From Le Metropole Cafe, cold hard talk of a decomposing global economy.
lemetropolecafe.com
The James Joyce Table
Discussion du Jour:
Gold, Commodities, Midas du Metropole
... GATA's investigation has lead us to believe that the "illegal"
manipulation of the markets extends beyond the gold market and we now
can understand why the stock market has gone on like it has for so long
with so few corrections of no more than 10%...
... South Korea's ailing Daewoo Group got an emergency infusion
of $3.31 billion of credit on Monday, as the IMF sought to calm ...
So now the IMF is bailing out private corporations in Korea,
just like the N.Y. Fed organized the LTCM bailout...
... Market concerns over Argentina debt's problems have barely subsided
and now a Korean bailout. There is much talk of hedge fund troubles...
... speculates that recent weakness in the $U.S. may reflect hedge
fund(s) in serious trouble. He believes that some hedge funds were
caught by the allure of the cheap interest carry trade (especially yen),
and may now be trying to unwind short positions...
... and points out the rise in the euro must be due to an extent to
a hedge fund trying to close out a short position ... foreign CB's
and other foreign holders are aggressively dumping US Treasuries ...
... he points out that capital is leaving the US, and Japan is
growing. He expresses great concern that a simultaneous rise in the yen
and the euro may reflect a lack of confidence in the US, which with all
the dollars held overseas is very worrisome for the US...
... and it is likely the yuan will be devalued, apparently partly
due to China no longer being inclined to placate the US.
... received more feedback that there was an emergency meeting in
June about the "Tiger" hedge fund and that they were bailed out too...
... the banking meeting in Philadelphia that we mentioned to you
in which participants were sworn to secrecy.
... today there were specific rumors floating around about Nevis, an
offshore hedge fund in Bermuda, that might be in trouble.
The smoke is becoming very thick. Are volcanic fires right around the
corner? If so, what will Alan Greenspan do this time-lower interest
rates 3 times like he did last Fall? I thought the market is concerned
at the moment about him raising rates? That is what his Humphrey-Hawkins
testimony was all about. Bottom line: he is in a box.
The dollar has been hit hard lately. First, it fell sharply against the
yen in spite of tremendous official sector intervention. Now, it is
starting to fade against the euro. What will happen if Greenspan lowers
rates? The dollar is being hit hard and the market thinks he is going to
raise rates. What will the dollar do if he is forced to lower them?
So, if a crisis does develop, and Greenspan is forced to lowers rates,
it is unlikely that the markets will take to that very kindly, for if
the Fed is pondering raising rates now to head off coming inflation, a
lowering of rates will insure hefty inflation numbers are on the way. If
markets collapse for some reason and the lowering of rates does not
work, then that will be a reason for real concern or "panic".
... Billionaires went back to driving cabs.
We got to talking about Amazon.bomb ... told me that they have $1.5
billion in convertible debt and $1.1 billion in cash that they are
burning up at the rate of $350 million per month. They also have
invested $350 million in new business' that are losing money. Meanwhile,
their basic book business is facing increased competition and is being
undercut price wise as other on-line book sellers gain market share.
... analyzed the company ... the stock, which has been hit hard recently
... been priced in the hundreds, could ... be fairly priced at 4 !.
If Amazon.bomb goes to 4, what do you think many of the internet stocks
will disappear to? Now throw in a general market panic and we have a
nightmare on our hands. All because Alan Greenspan let this "bubble" get
out of hand. And all because they fostering the illusion that making
money in the stock market was a birth right and risk a thing of the past.
... either is very bullish for gold because either there will be a
complete loss of faith in equity investing or the demand for gold
will overpower the gold shorts as inflation returns with a vengeance.
... some big players know that the price of gold is way too low, and
they probably know that the price has been orchestrated down here. They
also know that the collusion game could blow up at any time and the
price of gold could rally hundreds of dollars when that happens- and it
could occur virtually overnight...
"The Swiss electorate voted not long ago, NOT to sell gold but to permit
the govt to sell gold when/if the choose to do so. The press reported
this with its usual goldphobic twist-spin as a vote to sell gold. It was
not. The govt is happy to have the power to sell gold. BUT they do not,
repeat not, have ANY plans to sell any. Nor have they voiced any
INTENTION to sell...
... a day not that far off, they will be out of plans so plan to ...
Bill Murphy ( Midas )
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