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Gold/Mining/Energy : Gold Price Monitor
GDXJ 96.88+0.9%Nov 18 4:00 PM EST
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To: d:oug who wrote (45478)12/2/1999 9:34:00 AM
From: Ken Benes  Read Replies (2) of 116762
 
Doug:

Your note succintly states what has happened. Even Barrick the most sophisticated hedged of the producers were no match for the rocket scientists at the brokerages and banks that created the instruments. Actually, the biggest joke, the synthetic positions sold to the producers is not that dynamic of an instrument. Even small investors have been using proceeds of one option to purchase the opposing option for years. It can work beautifully in a market that is moving with the synthetic position. Unfortunately, when the market goes against the position there is a naked option bomb laying out there. Apparently this is what happened to the producers. It is hard to believe that producers could have entered into these positions with gold approaching ten year lows. Go figure, but then again you have to watch the head guys at the mining companies when someone puts a shovel in their hand, they will dig more holes than the owner of a peteck labeler can stick labels onto things. Finding more gold and collateralizing central bank sales with the additional reserves, what a bunch of fools. Double D was cut from the mold and read his babble that says nothing more than the miners have prospered with hedging. Correction the managers have.

Ken
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