst to start that process. JMHO.
George, Agreed. I was only talking about JGB's to short. Stocks? Well...drawing blood from a stone now. The damage has been done already.
George, where are JGB's going? The only place to go is down in price and up in yields. If JGB's are one of the biggest bubbles, I don't know what is. Actually, UST's are in a big bubble as well. Waiting for the stochastics pop on the indices. This next decline is going to be butt ugly I think.
If the wee caps exploded, we are in the blow off phase now.
George, mutual fund question for you. Do you know of any fund that is an inverse JGB bond fund. Looking for a short Japan Govt bond fund. That house of cards could surpass gold if it caves in. Thanks.
"The Next Quake Is Close"
With funds pouring out of Japanese stocks and into bonds, analysts fear another huge bubble is on the verge of collapse
By George Wehrfritz
NEWSWEEK INTERNATIONAL
June 9 issue — The form it will take is hard to forecast—an oil-price spike, perhaps—but a shock is bound to expose Japan’s bond market as a huge bubble, says John Alkire, chief investment officer at Morgan Stanley Asset & Investment Trust Management in Tokyo. “I don’t know the date of the earthquake, but I sure think it’s close.”
A GROWING CADRE of Japan analysts predict upheaval in the world’s second largest bond market. Investors, who saw no limit for Japanese stocks in the late 1980s, now seem to see no limit for bonds. Since the 1989 stock- market crash, money has moved from stocks into the perceived haven of Japanese Government Bonds in amounts so excessive, it now puts the entire public-sector financial system at “high risk,” warns PHP Research Institute, a Tokyo think tank. “There’s a danger that the price of JGBs could collapse at any moment.”
The problem is that the Japanese are making a dangerous wager against Japan. To buy a 10-year government bond at current interest rates (0.595 percent) is to assume that the economy will deliver negative growth until 2013—a run of stagnation unprecedented in modern economic history. Should Japan recover, all bondholders will suffer, but the biggest worry is Japan’s weak banks. At the end of 2002 they held 31.4 percent of all JGBs in circulation, and could be driven under by a sudden price collapse. “Once anyone wants out, it’s a disaster,” says Akio Mikuni, president of Mikuni and Co., which rates bonds. “Nobody will support the market then. It will be like NASDAQ in 2000.”
The difference is that the government is at risk, too. Japan’s $8 trillion national debt is now a staggering 151 percent of GDP. Most has been amassed since 1994, when the government began issuing bonds to pay for huge pave-and-build stimulus packages. The share of the budget funded by bonds has since risen from 20 to 45 percent, and is likely to increase so long as Tokyo and local governments continue to sell bonds to finance deficits. This habit of paying old loans with new ones can only continue if interest rates stay near zero. A rise to 1 percent in JGB yields would double Tokyo’s cost of raising new capital, a rise to 2 percent would quadruple it and so on. No major industrial country has ever maintained bond yields below 3 percent indefinitely, so many experts predict a 2 to 4 percent correction. PHP Research forecasts that bondholders will lose a total of .450 trillion ($3.9 trillion) for each percentage-point rise in interest rates.
After banks, the main JGB holders are insurance companies, pension funds and the Bank of Japan. All are at risk, though Michael Petit, a managing director at Standard & Poor’s in Tokyo, calls collapse scenarios “excessively dramatic.” He cites Tokyo’s May 17 rescue of Resona Holdings with $17 billion in public funds. To save Japan’s fifth largest bank “with so few ripples is quite amazing,” he says.
Others have a darker read on the Resona bailout, which has been called a “soft nationalization.” Engineered by Financial Services Agency chief Heizo Takenaka, it could not have succeeded without approval from the Ministry of Finance and the Bank of Japan—powerful agencies that bickered publicly during past bank failures. Their agreement reveals “a consensus that Resona not be allowed to upset the bond market,” says a Japanese financial official who asks not to be named. In other words, they united only to prevent a shock that could burst the JGB bubble. How encouraging is that?
--------------------------------------------------------------------------------
With Hideko Takayama in Tokyo
© 2003 Newsweek, Inc.
http://www.msnbc.com/news/920646.asp?cp1=1
George, watching that triangle on AEM. Could be explosive with that gap above to fill.
http://stockcharts.com/def/servlet/SC.web?c=aem,uu[w,a]daclyiay[pb50!d20,2!f][vc60][iLl14!Lh14,3]&am...
George, my bad. They came out of the gate like a ball of fire and then faded.
Miners starting to go ballistic.
Interesting process...in Massachusetts, you file a complicated form of abatement and the assessor reviews it on the next date of their meeting. Could be up to a half a year to get a response. I have wetlands on 1/3 of my property. However, almost all of my street has wetlands as well so if they were to pass my abatement, they would have to pass the whole streets when the word got out. I have about a snowballs chance in hell of getting mine passed unless I have a friend in the assessors office that is about to retire or something. LOL!!