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Gold Advances to Record in New York, London After Jobs Data
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By Nicholas Larkin and Chanyaporn Chanjaroen
Nov. 6 (Bloomberg) -- Gold rose to a record in New York and London trading after a report showed U.S. employers cut more jobs than forecast in October, boosting demand for the metal as store of value.
Bullion is heading for a ninth consecutive annual gain and approaching $1,100 an ounce for the first time as investors seek to protect their wealth from the threat of inflation and the debasement of the U.S. currency. Payrolls fell by 190,000 workers last month, compared with a 175,000 drop anticipated by the median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed today.
“There’s massive investment demand for gold at the moment,” said [url=http://search.bloomberg.com/search?q=Christoph+Eibl&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:S:d1]Christoph Eibl[/url], co-founder of Zug, Switzerland- based Tiberius Group, which manages $1.8 billion. “I see more liquidity pumped in to lift the economies from bad news.”
December gold futures climbed as much as $9.70, or 0.9 percent, to $1,099 an ounce on the New York Mercantile Exchange’s Comex division and were up 0.1 percent at $1,090.30 by 8:56 a.m. local time. Immediate-delivery bullion added as much as 0.8 percent to $1,098.50 in London and was last little changed at $1,090.05.
The metal advanced to $1,095 in the morning “fixing” in London, an all-time high, from $1,089 at yesterday’s afternoon fixing. Some mining companies use fixings to sell production.
Global Recovery
“We believe the rally in gold prices will continue,” [url=http://search.bloomberg.com/search?q=Michael+Lewis&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:S:d1]Michael Lewis[/url], an analyst at Deutsche Bank AG in London, said in a report today. “Further advances in the gold price will be based on fresh lows in the U.S. dollar, central bank buying of gold” and “increasing inflation volatility.”
Sri Lanka’s central bank, which has been purchasing gold for the last seven months, will continue buying the metal as a hedge against volatility in currency markets, [url=http://search.bloomberg.com/search?q=Ajith+Nivard%0ACabraal&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:S:d1]Ajith Nivard Cabraal[/url], the central bank’s governor said today. Cabraal, speaking in Colombo, declined to say how much had been bought.
Sri Lanka held 5.3 metric tons of gold as of September, according to World Gold Council data.
Seventeen of 23 traders, investors and analysts surveyed by Bloomberg, or 74 percent, said bullion will rise next week. Four forecast lower prices and two were neutral.
“We are rather concerned about the crowded nature of the gold market, for everyone, everywhere is long of gold and bearish of the U.S. dollar,” economist [url=http://search.bloomberg.com/search?q=Dennis+Gartman&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:S:d1]Dennis Gartman[/url] said in his Suffolk, Virginia-based Gartman Letter.
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, declined to 1,108.34 tons as of yesterday from 1,108.40 tons on Nov. 4, figures on the company’s Web site showed.
Among other precious metals for immediate delivery in London, silver fell 0.3 percent to $17.355 an ounce. Platinum dropped 0.5 percent to $1,349.50 an ounce and palladium was little changed at $330.15 an ounce.
To contact the reporter on this story: [url=http://search.bloomberg.com/search?q=Nicholas+Larkin&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:S:d1]Nicholas Larkin[/url] in London at nlarkin1@bloomberg.net[url=http://search.bloomberg.com/search?q=Chanyaporn+Chanjaroen&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:S:d1]Chanyaporn Chanjaroen[/url] in London at cchanjaroen@bloomberg.net
Wow, The Bush years messed things up worse than we thought huh? Although I think Obama is part of the problem, he's damned if does and damned if he doesn't.
What is even more encouraging, Central banks all over the world, seing that financial aid given to banks led just to new bubbles, now are starting to stop these programmes. I.e. the fall is going to accelerate very soon.
Last edited on Fri Nov 6th, 2009 09:06 pm by O.Bender
Gold prices hit a record above 1,100 dollars on Monday with the dollar weakening after a pledge by G20 countries to keep economic recovery pumped up with easy money.
In morning trading here, gold struck an all-time peak of 1,109.50 dollars an ounce as the euro rose to 1.50 dollars for the first time in two weeks.
Gold "established itself above the psychological (1,100-dollar) level this morning as ministers at the weekend G20 meeting pledged to maintain their fiscal stimulus measures," said James Moore, an analyst at TheBullionDesk.com.
