http://www.etfsecurities.com/en/news/etfs_news_080916.asp

LSE have stopped trading these as AIG back most of the indicies. Sounds like they are now worthless...

Yes there is a big hole in my pension now where money used to be!

I knew there was a small risk buying these, but if this sort of thing is unwinding then there's every chance that the entire financial system will collapse.

We'll just have to wait and see. In theory they have just been suspended, so they might have some value. My mate is even more annoyed - his gold holdings are untradeable, what a crap safe haven that turned out to be!

I don't think I'll be putting any more money into my pension pot though, I'll just sponge off the state like everyone else.

just called etfsecurities and actually got through to one of the technical guys.

basically they have called in the value of their commodities from AIG. If AIG get a loan tonight, then they will be able to pay something to anyone using the DJ/AIG commodities index. Otherwise they are worth nothing and i lost all my money set aside for something ultra safe...

as well as commodities and bond insurance, if AIG go, all the pensions and savings of millions (hundreds of millions?) of people are wasted. the whole financial system will collapse before the end of the week. i just cannot believe how fast this has happened

Thanks for the update. There is some more info on the iii AIGA.L board as well. I'm devastated to potentially lose half of my SIPP in an afternoon. My friend is devastated because he's lost his gold ETF, and that's meant to be a hedge against this happening! Luckily it's money we can afford to lose but there must be loads of people who will be in real trouble because of this.

I'll be paying further pension contributions into my mattress .

too right - i am going to london to buy some coins this week - hopefully there will be some left

sounds like AIG might get a loan now, which should mean we get something back - it really is a black swan for me. just to watch as i tried to sell the gold for it to say the value was now 0...

not sure how etf will handle it if they get all the cash back - might take a while to distribute - fairly unprecedented

triple A to 0 in no time at all - what a joke

The solution: http://goldmoney.com.

Own the real stuff. I've used them for over two years, no problems, very reliable.

Alternatively, www.coininvestdirect.com or www.goldline.co.uk

http://www.etfsecurities.com/en/news/etfs_news_080917.asp

apparently trading will start again soon. cannot see how that will work, given everyone will want to sell. it is just market preception of what they are worth and everyone is running scarred.

would be very brave to rely on them now, but perhaps AIG really are just too big to fail and that is the security offered. seeing those AIG policyholders in HK this morning trying to get their pensions and life savings out was scary.

They should hopefully continue to track the indicies like they are meant to, otherwise we'll see the chaos like we had on Monday.

I can't see how gold will be of any use in a deflationary environment - I'm stockpiling cash.

You're stockpiling a promise by a bank to give you cash (or electronic bits and bytes)....not much use if bank has no cash left.....

This in not a typical inflation vs. deflation scenario, this is an inflation vs. total collapse scenario....

i spoke to ETF again just now. apparently they will be trading against the indicies tomorrow - possibly by 8am, but they thought slightly later.

i said that I thought everyone would sell, but they said that was fine, the only movement will be on the index - and not only that, but that trading had only ever been affected by the index (not credit risk factors on AIG)

will have to see that tomorrow and hope for the best

in the mean time I have just bought 5 Kruggers at the local jewelery store - they had none in stock, but called up their supplier who apparently said - "there are a lot around, but no one wants to sell them"

looks like we might have had a lucky escape - very educational!

tried to sell this morning - still not being traded yet

ETFS Securities are currently in a conference call with institutional investors.

My guess is they have to ensure the big boys don't dump the stock when the market reopens.

There should be some more news later on today - keep checking their website.

i was on the call.

they are apparently still trying to convince market makers to participate in the trading of these securities. the market maker takes the risk from us for 3 days before being able to redeem from AIG - their concern is the 3 days during which AIG may default - this risk over the 3 days is likely to push up spreads.

until the credit risk of AIG is clarified - who knows what will happen, as the market makers will probably not proceed.

no indication of the timings were given.

etf are trying to upgrade the products at the same time so they have 100% collateral on the securities at all time, which would make them credit worthy again - as opposed to the credit of AIG.

there is an alternative etf could do which is call in the collateral on the whole lot of securties. one of the questions was why they do not do this, as this is clearly the priority for investors. they said they were not sure this reflected all investors views who might still want exposure to the underlying (and of course AIG credit risk)

in short, no clue how much we get or when we get it if we get it. i am back to assuming worst case...

I've just sold £38k of ETFS physical gold. It was easy to do on Selftrade. I think this is different to the other ETFS products not based on physical though.

... however, my wife's ETFS SLVR cannot be traded

i think that is right

the etf idea is just to get exposure to the underlying, but in reality we get exposure to the company credit risk also. i think this experience shows it is really a flawed investment idea, as the credit risk is not allowed for in the price

probably goes for all derivatives - like Soc Gen Warrants etc...

Breaking news - the Leveraged ETC's are back being traded.

The others will follow (but not today).

