A2A with Bill Holter

80

Just a great call earlier today illustrating why we host these webinars in the first place. Bill spent nearly an hour answering a wide array of questions from a large group of listeners. Great stuff and you should definitely take the time to listen yourself.

Over the course of the call, Bill addresses topics such as:

  • The Greek situation
  • The OCC report last week showing the exponential increase in commodity derivatives
  • Yesterday's internet and system "glitches"
  • How to protect yourself against confiscation and/or confiscatory taxes
  • And much, much more

Again, this is a lenghthy call so break it up into separate sittings if you need to. Just be sure to take the time to give this a thorough listen. You won't be disappointed.

TF

  80 Comments

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Mr. Fix
Jul 10, 2015 - 7:26am

Losing Control

Losing Control

Submitted by Tyler Durden on 07/10/2015 - 07:16

Markets are beginning to signal that policy makers are losing control. Many second-order-effects of the unprecedented and experimental global actions taken since the 2008 crisis are beginning to manifest. There are always causes and effects that develop; but they do so at different speeds. Many actions in recent years have prioritized 'benefits today' over 'consequences tomorrow'. 'Tomorrow' is approaching ever more quickly. There is no 'free lunch'.

boomstick
Jul 10, 2015 - 7:23am

@maestro

It is a legal contract, so all terms need to be defined. There is a colloquial meaning to 'bankrupt', but if you want payments to trigger on 'bankruptcy' you had better define exactly when that moment occurs. Think of the contract definition as meaning something like 'filing for bankruptcy, or entering the equivalent status for an entity that cannot file for bankruptcy'. Also, 'Bankruptcy' is not a trigger ('credit event') in CDS on sovereign entities, as they are not subject to anything that resembles a bankruptcy process. The arguments on Greece revolve around a 'Failure to Pay'.

boomstick
Jul 10, 2015 - 7:13am

@sb

I should clarify one point -- the dealers and the investors have all different positions, some long, some short. They are all interested parties, to be sure, but they are not monolithic. The outside lawyers are disinterested, which is why they have a veto over anything short of a unanimous vote of the DC.

boomstick
Jul 10, 2015 - 7:09am

@sb

Yes, the committee is made up of dealer reps and investors who are involved in the CDS market. If their judgment is anything other than unanimous, the decision goes to a panel of three outside lawyers, who can reverse the decision. This makes the process reasonably quick and efficient. Bankruptcy resolution in court can take years, and the judges are far from being experts in the details of a particular industry. The point is to also have the decision made in the context of the normal course of business. Ultimately, aggrieved parties can take the matter to court if they think the decisions violate the black-letter terms of the contract. There have certainly been cases where that was threatened, but in the end the parties have usually recognized that the judge is going to say, 'looks like at best a gray area, and no one who has any experience in the business has ever interpreted it the way you suggest, so i'll defer to custom'. The CDS instrument is much better at the 'standard' cases. Unique cases tend to lead to new unresolved issues that have to be clarified in the next update to the definitions.

SilveryBlueboomstick
Jul 10, 2015 - 5:37am

@boomstick can you clarify please?

For a simple girl:

The determination of whether a credit event has occurred, in the context of the definitions, is controlled by regional "determinations committees", each of which comprises 10 dealers and 5 buy-side firms (all of whom must be major CDS market participants). Anyone may submit a request for the DC to determine whether a "credit event" has occurred. If the vote is 15-0, then the DC ruling is final. If there is any dissent, the ruling is reviewed, and possibly reversed, by three outside lawyers.

The people that can declare a default are the same people who own the default swaps? I don't see any barriers to this in the above legislation/rules & accept that I am not a lawyer & do not understand the entire legislative mechanism. I am asking based on the information provided (by you) and possibly imperfectly understood.

Thanks

SB

Libertybella
Jul 10, 2015 - 4:16am
Search
Jul 10, 2015 - 4:15am

Sge week 26 - 44.3 ton, ytd 1206 to

I also put forward that the sge international has traded like 30 kgs in total over the past 6 or 7 days, when it usually trades 10-20 ton a day.

So, looks like sge int. Does not effect sge withdrawal numbers much at all.

china stock market crash and liquidity constraints do not seem to either.

anyone got any ideas on what this means?

or am I just dreaming up shit again??

Libertybella
Jul 10, 2015 - 4:14am

Equatorial Guinea or Malabo

Isn't Equatorial Guinea and the island of Malabo off the West coast of Africa?

Lots of energy businesses in Malabo tapping methane.

Libertybella
Jul 10, 2015 - 4:10am

not Diego garcia

Isnt Diego Garcia East of Africa in the Indian Ocean? This tiny "island" is off the west coast in The Atlantic

James CrightonDr. P. Metals
Jul 10, 2015 - 4:08am

@Dr. P

error. sorry

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