Though, to be fair, I'm not sure the man could succed in any other country... The reason the World is going to crush - most of people don't think, all they want is just to fit the current situation.
robertr2000 wrote: WA Mozart wrote: Wow, The Bush years messed things up worse than we thought huh? Although I think Obama is part of the problem, he's damned if does and damned if he doesn't.
Stick a fork in us, we're done!
A few thoughts here...
Er, have you ever heard of a government run institution called Fannie Mae or Freddie Mac? Do you have any idea what they do, and how they were used by Congressional Democrats to implement a socialized agenda known on Capital Hill as 'Fair Housing?' Lemme try and explain. Banks are in the business to make money. Usually they have a Board of Directors, an executive staff and many, many shareholders as well. All of these people are watching the balance sheets of said bank to make sure that they are operating in a profitable manner. Simple, isn't it? It's pure capitalism. That's what banks do. It's called usury, the lending of money at a given interest rate.
Now, let's get back to Fannie Mae and Freddie Mac. Over a period of nearly a decade, Democrats on Capital Hill wished to increase the number of home owners in the United States, especially those who are on the margins and who could least afford the mortgage payments. Rather than voting a given amount of money from the federal budget to accomplish this, they decided to put 'pressure' on the banks to make loans which normally a capitalistic enterprise such as a bank could never do. It made no sense to give risky loans which might affect a banks balance sheet. There are shareholders to consider, not to mention the Board of Directors. So, the pinheaded morons on Capital Hill, primarily Barney Frank and Christopher Dodd, used the two government controlled mortgage guarantors, Fannie Mae and Freddie Mac, to back all of those risky inner city mortgages (and others) with the power of the US federal government. Got it? With me? These 'risky' mortgages were no longer considered 'risky' by Wall Street because they had the backing of the US government (FM and FM). So, they (Wall Street brokers) bundled them up into deravitives and other "way cool" financial packages and marketed them around the world. The numbers climbed and climbed, ....massive. Not only that, the US Federal Reserve kept interest rates low during a bubbling mortgae market (2004-2008), which made such investments even more profitable. Got it?
Therefore, fundamentally, the implosion of the US mortgage market was a direct result of pinheaded jerks in the US Congress who manipulated an efficient market through the use of government intervention, Fannie Mae & Freddie Mac. It was not capitalism which was at fault here, nor the efficient movement of supply and demand. No US bank would have invested massive amounts of their own capital into risky mortgages without the government interference in the market place. It's that simple.
And, as per today's Wall Street Journal, the morons of the Obama administration (note: not Bush) are continuing to use Fannie Mae and Freddie Mac to support high risk mortgages. Wow. Unbelievable.
If you really want to understand how corrupt our current government is, you need to read this article from the Wall Street Journal. It's self explanatory and it's shocking...
http://online.wsj.com/article/SB10001424052748704402404574527440083580698.html
Through this program, taxpayers are directly subsidizing homeowners who borrowed more than they could afford, or more than their house is now worth, or both. The government is doing this under the cover of losses at Fannie and Freddie because Congress and the White House know these programs are both expensive and unpopular with the poor saps still paying their mortgages on time.
The dynamic duo's delinquency rates also continue to climb, even on modified loans and on mortgages on which Fan and Fred have chosen to forbear from demanding repayment. The $400 billion that Congress has appropriated to keep Fan and Fred afloat, in other words, has quietly morphed from emergency aid into a $400 billion housing subsidy program. On current trends this will all be spent before President Obama is up for re-election, and, judging by the results so far, taxpayers will have little to show for it.
Having ruined the U.S. mortgage market, Fan and Fred have become the tools for its continued nationalization and a never-ending bailout of mortgage borrowers. This is one reason we advised former Treasury Secretary Hank Paulson to put the companies into receivership and leave them in run-off mode when he had the chance.
Instead, Mr. Paulson placed them in conservatorship and sent them out to lend more and more. In the past year, they have all but erased the private mortgage market, at great cost to both the taxpayer and the integrity of the private financial system. They will roll snake-eyes for taxpayers for years to come.
Mozart
Last edited on Wed Nov 11th, 2009 08:22 pm by WA Mozart
Thanks Mozart, I know about Fannie and Freddy. But how did Fannie and Freddy (or Obama) bring down AIG? Or Iceland for that matter?
