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Tao Jaxx

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  • Reuters Omits The Grey Areas About China Gold Demand [View article]
    Enjoy! :)
    http://on.ft.com/1hXvt0X
    Apr 19 09:57 AM | Likes Like |Link to Comment
  • Does China Really Have 1,000 Tons Of Gold Locked Up In Shadow Financing Deals? [View article]
    Let’s go ahead and “do some critical thinking” around your arguments:

    1) Few facts and a lot of guesswork: That applies to any conclusion on the issue, as indeed there is no clear-cut data from China. That in fact applies to all Chinese statistics in general: it takes two weeks to come up with a GDP number in a country of 10mn sq.km and 1.3Bn people and that number is right on target of what the Politburo decided a year ago… It explains well that whereas China alone reportedly “imported” half of the yearly production in 2013, the price of gold fell of a cliff that year. Furthermore, there’s ample documentation on the structure of the deals if not their volume. See Izzy Kaminska’s article in FT Alphaville: http://on.ft.com/1hXvt0X

    2) Commodity Financing Requires Stable Assets: The deals are structured around physical imports hedged on the future market, hence ZERO NET demand and insensitivity to price changes. When the underlying is hedged, price volatility is irrelevant.

    Surge in imports after the price crash: Indeed, to roll over a given deal at maturity, if the price of the underlying has gone down, you need more quantity of the stuff. That is perfectly in line with what has been observed.

    3) Good Collateral is Not Bought at a Premium: Collateralized gold was IMPORTED gold, so not bought at a premium, but at international prices. Furthermore, in a commodity financing deal, the haircut easily takes care of this if needed. Which in this case it is not.

    I’m amused at the length to which gold marketers will go to ensure a steady flow of suckers keeps gobbling up the shiny rock…
    Apr 19 09:49 AM | Likes Like |Link to Comment
  • Reuters Omits The Grey Areas About China Gold Demand [View article]
    Yet another gold bullish argument (China buying hand over fist!) pitifully deflating. All those Chinese imports from Hong Kong heralded monthly by the goldistas were offset by futures sales unreported in the Balance of Payments with ZERO net impact on gold demand but a nice arbitrage between onshore and offshore RMB.
    Even the WGC (an association of producers, not a neutral market observer) finally had to admit it.
    We had India buying (went missing), emerging central banks buying (ultimate contrarian indicators:they loaded up at the top), Chinese consumers rioting for shiny trinkets (disappeared as we dropped below $1,500), then we had China buying 1,000 tons. Ooops, they were buying zilch on a net basis.
    How else would one explain prices dropping off a cliff in 2013 if China alone bought 1,000 tons, so half of the yearly production?
    What now to have suckers buy gold? Putin invading Crimea? Happened already. GLD went from 133 to 125.
    Apr 16 11:16 PM | 1 Like Like |Link to Comment
  • Chinese February Gold Imports Show Strong Chinese Demand: What Chinese Credit Crunch? [View article]
    http://bit.ly/1htajpu
    Mar 31 05:12 PM | Likes Like |Link to Comment
  • Chinese February Gold Imports Show Strong Chinese Demand: What Chinese Credit Crunch? [View article]
    Never touched "DUST". Never will.
    Check out GC. Not a stock symbol though.
    Mar 29 08:01 PM | Likes Like |Link to Comment
  • Chinese February Gold Imports Show Strong Chinese Demand: What Chinese Credit Crunch? [View article]
    "Are you investing accordingly ?"
    I do.
    "You're a brave man."
    Not sure about that one.

