Ready To Walk On The Wild Side?

As we get set to begin what is certain to be a wild week, perhaps we should let Lou Reed set the tone.

Much wailing and grinding of teeth over the weekend regarding the confusing series of announcements from the CME. First, they said they were going to increase maintenance margins to initial margin levels. This would have had an immediate, across-the-board impact on commodities. Then, as if correcting a typo, the CME reversed course and, in a subsequent release, decided to decrease initial margins to maintenance margin levels. Are you confused yet? Maybe that was the idea. What a clueless bunch of delta-bravos they are.

At any rate, instead of a margin hike, we've kind of gotten a margin cut in that it will now take less money to initiate a position. Will this matter much? I suspect not but, at a minimum, at least we're not expecting the huge selloff tonight that many were fearing 48 hours ago. And maybe, just maybe, with this small cut in initial margins and the removal of some of the concern regarding MFing Global, maybe just maybe we can have an UP week. Here are your charts:


And lastly, a couple of items from Eric King. First, a quick interview of Andy Maguire (yes, he's a real person):

Then, if you haven't already, please take the time to listen to Eric's interview of Bart Chilton.

And, of course, every time I mention Bart Chilton, I can't help but think of Alex Chilton. Here's your link:

Chill and be cool. See you Monday. TF

9:45 am EST UPDATE:

We're off to a hot start in what promises to be a crazy, f'd up week. We've got Greece, Italy, comet flybys, disaster drills, IAEA name, it's coming! Look for lots of volatility.

Speaking of which, here are some levels to watch. Again, these are levels where I anticipate EE capping of price. If no selling emerges, the metals will proceed on to the next defined level.


Have a fun day! TF


Shill's picture

Papandreou to quit as Greece

DiamondEddie's picture

Thanks TF!

Thanks TF!

¤'s picture

Thanks TF

Appreciate the update.

Things are about to get hair raising. Gut check time!

Avocado Lover's picture


Yes ! Thank you so much!

Ratatouille's picture

OT: what's up with YU55 & FEMA/tsunami exercises

Forgive me for OT comment, please.

I would appreciate any insight into the following:

I've been watching the strange news that has come out in the last few days about this 22-year-old Military Police Specialist, William Millay, and the alleged attempted espionage that he is being held for (not yet charged with). Does anyone have any insight into this case? It's very strange. See this article:

Any comments appreciated.

asymptote's picture

--I don't want an up week--

The higher price of a paper contact only means it'll cost more to buy physical. We don't want that. The only case I can see in which we actually want price to rise is in hyperinflation, as we may be able to convert physical in to productive agricultural land.

Bay of Pigs's picture


I consider gold and silver to be severely undervalued. We would need to see $2400 gold and  $130 silver to get close to adjusted for inflation new real highs. Why would I want or think the price should drop under these circumstances?

Inflation is already a very serious problem. Hyperinflation ushers in a massive collapse and depression. That's what we want to see as PM holders?

Titus Andronicus's picture

The amibiguity of the initial CME press release.

The initial statement by the CME was this:

As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed below.

The rates will be effective after the close of business on Friday, November 04, 2011.

                                                                               All Products
Initial / Maintenance Ratio                    Current            New
                                                                       Various               1.0

This must have been intentionally ambiguous.  I can't think of any reason a change of such impact could be so poorly worded.

Economical Disaster's picture

This May Be connected to Possible Tsunami/Asteroid Incoming

Nationwide test scheduled for Nov. 9

"This is a test of the emergency broadcast system," is a phrase heard by anyone with a television or radio.

The test are to insure that broadcast signals are working during a severe weather alert, during which listeners are advised to seek shelter and other life-saving information.

On Nov. 9, the federal government will conduct the first nationwide test of the Emergency Alert System. The test will last up to three and a half minutes. During the test, regularly scheduled television, radio, cable and satellite shows will be interrupted.

The public is being cautioned the test will not take place if a severe weather event is already happening, said Mason County Emergency Management Director Jack Fultz.

