“On April 25, half a dozen officials from the CME Group, which runs many of the nation’s commodities exchanges, met via videophone to discuss the eye-popping rise in the price of silver, which had doubled in just six months to about $47 a troy ounce.
Worried about the speculative run-up and the increased volatility of the silver market, the officials concluded that it was time to raise the amount of money that buyers and sellers had to put down as collateral to guarantee their trades. The first increase in so-called margin requirements took hold the next day, effectively making it more expensive for speculators and other kinds of traders to play in the market”. (NYT)
Another explanation why Silver should go higher, and why it is manipulated. Thetrader wrote some weeks ago, that Silver was forming a way too parabolic move, and had to correct big time. After having reached 100 day moving average at around 35 Usd, we expect a bounce to max 40 Usd. After that, let’s see what the chart will tell us.
“When the futures curve shape is nothing like a normal curve, it can only mean that money rates are no longer the primary consideration in setting various term levels. Something else has to be driving the curve or it would result in a money-driven shape. The current futures curve is in contango until December 2011, with a light backwardation from then until May 2012, then almost $1 of backwardation out to December 2015. This hybrid curve, in my opinion, is the most powerful evidence that there is a shortage in physical silver. This is not a curve driven by money rates.”
Over the last two weeks silver has fallen from just under $50 to under $40, following a meteoric rise. Much of the fall has been engineered by the big commercial dealers triggering stop-losses, giving them easy profits. They have been extremely effective in achieving this objective, picking times when mainstream markets were shut for public holidays. The result is that bullish speculators are now full of doubt having learned an expensive lesson about price manipulation.
Earlier reports/rumours of Iraq cutting it’s oil capacity seem so far nonsense according to Deputy Prime Minister for energy Hussain al-Shahristani said on Sunday. Some longs might have wished for something else.
“Another round of Strategic and Economic Dialogue will be held May 9-10 between the United States and China. The meeting is significant because the two sides will launch a new “strategic security” track of dialogue. Despite the ongoing thaw, Sino-U.S. relations face major challenges and will likely head in a more turbulent direction with the approach of the 2012 U.S. elections and the Chinese leadership transition.
While the U.S-Chinese relationship is in the midst of a thaw of sorts, the subsurface suggests far more disruptive trends. The United States is nearing the end of a decade-long obsession with jihadist war, is nearing a contentious election season and is becoming increasingly aware of greater competition from China’s economic growth and rising naval capabilities. China is transforming its entire economic model, raising the risks of an Asian-style collapse that coincides with a generational change to a new set of leaders who face a complex array of social problems and demands for political reform to match economic liberalization. This is not a recipe for thriving U.S.-China relations.”
Read more: U.S., China to Hold Strategic and Economic Dialogue | STRATFOR
We talk of Greece leaving euro, but what if Germany left Euro? Below some thoughts by Stratfor.
Scenario 1: Germany Reinstitutes the Deutschmark
Scenario 2: Greece Leaves the Euro
Europe therefore finds itself being tied in a Gordian knot. On one hand, the Continent’s geography presents a number of incongruities that cannot be overcome without a Herculean (and politically unpalatable) effort on the part of Southern Europe and (equally unpopular) accommodation on the part of Northern Europe. On the other hand, the cost of exit from the eurozone — particularly at a time of global financial calamity, when the move would be in danger of precipitating an even greater crisis — is daunting to say the least.
The resulting conundrum is one in which reconstitution of the eurozone may make sense at some point down the line. But the interlinked web of economic, political, legal and institutional relationships makes this nearly impossible. The cost of exit is prohibitively high, regardless of whether it makes sense.
Give me a helping hand, and another one, and another one….Greece doesn’t want to restructure it’s debt, nor exit the EU. Greece seems to want more help, as it is totally locked out of the capital markets. Ok, let’s save Greece once again, but then Ireland wants more, and what will happen to Portugal, Spain etc? Eurozone is facing a new dilemma. If Greece is to be saved, they will need more bail outs, and it will take many years before the country is back on track.
“The 110-billion-euro ($157 billion) rescue of Greece, agreed in May last year, and the 85-billion-euro scheme for Ireland, put together in November, were meant to be the cornerstones of the euro zone’s response to its sovereign debt crisis.
The fact that both may now be revised, in Greece’s case perhaps radically, underlines how they so far have failed to convince markets that the problems are in hand, and suggests Europe may be on the hook to supply fresh aid for years to come.
Irish Minister for Energy Pat Rabbitte told state broadcaster RTE on Sunday he would like to see a rescheduling of the emergency loans extended to Ireland under the bailout by the European Union and the International Monetary Fund.
“Quite frankly the (interest) rate on Ireland must be reduced and in my own view the debt must also be rescheduled but that’s another issue,” Rabbitte said.” (Reuters)
“The Post once again showed why it is known as “Fox on 15th Street,” running an editorial with the subhead, “tackling the spector of structural unemployment,” which essentially offers nothing to address the problem.
The piece got off to a bad start early, telling readers:
“The unemployment rate remains stuck at 9 percent of the workforce, up from 8.8 percent in March. But, good news: The higher rate reflects job-seekers reentering the market because their prospects are better.”
Actually, this is not the reason that the unemployment rate increased to 9.0 percent. The Labor Department’s household survey showed a 205,000 increase in the number of people categorized as unemployed and a drop of 190,000 in the number of people reported as working. So, almost the whole change from March to April is explained by people going from being employed to unemployed, not new entrants to the labor market. This change is likely just a statistical quirk — it is not statistically significant — but the Post’s assertion is simply wrong as anyone can see who looked at the numbers for a second.” (cepr)
Hundreds of thousands of buy and sell orders in nanoseconds. We have asked ourselves, why nobody has reacted to this before. Yes, we know the lobby organizations are pressing hard for HFT Algo legitimacy, but all these billions of orders never leading to one single trade, are not providing liquidity. They are just quote stuffing strategies, in order to slow the system, so the predators can survive. The biggest problem in this HFT world, is the fact the banks have deployed billions in order to design the systems, and nobody wants those investments dead, especially as they are very profitable.
“Securities and Exchange Commission Chairman Mary Schapirogave the strongest signal yet that she plans to increase scrutiny of high-frequency traders blamed for exacerbating the May 6, 2010, stock market crash.
The SEC is considering whether to impose trading obligations on the firms, which can submit hundreds or thousands of orders every second and typically don’t hold positions overnight, Schapiro said in Washington yesterday. A reassessment of the “entire regulatory structure” surrounding the firms is needed, in part to determine whether the algorithms or strategies used to generate and send orders are “programmed to operate properly in stressed market conditions,” she said. (Bloomberg)