I think Fanny and Freddy were a big part of it for sure but without CDS's, none of this would have happened. Or it would have happened but only to the sub-prime's of the world.
see Newsweek article: http://www.newsweek.com/id/161199
Sep 27, 2008 - "So much of what's gone wrong with the financial system in the past year can be traced back to credit default swaps, which ballooned into a $62 trillion market before ratcheting down to $55 trillion last week—nearly four times the value of all stocks traded on the New York Stock Exchange. Since credit default swaps are privately negotiated contracts between two parties and aren't regulated by the government, there's no central reporting mechanism to determine their value. They've proliferated around the world and now lie hiding, waiting to blow up the balance sheets of countless other financial institutions."
How did Fannie and Freddy cause this to affect you and I? Answer, they didn't. CDS's are to blame.
robertr2000 wrote: Thanks Mozart, I know about Fannie and Freddy. But how did Fannie and Freddy (or Obama) bring down AIG? Or Iceland for that matter?
I think Fanny and Freddy were a big part of it for sure but without CDS's, none of this would have happened. Or it would have happened but only to the sub-prime's of the world.
see Newsweek article: http://www.newsweek.com/id/161199
Sep 27, 2008 - "So much of what's gone wrong with the financial system in the past year can be traced back to credit default swaps, which ballooned into a $62 trillion market before ratcheting down to $55 trillion last week—nearly four times the value of all stocks traded on the New York Stock Exchange. Since credit default swaps are privately negotiated contracts between two parties and aren't regulated by the government, there's no central reporting mechanism to determine their value. They've proliferated around the world and now lie hiding, waiting to blow up the balance sheets of countless other financial institutions."
How did Fannie and Freddy cause this to affect you and I? Answer, they didn't. CDS's are to blame.
Some day, I hope all the people responsible for this mess are brought to justice. And, I dont care what party they're in. Someone needs to go to jail.
The Engine wrote: robertr2000 wrote: Thanks Mozart, I know about Fannie and Freddy. But how did Fannie and Freddy (or Obama) bring down AIG? Or Iceland for that matter?
I think Fanny and Freddy were a big part of it for sure but without CDS's, none of this would have happened. Or it would have happened but only to the sub-prime's of the world.
see Newsweek article: http://www.newsweek.com/id/161199
Sep 27, 2008 - "So much of what's gone wrong with the financial system in the past year can be traced back to credit default swaps, which ballooned into a $62 trillion market before ratcheting down to $55 trillion last week—nearly four times the value of all stocks traded on the New York Stock Exchange. Since credit default swaps are privately negotiated contracts between two parties and aren't regulated by the government, there's no central reporting mechanism to determine their value. They've proliferated around the world and now lie hiding, waiting to blow up the balance sheets of countless other financial institutions."
How did Fannie and Freddy cause this to affect you and I? Answer, they didn't. CDS's are to blame.
Some day, I hope all the people responsible for this mess are brought to justice. And, I dont care what party they're in. Someone needs to go to jail.
Yup
robertr2000 wrote: The Engine wrote: robertr2000 wrote: Thanks Mozart, I know about Fannie and Freddy. But how did Fannie and Freddy (or Obama) bring down AIG? Or Iceland for that matter?
I think Fanny and Freddy were a big part of it for sure but without CDS's, none of this would have happened. Or it would have happened but only to the sub-prime's of the world.
see Newsweek article: http://www.newsweek.com/id/161199
Sep 27, 2008 - "So much of what's gone wrong with the financial system in the past year can be traced back to credit default swaps, which ballooned into a $62 trillion market before ratcheting down to $55 trillion last week—nearly four times the value of all stocks traded on the New York Stock Exchange. Since credit default swaps are privately negotiated contracts between two parties and aren't regulated by the government, there's no central reporting mechanism to determine their value. They've proliferated around the world and now lie hiding, waiting to blow up the balance sheets of countless other financial institutions."
How did Fannie and Freddy cause this to affect you and I? Answer, they didn't. CDS's are to blame.
Some day, I hope all the people responsible for this mess are brought to justice. And, I dont care what party they're in. Someone needs to go to jail.
Yup
What Does Structured Investment Vehicle - SIV Mean?
A pool of investment assets that attempts to profit from credit spreads between short-term debt and long-term structured finance products such as asset-backed securities (ABS). Funding for SIVs comes from the issuance of commercial paper that is continuously renewed or rolled over; the proceeds are then invested in longer maturity assets that have less liquidity but pay higher yields. The SIV earns profits on the spread between incoming cash flows (principal and interest payments on ABS) and the high-rated commercial paper that it issues. SIVs often employ great amounts of leverage to generate returns.
robertr2000 wrote: Thanks Mozart, I know about Fannie and Freddy. But how did Fannie and Freddy (or Obama) bring down AIG? Or Iceland for that matter?