It's looking good!!!

http://www.etfsecurities.com/en/news/etfs_news_080919.asp

great news!

was out today so missed the chance to sell some leveraged gold I had. did you manage to sell anything?
i imagine the spread will fall after three days, that way the market makers will get some experience in AIGs credit worthyness.

Might be a good idea to sell at the end of next week - although to be honest I would be happy with a 5% loss just to get some money back

I sold out of my short Agriculture ETF this morning. I took a nasty 12% haircut, but it's better than a 100% haircut!!! I also wanted to sell out to close down all my positions before I go on holiday.

IMHO commodity markets are too volatile to trade at present due to the large currency fluctuations and the massive deleveraging we're seeing.

i did the same on my leveraged gold, it was up, but i took a big haircut also.

looking around for gold coin dealers now. etfs are dead, even if they managed to get rid of the unpriced for credit risk, there are still other risks like operational risk that are not in the price.

Mmmm. That was a Wiley-E.Coyote moment. Didn't sell today. The spreads on BULL were outrageous :11.70-12.00

What's really interesting is how this has ratcheted up the idea of counterparty risk among all professional investors and really hardened attitudes. Everything has rude suspicion etched all over it. Almost everybody with substantial assets to invest is talking to market-makers, bank managers, fund managers, financial planners etc as if they were total scum. "Just do as you're ***** well told" .... "Look, if you want to **** about, I'll go elsewhere".... "You can just **** off" is all I heard last week.

The idea of counterparty risk has filtered down from the banks to individuals. A lot of professional investors are now looking at guaranteed deposit schemes as little more than a necessary fiction. Of course, in theory, everyone knew this was the case. Now they genuinely factor it in to all investment decisions. Everybody is looking at everybody as if they were a pod from that movie Invasion of the Body Snatchers (the early black & white version is best - and the ending scarier).

When you suspend ETFs, you shouldn't be surprised if people start to think of the smiley counter clerks in Building Societies and similar institutions as just drones in the pyramid (selling) edifice and speak to them accordingly.

In thirty years, I've never seen it like this.

AIG were triple A rated not long ago. In a heart beat they are bankrupt.

There must have been a massive amount of lieing going off by all sorts of vested interests. Small wonder everyone industry wide is now seen as totally dishonest.

I was on the ETF conference call this morning. They said they were not allowing trading in the classic ETFs. Someone asked why this trading was happening with some market makers in contradiction to what they were saying. Then they admitted it was happening in some cases, over the phone with some market makers.

These events probably explain some of the attitudes it sounds like you picked up - although **** is general city speak these days

now it just gets sillier and sillier.

Morgan Stanley and Goldman Sachs converting to deposit-takers is a bit like asking a fox if he wants to stay outside and get torn apart by bloodhounds or would he possibly accept a job as an egg-counter in the chicken coup ? Fox do probability real good. Fox be good doggy for a while.

This is a real pain. I've got physical gold with UBS and I've now got to go through the original contract (in German) to establish who legally holds title. Christ, if you have to check title on every transaction the entire system will grind to a halt.

I've actually met Ospel, Varley, Wanless and a few others at various functions over the years. But as one venture capitalist said to me the other day, "I'd tell 'em to sit up straight when they talk to me" -a touch (or rather a shedload ) of hubris one might think - but he's right. There are still good entrepreneurial companies out there between £10-£50m and in the current circumstances, many of them are saying they will finance expansion through acquistion of distressed assets from cash-flow and the banks can go **** themselves. I've never seen this business model in thirty years. Businesses always gear up and play the probability that they can beat the bank. Not so today. Banks are being left with bad loans and good companies are walking away. If they don't have the money anymore, then they can't talk the talk or do the walk. One Exploration & Production investor I know said he could probably finance a bid for Barratts or Bradford and Bingley without bank finance but couldn't be bothered to go throught the can of worms. Contempt has reached cosmic levels.

etfs are back trading - probably more awful haircuts!

Yes be careful in this market - there are hugely powerful forces at work with these multi billion dollar bailouts! That oil price spike yesterday was scary.

Now out of the etfs.

This isn't going to a rook & pawn end-game. There are going to be some pawn sacrifices to try and clear the decks. Hmmm. You know things are really bad when I descend to mixed metaphors.

at the ETF meeting this morning they were asked to explain why the high trading volumes seemed to differ so wildly from the released figures of sales. apparently people were actually buying these ETFs today - difficult to believe.

i wonder if they ever stopped selling them even when sales were suspended

spreads back to normal now - good time to sell - what an eye opener that was!

Yup, cleared out my Gold ETF for a small profit and reduced to just a few £k in PHAG, OILB & WEAT just to keep a toe in the water.

Certainly learned a few lessons over the last couple of weeks or so, and not likely to "Go Large" on ETFS for sometime.

The markets (generally) are sooooooo confusing, illogical and contrary to fundamentals at the moment. Making a bit difficult to decide what the hell to do sometimes!.