For a weekend open thread and discussion, I though I'd give you a compilation of the comments I've added throughout the day to the previous thread. I do this for three reasons:
- There are some pretty good insights that would be missed otherwise by those who only read the main threads and not the comments that follow.
- I'm too lazy to type a new thread.
- I'm out of time and I need to go cut the grass. Not that the grass needs mowing per se. But I need the stress relief and the Friday afternoon beer always tastes that much better after working up a good sweat.
Remember, BoA recently repositioned $53T in CDS from their ML subsidiary to their BoA NA sub. In preparation for a default which they can pass along onto the American taxpayer??
This chart lays it out pretty well.
Based on bond prices alone, overt QE does not look imminent. However, why the rally today? And why is the 30-yr not participating at the same rate as the 10-yr? Note that the spread has compressed to just 120 basis points. And who, for the love of pete, is willing to give money to Uncle Sam for 30 years at an annual yield of just over 3%?
Regardless, block out all the noise about WOPRs and OI and CoTs and the like and you're left with an investment climate of negative, real interest rates. Negative, real rates have always been and always will be one of, if not the, driving factor behind precious metal accumulation. More here:
Here's a great Rick Santelli video from this morning:
The rise of OI from the bottom near 395,000 was due to some new spec longs and some new bank longs absorbed by a 15,000 increase in The Cartel short position (net short addition of nearly 11,000). Looks like The Cartel is not ready to see gold rise anytime soon.
The drop of OI was due to everybody exiting at once. Spec longs, EE longs, EE shorts all down and the EE net short ratio expanded to 1.56:1. Again, yuck.
After the good CoTs of the past few weeks, this one is s real downer. Looks like The Cartels are not expecting, nor are they going to allow, a significant move higher anytime soon.
On that note, have a happy weekend!
I've always thought that Louise Yamada was the best technician on the planet. Heed her words:
I HOPE THAT EVERYONE HAS A SAFE AND RELAXING WEEKEND! TF
p.s. I've got Bodemeister in The Derby tomorrow. Yes, I realize that no horse that was unraced as a 2-year old has won The Derby since, like, 1887 or something. Who cares. I'm on him!