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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: yard_man who wrote (32967)11/1/2000 3:06:08 PM
From: pater tenebrarum  Read Replies (1) of 436258
 
i think you underestimate the hubris of the parties concerned. they believe a) that they fully control the market and b) that the CB's and tax payers will bail them out if need be.

call options are useless in a discontinuous market event...IF the market is really manipulated, and the short position as huge as is assumed (i think we can be fairly confident that the leasing scam short position is in the 10,000 tons area, likely MORE), then the counterparties to those calls will simply default.

in fact, last year's rally on the Washington agreement was PROOF that this market is a lopsided bearish bubble, with leveraged short positions piled on far in excess of production...

while we're at it, how come that the big bullion banks gold derivatives positions EXPLODED after last year's rally? how come that totally obscure CB's are enticed into leasing/selling their gold? who is buying it and why?

and then ask yourself how two producers (one big, one mid tier) could go insolvent on a $84 rally in gold?

it all shows the perverse state of this market...just wait for a rally to get going...the Ozzie producers will be the first to drop like flies. and they'll likely take a few bankers down with them...
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