    TJ
    Mar 29 05:57 PM | Likes Like |Link to Comment
  • Chinese February Gold Imports Show Strong Chinese Demand: What Chinese Credit Crunch? [View article]
    I think Mr.Market will get the metal back to its 2008 level ($800), possibly lower as he has this thing of over/undershooting constantly.
    When will that happen I don't know. But it will.
    At $800, gold would still enjoy a rich valuation compared to its inflation adjusted value since we left the gold standard, which would be somewhere around $400.
    Production cost is a non issue: yearly production (2500 Tons) is tiny compared to accumulated gold held as investment (conservatively 50 to 60% of existing stocks -170,000 tons-which keep piling up, as gold is never consumed). When the fear trade deflates, this investment gold shows up on the market and overwhelms the price impact of producers.
    Plus, producers are fixed costs guys and will keep digging the stuff out anyway to (at least partially) cover those fixed costs.
    Just my $0.02
    TJ
    Mar 29 10:18 AM | 1 Like Like |Link to Comment
  • Chinese February Gold Imports Show Strong Chinese Demand: What Chinese Credit Crunch? [View article]
    "these depressed price levels"?
    $1,500 looked like "these depressed price levels" some time back. Not anymore.
    Same will happen to the $1,300 as well, if you ask me
    TJ
    :)
    Mar 28 06:26 PM | Likes Like |Link to Comment
  • Chinese February Gold Imports Show Strong Chinese Demand: What Chinese Credit Crunch? [View article]
    Hi filipo, long time no see.
    The jewelry industry does not hold unhedged gold (or silver) inventory. They borrow the metal or run a short gold future position to offset their physical holdings. They make money processing the metal, not owning it, otherwise they'd go bankrupt several times over the PM price swings.
    Only holder is the final consumer, who is a price taker with limited or no pricing power, and is quite happy with low gold/silver prices that make shiny trinkets more affordable.
    Mar 28 09:35 AM | Likes Like |Link to Comment
  • Chinese February Gold Imports Show Strong Chinese Demand: What Chinese Credit Crunch? [View article]
    That's one funny article: after explaining in great detail why Chinese soaring gold imports had zero impact on gold prices (namely because, as part of a purely financing deal, they were matched by equivalent sales on the futures market), it concludes that Chinese physical gold sales due to the unwinding of said financing deals will send prices higher…
    If it did nothing on the way in, it'll do nothing on the way out, duh.
    If anything, as Goldman mentions, physical trades have a stronger impact on prices than futures trades, as the physical market is tiny compared to futures. So the stronger upward impact happened on the way in (China buying physical and selling futures) and the stronger downward impact is upcoming (China selling physical and buying back futures).
    But then again, ZeroEdge is in the gold pumping business so why let logic get in the way of preconceived ideas? Average ZH reader probably fell asleep two lines into the financing deal description anyway, so why bother lol?
    Mar 27 07:40 PM | 1 Like Like |Link to Comment
  • Las Vegas Sands: Focus On Macao And Premium Valuation Remain Concerns [View article]
    2.6% yield in a 0% interest rate environment, though. Tells you something, doesn't it? Unless you think China is about to fall out of bed (which it might) or the crackdown on corruption money is serious (which I don't think it is), I'd be a buyer.
    You may or may not like Old Sheldon, but no one thing he sure he ain't is dumb.
    Jan 31 02:23 PM | Likes Like |Link to Comment
  • Precious metals slump as stocks rally and QE nears end [View news story]
    Not only is the Fed balance sheet not shrinking. It is increasing by $65Bn a month, which means more than 8% a month of its pre QE size ($800Bn). Still short GC if that was your question, yes.
    Jan 31 01:30 PM | Likes Like |Link to Comment
  • Precious metals slump as stocks rally and QE nears end [View news story]
    "they still reinvest coupons"
    Never did, never will. Check your basic facts. They pay these as dividends to Uncle Sam.
    What they do reinvest is the proceeds of maturing securities, otherwise their holdings would shrink.
    They will stop reinvesting maturing proceeds when they will be exiting QE, which will be the real "taper" of the stock of holdings, as opposed to the taper of the accumulating flow happening now.
    Jan 31 12:58 AM | Likes Like |Link to Comment
  • The Emerging Markets And Fed Tapering [View article]
    Are EM woes taper-related? That's today's narrative but I'm not sure: term spreads are contracting, not rising as they did back in May when taper-tantrum raged.
    This is more like a repricing of EM over inflated expectations. Big difference.
    Why would LT Treasuries rise if that was taper-related?
    Jan 27 11:06 PM | Likes Like |Link to Comment
  • John Hussman: Superstition Ain't The Way [View article]
    “We currently estimate a negative prospective total return for the S&P 500 on all horizons of less than 7 years,”
    Yep, you’ve been quasi consistently doing this for the last 10 years, year in year out.

    “valuation methods that – in real time – correctly warned of negative 10-year returns in 2000, defended us against the bulk of the 2007-2009 collapse, and estimated positive 10-year prospective returns in the 10-14% range in early 2009 (our stress-testing response at the time was emphatically not driven by valuation concerns).”
    Yep, perma-bearishness correctly forecasts ALL market downturns, no exception.
    And when data-mining does not forecast downturns, perma bears’ response is “not driven by valuation concerns”.

    Not to mention: “our existing methods had performed admirably”

    “don’t imagine that there is actually a mechanistic cause-and-effect relationship that links QE to stock prices.” At least we agree on something.

    “With the Fed now leveraged 74 times against its stated capital,”
    Oops, there we go again. The Fed’s capital has nothing to do with the accounting entry. Its capital is the present value of all future US dollar seignorage, and believe me, that’s a lot of money. Plus, it’s leveraged on liabilities it creates. Nothing beats that, I’m telling you.
    Jan 21 09:59 AM | 2 Likes Like |Link to Comment
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