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sharpe

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Posts posted by sharpe

  1. 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

  2. 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

  3. 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.

  4. surely deflation in things that people typically use debt to acquire, as debt financing is vanishing. So housing is a deflation. anything you buy in cash might expect to have high inflation. so food etc...

    as you say those bail outs were highly inflationary. and the austrian school predicts that will end with the collapse of the dollar and hyper inflation.

    cash and gold at the moment sound good.

  5. 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

  6. 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...

  7. 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...

  8. 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!

  9. 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.

  10. i am pretty pleased with that - as i had a load of money in gold, silver and agricultural etfs backed by AIG. yesterday trading stopped in them - etfsecurties called in the collateral from AIG and they would have been worthless if AIG went broke.

    triple A rated company - worlds largest insurer - you might think is a safe place for your money - what a joke.

    lesson learned - gold coins and bullion in a safe from now on!

  11. 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

  12. 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

  13. that is bascially back to where it was when you started this topic...

    clearly very volatile and dangerous to suggest anyone knows what is happening.

    if the Fed is selling gold and lieing about it, like James Turk is suggesting, then the price could go down quite a lot until they have none left (a long time) or there is an audit on the gold supplies (unlikely under either of the current parties)

  14. Put it in the currency you intend to spend it and be concerned about inflation.

    I agree with that most of the time.

    But at the moment - do you know a pound based investment that provids the 20% net inflation rate I am paying on food and energy?

    We are basically being forced into speculation, as saving your money in pounds is not at all safe. I have a load in gold and silver - but am thinking of the yen and swiss franc.

    Barclays have an FX trading platform, that does allow you to get long term exposure to other currencies (also allows short term trading which I would lose massively on). if you write to them on www.stockbrokers.barclays.com they will talk you through it and send a demo.

  15. in the telegraph article on the new blog yesterday, it said Goldman's had gone short on gold.

    as the queens of market manipulation - that possibly means there is some more government intervention going on with Goldman getting the usual inside information.

  16. SEASONALITY

    You guys need to understand that gold is very seasonal. Due to local buying customs it usually does very well between Sept and March each year. We are currently just coming to the end of a dormant period (April to August).

    is that effect up to 30%? seems a high fall especially given the other factors i mentioned. i will take a look at the price history

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