Otherwise, the public should not panic while the test is being conducted at 2 p.m., eastern standard time.

According to information provided to Fultz through Federal Emergency Management Agency, the nation EAS is an alert and warning system that can be activated by the president if needed, to provide information to the American public during emergencies.

Read more:

¤'s picture

Bottomline: A stronger Yuan means a weaker USD / The SDR?

US and Britain avert 'currency war' by securing agreement with China to let yuan rise in value

Britain and the US scored a small victory in their battle to avert damaging "currency wars" by securing an agreement from China to let the yuan start rising in value.


DPH: This is a very big deal if it's actually adhered to by the Chinese. A stronger Yuan naturally means a weaker USD and Euro (if it still exists). This is a classic under the radar story most people (except here) won't even notice and have no clue to the significance if this happens.

At some point, the three most important letters going forward as it relates to currencies will be the the USD, RMB and SDR with the order of importance to be determined by history.

Stormdancer's picture

Margin decrease

Word is that 15,000 MFG accounts got transferred Friday.  35,000 to go of the 50,000 total they've chosen to work on transferring.

The margin decrease will help transferred account holders avoid liquidation, but I suspect it won't avoid all liquidations.

The margin decrease will assist buyers across the market in taking on liquidated positions.

But, have we forgotten the other 100,000 accounts that to all appearances nobody is even attempting to transfer?  Are those still slated for an across the board liquidation?

Soze believes MFGs house accounts are probably net short.

With these crooks, would they dare liquidate 100,000 accounts (probably net long as a unit) so as to provide a more attractive exit from MFG's house accounts?

"I'm not ready to give up my gloomy outlook"


Tesla's picture

Much Gratitude Mr Ferguson!

No matter what the price action THIS website and your guidance is always 24 karat awesome!


Shill's picture

Inflation is already a very

Inflation is already a very serious problem. Hyperinflation ushers in a massive collapse and depression. That's what we want to see as PM holders?


The only obvious Deflation is my Home and Property, everything else has doubled.

But hey the economy is strong Economy's Shift Erode States Tax Bases

cpnscarlet's picture

@BoP - "Do we want to see a

@BoP - "Do we want to see a massive collapse..."? Not per se, but do we want to see an end to the bastardization of our republic? Of course. When systems get as complex as the government-banking-financial ogre we have right now, a step-by-step deconstruction is IMHO just not possible. And as to "wanting" wide-spread pain and despair, in my experience, that's about the only route that most people can take to get their head straight - "withdrawal" for lack of a better word. I just can't see another route to a solution for the things that shackle our world right now.

I want to hope for the best, but "I read the news today, oh boy" and I don't see any bright shining horizon. If I did, I'd stop stacking.

Ratatouille's picture

Tsunamis, and bears, oh my

Thanks, ED, for the post. I am also aware that 30 countries will be involved with this tsunami test:

There are a ton of forums/posts talking about an asteroid hit on November 9, shortly after the FEMA test. There, I've said it. I don't trust our government. I have kids. I live on the coast. Can I be more plain??? 

WheelerSilver's picture

Margarine for fat lards

So when the margarine increases we get a price dive. When the margarine decrease we get nothing... BOOO!!! 

I was wondering when they would raise the margarine so much that the speculators would all go home and this thing would be a true physical market... Oh ya that would bankrupt JPM... Wouldn't want to do that... The CME wouldn't want to cut those fat lards off the take now would they... No no of course not... They are depending on that sweet sweet cholesterol. Next up, heart attack! Good luck JPM!


~Handmade Quality Bullion~

Shill's picture

The total debt of the US

The total debt of the US government is $14.97 trillion. Within a day or two, it will pass $15 trillion. Another reason, Ben Bernanke won't stop printing money any time soon.

Be Prepared's picture

The Swaying Motion You are Feeling is....