I think Fanny and Freddy were a big part of it for sure but without CDS's, none of this would have happened. Or it would have happened but only to the sub-prime's of the world.
see Newsweek article: http://www.newsweek.com/id/161199
Sep 27, 2008 - "So much of what's gone wrong with the financial system in the past year can be traced back to credit default swaps, which ballooned into a $62 trillion market before ratcheting down to $55 trillion last week—nearly four times the value of all stocks traded on the New York Stock Exchange. Since credit default swaps are privately negotiated contracts between two parties and aren't regulated by the government, there's no central reporting mechanism to determine their value. They've proliferated around the world and now lie hiding, waiting to blow up the balance sheets of countless other financial institutions."
How did Fannie and Freddy cause this to affect you and I? Answer, they didn't. CDS's are to blame.
robertr2000 wrote: robertr2000 wrote: Thanks Mozart, I know about Fannie and Freddy. But how did Fannie and Freddy (or Obama) bring down AIG? Or Iceland for that matter?
I think Fanny and Freddy were a big part of it for sure but without CDS's, none of this would have happened. Or it would have happened but only to the sub-prime's of the world.
see Newsweek article: http://www.newsweek.com/id/161199
Sep 27, 2008 - "So much of what's gone wrong with the financial system in the past year can be traced back to credit default swaps, which ballooned into a $62 trillion market before ratcheting down to $55 trillion last week—nearly four times the value of all stocks traded on the New York Stock Exchange. Since credit default swaps are privately negotiated contracts between two parties and aren't regulated by the government, there's no central reporting mechanism to determine their value. They've proliferated around the world and now lie hiding, waiting to blow up the balance sheets of countless other financial institutions."
How did Fannie and Freddy cause this to affect you and I? Answer, they didn't. CDS's are to blame.
Bump to Mozart (in case you missed it)
Ah, ...no.
Credit default swaps (CDS's) are only an instrument reflecting changes in risk and are not the cause of the underlying liquidity problems. The use of CDS's is a logical means by which financial entities reduce the risk of their asset portfolio's. There's nothing wrong with that. That's how capitalism is suppose to work. CDS's are credit derivative contracts between two parties attempting to reduce risk. Yup, AIG was indeed involved in selling trillions of dollars worth of CDS's on the open market. Most of the large payouts concerning purchases of CDS's were all settled by the end of 2008. AIG's problem was not with the CDS's, but their failure to hedge against the possibility that the refereneced entities might decline in value. AIG screwed-up. The default rate on CDS's is only, on average, .2% per year.
Also in September American International Group (AIG) required a federal bailout because it had been excessively selling CDS protection without hedging against the possibility that the reference entities might decline in value, which exposed the insurance giant to potential losses over $100 Billion. The CDS on Lehman were settled smoothly, as was largely the case for the other 11 credit events occurring in 2008 which triggered payouts.
But, ...but, what exactly caused the "referenced entities to decline in value?" Why was AIG in a panic? Very simple. The US government renigged on their support of Fannie Mae and Freddie Mac. Suddenly those low risk asset portfolios became 'high' risk. This, ..this! ...increased the risk of mortgage asset portfolios around the world. The government interfered in the normal functioning of the market place and, as a result, confused the market place as to what would normally be considered 'risky' and what would not. "Hey! ...they're government backed. Why should I worry?" Mae and Mac bought-up way too many risky mortgage assets, on instructions from the Democrats on Capital Hill, and it eventually crashed like a house of cards.
robertr2000 wrote: robertr2000 wrote: The Engine wrote: robertr2000 wrote: Thanks Mozart, I know about Fannie and Freddy. But how did Fannie and Freddy (or Obama) bring down AIG? Or Iceland for that matter?
I think Fanny and Freddy were a big part of it for sure but without CDS's, none of this would have happened. Or it would have happened but only to the sub-prime's of the world.
see Newsweek article: http://www.newsweek.com/id/161199
Sep 27, 2008 - "So much of what's gone wrong with the financial system in the past year can be traced back to credit default swaps, which ballooned into a $62 trillion market before ratcheting down to $55 trillion last week—nearly four times the value of all stocks traded on the New York Stock Exchange. Since credit default swaps are privately negotiated contracts between two parties and aren't regulated by the government, there's no central reporting mechanism to determine their value. They've proliferated around the world and now lie hiding, waiting to blow up the balance sheets of countless other financial institutions."
How did Fannie and Freddy cause this to affect you and I? Answer, they didn't. CDS's are to blame.
