Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: michael r potter who wrote (39094)	2/4/2000 12:06:00 PM
From: michael r potter	Respond to of 99985

With the massive rally in the 30 year vs. short dated TSYs, and the inversion in the last two weeks, rumors of large losses on trading desks or hedge funds [the leverage ala. LTCM still exists] are almost certainly true. Is it bad enough for the Fed. to be involved behind the scenes or soon to be? Very possible. We won't know for a while, but this situation might also be part of reason for golds recent resurgence. thanks, Mike PS,OT- Within 4 hours of the top in T-bond yields, I called my broker where I have an IRA proposing to sell a long term stock and put everything into 25-30 year tsy.zeros. The top broker was in the room, and my broker chuckled, I asked why? He said the top broker [won't name him] was insisting in the background "to early, to early". This at a time when bullish consensus on the long bond was 15%!!!. Needless to say, 30 year zeros have ripped the cover off the ball in the intervening 13 trading days. I used to work as a broker at that office-Nothing changes. 15% bullish consensus??? In no other profession would such incompetence be tolerated.

To: michael r potter who wrote (39094)	2/6/2000 3:39:00 PM
From: pater tenebrarum	Read Replies (2) \| Respond to of 99985

Mike, re: non-US gold stocks, note that i follow only the South Africans...i have no inkling about the Australian miners. re: GOLD, the earnings report was not GOOD - it was absolutely STELLAR (earnings increased 10-fold). here are the other SA miners i like: HGMCY, DROOY, AU, RANGY. all of them still buys imo...especially if the PoG pulls back a bit from Friday's rally, might be an opportunity to pick some of those up. note that HGMCY and DROOY are the co's with the highest gearing to PoG changes. to give you an example: at a PoG of 260, HGMCY earns 60 million Rand. at 320 (23% higher) it earns 180 million Rand (+200%). the stock price responds accordingly to changes in the gold price. btw., i expect more producers to come forward to announce suspension of hedging programmes. if that expectation turns out to be correct, the PoG will fly. thus you should make sure that you know where the gold co's you invest in stand w/regards to their hedge books. several producers may go out of business if gold rallies further (imagine that! LOL!). likewise i expect a few high-profile bankruptcies among the bullion banks and hedge funds engaged in the gold carry trade. note: Friday's rally in the PoG may yet be retraced...but the violence of the rally is indicative of the parlous state many participants in the gold market find themselves in. the annual supply/demand deficit is at 1,500 tons (newly mined production vs. demand). 400 tons will be supplied by Euro-zone CB's. that's about all that will be forthcoming from the CB's. scrap will add another 600 tons. the remainder of the deficit would have to be covered by investment dishoarding. however, i expect investment demand to INCREASE in the course of this year. thus we could be facing a 1,000 ton gap in 2000 alone. soon the shorts may be faced with the possibility that gold will meander towards it's equilibrium price...which could be as high as $650/oz. regards, hb