The Swaying Motion You are Feeling is the Economic Boat losing balance in an ever increasing storm against EE and TBTF.  The fact that the CFTC and CME are colluding with their actions over the failure of MF Global should tell you loads.  I am glad that individual accounts are being freed upon from the potential of years of litigation, but, putting that aside, its another gross manipulation of the system to benefit "Don" Corzine and his "ilk" from facing the calamity of their mistakes.  A true and free capitalistic system works only when the players that fail truly fail and face the full brutal consequences of that failure.  There can be no center of gravity for any of us in an ecosystem to where the laws of nature have been turned off and set to benefit the few and screw the many.

By their own admission MF Global used client funds to use for collateral calls on their house accounts......why hasn't anyone been hauled in to the police for their blatant robbery or embezzlement or both.  The absurdity of each progressive announcement relating to pretty much anything seems to be getting further from anything that would be termed "normal."    I am ever so glad to have all of you, my fellow Turdites, to help me walk through this mess.  Shill's good news does help to keep it all in perspective....  :0}

Stormdancer's picture

Italian BTP

In my opinion, a major thing to watch once Europe opens is the Italian 10yr treasury notes.  They rose from 6.20 to 6.355% Friday in the face of SMP buying.

If that approaches 6.75% start battening hatches because the clouds on the horizon will be getting mighty dark.

Hmm....I distinctly remember a 6.355% close Friday.  Bloomberg is showing 6.37 right now....

kjm's picture


Better drop them Turd, as you probably know, they are being charged with fraud. This comes as no surprise as I've heard allegations of their modus operandi for a few years now.

Mike Victory's picture

Da Silva

Drinkin, Smokin, Singin:

Louie's picture

If walking on the wild side means...

$0.30 spike up in the price of silver in the first 30 minutes, I am all for it!


GoldMania3000's picture

Rising prices

I went to the super market today and bought 11 items....4 rolls of generic toliet paper, 2 rolls of paper towels. 4 bags of steak strips for saled, swiss cheese, pita bread, frozen stir fried, and taco shells.


¤'s picture

gold and silver up

Whew! Am I the only one feeling a little better at the moment?  Better then seeing it plummet.

So far so good.

Stormdancer's picture


I'm hoping for really, really boring markets the next few days.  REAL boring..... :)  If things are boring 2 hours after NY opens, I'll relax quite a bit.

Edit:  I think a slight up is better than down though.  At least the margin pressure is on the shorts that way....not the longs...

Stormdancer's picture


We're entering the third day of an odd little swarm of minor earthquakes, just east of Oklahoma City and southwest of Tulsa.  There have been about 20 earthquakes ranging from 2.5 to 5.6 on the richter scale.  Most have been 3's and all are shallow...4-5km deep.

I'm surprised it hasn't been on the news because that biggest one (5.6) was surely felt by humans.  The 4.7 would have been too.  Some of the 3's probably would have been noticed as well.

Nothing all that remarkable except that Oklahoma isn't exactly known for earthquake activity.

Edit:  google says it has made the news...should'a checked

Shill's picture

4 rolls of generic toliet

4 rolls of generic toliet paper, 2 rolls of paper towels. 4 bags of steak strips for saled, swiss cheese, pita bread, frozen stir fried, and taco shells.

PeaceSilver looking at that menu friend, you should have bought 2 ply. Bon appetit

By the way sounds good. :)

rxmitch's picture

new greek leader

new boss same as the old boss

Maryann's picture

Swaying motion was Oklahoma

Storm, I thought Be Prepared's post was going to be about Oklahoma!  Last night, I was watching tv in bed and the bed started shaking ever so slightly.  Freaked me out!  At first I thought maybe the cat was under the bed grooming himself or something.  I called my husband, who was in the other room, and he came and looked under the bed.  Just then, my son, who was skyping with a friend at college in Oklahoma, came in and said they had an earthquake and had in fact been having them all day.  In all my years in TX I have never felt an earthquake.  Until last night. 

Turd, thank you!  Now, if I can just get the tune of "walk on the wildside" out of my head! : )

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