Some day, I hope all the people responsible for this mess are brought to justice. And, I dont care what party they're in. Someone needs to go to jail.
Yup
What Does Structured Investment Vehicle - SIV Mean?
A pool of investment assets that attempts to profit from credit spreads between short-term debt and long-term structured finance products such as asset-backed securities (ABS). Funding for SIVs comes from the issuance of commercial paper that is continuously renewed or rolled over; the proceeds are then invested in longer maturity assets that have less liquidity but pay higher yields. The SIV earns profits on the spread between incoming cash flows (principal and interest payments on ABS) and the high-rated commercial paper that it issues. SIVs often employ great amounts of leverage to generate returns.
They need the CEO's for Fanny Mae, Freddy Mac, as well as several politicians (Barney Frank, etc.) sitting right next to that guy on the hot seat.
Why hasn't an independent prosecutor been appointed to make heads roll for the financial crisis? Maybe because the party in charge knows that some of their member's heads would be rolling?
WA Mozart wrote: robertr2000 wrote: robertr2000 wrote: Thanks Mozart, I know about Fannie and Freddy. But how did Fannie and Freddy (or Obama) bring down AIG? Or Iceland for that matter?
I think Fanny and Freddy were a big part of it for sure but without CDS's, none of this would have happened. Or it would have happened but only to the sub-prime's of the world.
see Newsweek article: http://www.newsweek.com/id/161199
Sep 27, 2008 - "So much of what's gone wrong with the financial system in the past year can be traced back to credit default swaps, which ballooned into a $62 trillion market before ratcheting down to $55 trillion last week—nearly four times the value of all stocks traded on the New York Stock Exchange. Since credit default swaps are privately negotiated contracts between two parties and aren't regulated by the government, there's no central reporting mechanism to determine their value. They've proliferated around the world and now lie hiding, waiting to blow up the balance sheets of countless other financial institutions."
How did Fannie and Freddy cause this to affect you and I? Answer, they didn't. CDS's are to blame.
Bump to Mozart (in case you missed it)
Ah, ...no.
Credit default swaps (CDS's) are only an instrument reflecting changes in risk and are not the cause of the underlying liquidity problems. The use of CDS's is a logical means by which financial entities reduce the risk of their asset portfolio's. There's nothing wrong with that. That's how capitalism is suppose to work. CDS's are credit derivative contracts between two parties attempting to reduce risk. Yup, AIG was indeed involved in selling trillions of dollars worth of CDS's on the open market. Most of the large payouts concerning purchases of CDS's were all settled by the end of 2008. AIG's problem was not with the CDS's, but their failure to hedge against the possibility that the refereneced entities might decline in value. AIG screwed-up. The default rate on CDS's is only, on average, .2% per year.
Also in September American International Group (AIG) required a federal bailout because it had been excessively selling CDS protection without hedging against the possibility that the reference entities might decline in value, which exposed the insurance giant to potential losses over $100 Billion. The CDS on Lehman were settled smoothly, as was largely the case for the other 11 credit events occurring in 2008 which triggered payouts.
But, ...but, what exactly caused the "referenced entities to decline in value?" Why was AIG in a panic? Very simple. The US government renigged on their support of Fannie Mae and Freddie Mac. Suddenly those low risk asset portfolios became 'high' risk. This, ..this! ...increased the risk of mortgage asset portfolios around the world. The government interfered in the normal functioning of the market place and, as a result, confused the market place as to what would normally be considered 'risky' and what would not. "Hey! ...they're government backed. Why should I worry?" Mae and Mac bought-up way too many risky mortgage assets, on instructions from the Democrats on Capital Hill, and it eventually crashed like a house of cards.
Mozart
"AIG screwed-up. "
exactly! What about....... Iceland?
And this all stinks to massive conspiracy. To crash the dollar and the world financial system for......? You guessed it. One world currency (i'll stop there)
When it happens (and it is), you'll still deny it and blame the Democrats (and you be partially correct)
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Subject=Bloomberg%20news:%20%20Gold Advances to Record in New York, London After Jobs Data &body=%20Gold Advances to Record in New York, London After Jobs Data %0D%0A%0D%0A%20http%3A//www.bloomberg.com/apps/news%3Fpid%3Demail_en%26sid%3DagxkVzO58K1A]Email[/url] | 
:S:d1]Christoph Eibl[/url], co-founder of Zug, Switzerland- based Tiberius Group, which manages $1.8 billion. “I see more liquidity pumped in to lift the economies from bad news.” 
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