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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (11768)	9/17/2008 8:35:00 PM
From: paul ross	Read Replies (1) \| Respond to of 50101

Yella' dog still running... quotes.ino.com

To: maceng2 who wrote (11768)	9/17/2008 11:58:38 PM
From: Proud Deplorable	Respond to of 50101

Black is Black and Gold is Gold, Again September 17th, 2008 Today gold had its best day ever as the know-it-alls have finally started to come to their senses: there is no safety in paper of any kind. As a result, gold is up $110 for the day with the rocket continuing to climb in the Asian session. Although it didn’t make the big headlines, silver actually outperformed gold on a percentage basis, climbing a mind-numbing 18% over the course of the day to tack $2 unto its massacre low from last week. What happened? Everything came together in a perfect storm. I could probably rattle off 10 major developments and pieces of news that were bullish for the monetary metals, starting of course with the AIG bailout/axing announced last night. The AIG debacle lit the fuse and some of those powder kegs I was talking about yesterday actually blew up on the way to the wooden hut. Alas, we have been very busy preparing for The Metal Augmentor launching in the next few weeks and haven’t been able to pay as much attention to the daily market machinations as we would have liked. As a result, we never did get much of a chance to assess the full import of the sudden drop in the gold basis over the past several days. It was clearly telling us that something was afoot, and now we know what it was. It appears that some early quiet buying of gold was taking place behind the scenes. By whom? I would guess the buyers were people who knew what could happen when the next financial institution dominoes were to fall. Let me just say here that in my personal opinion, the kind of rally that occurred today would not have been possible without a significant amount of short covering. This is precisely the type of situation I laid out a few weeks ago when I noted that short covering after such a steep fall as silver has had could result in a very quick $3-4 added back to its price. And while some will call today’s market action prima facie evidence that “naked” shorts were forced to flee, especially given the reputation that AIG has as a commercial short, I think it is entirely possible that AIG’s counterparties, as well as counterparties to other large commodities dealers, decided to pull out of over-the-counter derivatives en masse. They would have done this for the same reason I stated yesterday that commodity ETNs could pose and have posed a liquidation problem: falling confidence that the dealer will be able to perform under the contract. As AIG and the others had their long positions in the over-the-counter market stripped away, they were forced to buy back short positions on the futures markets. I wish I could write more as today deserves a novel, but I am preparing to leave for the Silver Summit. It is not likely that I will be posting very much for the next couple of days unless something extremely critical comes up, but I will try to catch up over the weekend. I will, however, be posting an excellent analysis by Don Hanson of the Silver Mining Shares before I leave, so please keep a lookout for that. In the meantime, please use the comments section to continue the thought-provoking discussions! silveraxis.com