White Shoe Boys

Investors euphoric as US margin debt reaches ‘danger’ levels

"Bank of America’s monthly survey of investors showed a dramatic rise in confidence in August, with a net 72pc expecting growth to accelerate over the next year. It is the highest in reading since 2009. Almost everybody expects bond yields to rise as deflation fears evaporate, with just 3pc still worried about the risk of an economic relapse. Managers have slashed their bond allocation to a 28-month low. The exuberant mood comes as margin debt on Wall Street hovers near $377bn, just below its all-time high and well above peaks before the dotcom crash and the Lehman crisis." Continue reading →

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Bill Bonner: Moms & pops to be skinned again

"The idea is to buy low and sell high. Poor old mom and pop can't seem to get it right. They buy high and sell low. Dalbar, an outfit that tracks investment performance, calculates that $100,000 invested 20 years ago would have grown to $484,000 if you just left it in the S&P 500 and did nothing else. But the typical investor waited too long to buy and then sold out when stocks went down. At the end of 2012, he had only $230,000. And now that stocks have been run up - by the Fed's easy money policies - for 5 years, Mom and Pop can't help themselves. They're back in the stock market...ready to be skinned again." Continue reading →

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Is the Gold Market Manipulated?

"By arguing whether or not gold manipulation exists, we may find that we are wasting our brain cells on the question. A better question, and one that we might choose to monitor on a regular basis, might be, 'To what degree is successful manipulation taking place?' We might then use the on-going answer as a guide, to inform our reasoning going forward, as to what impact any perceived manipulation is likely to have with regard to our precious metals investment." Continue reading →

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Bitcoin Ticker Available On Bloomberg Terminal For Employees

"Bitcoin is now officially mainstream. According to BTC Geek, Bloomberg terminal users can now look up Bitcoin’s pricing history. Data comes from ubiquitous Bitcoin exchange service Mt. Gox as well as Tradehill. For now, only Bloomberg employees can access the ticker. But the feature should make its way to regular Bloomberg terminal customers under the label XBT. The ticker probably shows what a bitcoin is worth in U.S. dollars over time. With the Bloomberg terminal, traders could easily compare Bitcoins with other currencies in order to short them." Continue reading →

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Peter Schiff: What Doesn’t Kill Gold Makes It Stronger

"In July, the gold net-short positions reached record highs. When gold began to rebound last month, a massive number of shorts were left exposed and many still remain exposed. Gold shorts are stuck holding the losing bet on an asset that is going to do the opposite of what they anticipated. If the price rally continues, these traders will feel increasing pressure to unwind their shorts before their losses become catastrophic. This 'short squeeze,' as it is known in finance, will reverse the vicious cycle and could send gold dramatically higher than when the correction started." Continue reading →

Continue ReadingPeter Schiff: What Doesn’t Kill Gold Makes It Stronger

Bill Bonner: The Bottom Is Still Ahead for This Bear Market

"The last top in Treasury prices (and a bottom for yields) occurred in 1946. Yields rose for the next 34 years. Now the Treasury market appears to be topping out again… and is headed for a new high in yields… which may not arrive until 2047. It may be a long way off… or right around the corner. Either way, it will be hell getting there. The Detroit pension disaster is just the first of many. Wait until long-term interest rates hit 5%… or 10%. How many companies, cities and pension funds will still be solvent? We’ll see! But wait. You don’t think the Fed will sit on its hands and let the markets take over, do you? Taper off? Forget it." Continue reading →

Continue ReadingBill Bonner: The Bottom Is Still Ahead for This Bear Market

What’s in the Vault?

"The request represented less than 5% of all the gold that the Fed officially holds in its New York vaults. (Interestingly, an earlier request by Germany to inspect its assets was denied by the Fed). Despite the relatively small request (relative to the total holdings), repatriation is expected by 2020. Perhaps for fear that she may be 'persuaded' to accept being 'cash-settled' with U.S. dollars in lieu of gold, Germany dared not complain. The letter issued on April 1, 2013 by Dutch State-owned ABN-AMRO bank to holders of paper claims to gold and silver held in its vaults advised that any physical metal custodied at the bank would in the future be 'cash-settled'." Continue reading →

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Should insider trading be legal? Insiders say yes

"Perhaps the folks at hedge fund SAP Capital Advisors, who have recently pleaded guilty to insider-trading charges, should have run for Congress. Last week, the Securities and Exchange Commission served the firm with a criminal indictment and continues pressing civil charges against its founder Steven Cohen. The agency hasn’t done much about accounting fraud, or other shenanigans that lead to the 2008 financial crisis, but insider trading remains a priority. Over the past three years, the SEC boasts of filing 168 insider trading cases, more than any three-year period in the agency’s history." Continue reading →

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Why Oil Could Move Higher–Much Higher

"A more intriguing dynamic has been presented by Financial Times reporter Izabella Kaminska over the past year: Financiers are buying oil as collateral for various speculations. Kaminska sees this financial hoarding of oil (i.e., reduction of supply) as inducing 'scarcity amidst plenty.' In broad terms, I would characterize this as one aspect of the financialization of commodities. The financialization of commodities is driven by several macro factors: 1. The scarcity of non-phantom, easily tradable collateral in a financial system that is increasingly dependent on phantom collateral. 2. A scarcity of sound investment opportunities." Continue reading →

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Bank of England refuses comment on huge discrepancy in custodial gold reports

"The Bank of England refuses to explain what appears to be a huge discrepancy in its accounting of the gold it holds in custody, a difference of as much as 1,200 tonnes between the total reported in the bank's annual report in February and the total reported in a 'virtual tour' of the bank posted this month at the bank's Internet site. The discrepancy was noted by GoldMoney research director Alasdair Macleod last week during an interview with Max Keiser on the 'Keiser Report' program on the Russia Today television network." Continue reading →

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