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Gold/Mining/Energy : Samex Mining | OTC:BB - SMXMF | Canada - V.SXG

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Sep 10 5:00 PM EST

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To: Mozingo who wrote (409)	2/7/2000 12:01:00 PM
From: Travbfree	Read Replies (1) of 539

THE YEAR OF THE GOLDEN DRAGON By Bill "Midas" Murphy www.LeMetropoleCafe.com February 4, 2000 Spot Gold $310, up $23 Spot Silver $5.56, up 32 cents Friday's Action There is no point in reiterating in detail what set up the fireworks in Friday's gold market, as it is covered in the Feb. 3 Midas commentary. Suffice it to say that Murphy's Law made its way onto the financial scene in typical fashion for the big gold shorts. That is, everything that could go wrong for them is doing so at the worst possible time. Rumors continue to circulate that Hannibal Lecter (Goldman Sachs) and one of the other Hannibal Cannibals (Deutsche Bank) have suffered massive trading losses as a result of the sudden and sharp yield curve inversion and swift move up in the bond market. It has hurt financial institutions that were "long" the short end of the curve and "short" the long end -- or the 30-year Treasury bonds. It also hurt financial institutions that were short Treasuries as a part of routine hedging practices. A Cafe member who is a European bond dealer tells us: "Persistent rumors are flowing in that three players are caught in playing mortgages against the govvies in the 30 years in U.S. dollars with a probable loss of 2 billion USD." Another plugged-in Cafe member told me Friday morning that he knows for a fact that a UBS asset-backed mortgage package went under water to the tune of 5 or 6 points. Massive losses have been incurred. If it happened to UBS, it happened to many banking firms, according to our connected Cafe member. Simply put, UBS put together a package of mortgages by buying them with the intention of selling the package. To hedge its interest rate risk, UBS sold 30-year Treasuries. When the Treasuries soared unexpectedly in price before the mortgage package was sold, the hedge went under water. (Article continued on post #411)

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