Skip to comments.STOCKS MAKE HALFHEARTED REBOUND, GOLD TANKS: Here's What You Need To Know
Posted on 09/23/2011 2:10:22 PM PDT by blam
STOCKS MAKE HALFHEARTED REBOUND, GOLD TANKS: Here's What You Need To Know
Sep. 23, 2011, 4:00 PM
After a turbulent week of trading, 'flat' was the new 'up' on a relatively quiet day for news.
But first, here's the scoreboard:
S&P 500: +27.6
And now the top stories:
* Last night's Asian market selloff, led by the 5.7% plunge in the Kospi, set the stage for another global market sell off.
* US markets were indicated to open sharply lower as new worries of a Greek debt default freaked out the European stock markets again, which also caused US futures to tumble.
* The G20 pledged to help avert an all out European debt crisis in an unscheduled statement. But that went in one ear and out the other.
* The risk-off trade was kicked into high gear as the dollar gained and the 10-year Treasury note briefly saw a 1.6% handle.
* However, the early sell-off in US stocks quickly evaporated in early trading and stocks oscillated near 0 for most of the day. European markets closed with modest gains.
* Bank stocks were an area of strength today led by Morgan Stanley. Fox's Charlie Gasparino reported that Morgan CEO James Gorman "ordered his traders to buy the firms own debt in the market to underscore the firms financial strength." Morgan Stanley closed up by around 5%.
* Precious metals on the other hand got absolutely obliterated. Gold plunged by 6%. Silver got absolutely destroyed, falling 16%.
* Markets seemed to gain some confidence after Bloomberg reported that European authorities may be accelerating a permanent European bail out fund.
(Excerpt) Read more at businessinsider.com ...
Dow closed up 37.65
Gold’s down by 99.60????
You know, the markets make so little sense, that there just HAS to be something going on that we just don’t see. I am not buying the electronic instantaneous response or robotic calls and puts altering the system. I wonder if there is a force driving the markets into roller coasters intentionally, not necessarily to political ends, but just plain disruption and mayhem. A world collapse of the monetary scheme would sure centralize banks and banking...we could all become instant serfs again, not so much politically as from a financial aspect...freedom itself..
After a two day 715 point drop...that doesn’t even qualify as a “dead cat bounce”.
Blood was in the silver market streets today so I waded in and added to my collection. Fire sale prices today baby!
I know there are a lot of “gold bugs” on FR but I can’t get beyond the fact that it really has little intrinsic value. Oh, I guess you could cast bullets out of it if push came to shove but lead is selling at some $0.88. In an armageddon type situation, large cashes of gold wouldn’t help an individual much other than get them killed by a group deluded into thinking gold actually has value. Plus, it doesn’t taste or digest well.
I’m not so sure of that. There are some analysts who think silver is headed down to the low 20’s, or even the teens.
I took the plunge into silver today. I hope it doesn’t go back to $17.
It might be a lot simpler than that. People were expecting the Fed to announce more monetary stimulus. QE3 if you will. More printing = inflation = rising pricing. The markets have been expecting the Fed to announce QE# for a while now, and partially why the markets tanked Thursday was because of the Fed announcement Wednesday. The more people are sure the Fed will not do a QE3 the less need for inflation hedge like Gold and Silver, and of course the less likely the markets are to be goosed by cheap money.
If there is little to no inflation, and little to no growth, then deflation may be realistic. In that case, sell gold, sell silver, sell stocks, hold cash. Cash is the hedge against deflation.
Now if you want to get a little more conspiratorial about it - then you can go one step further and say that the people who want QE3 (people who control great wealth), upon hearing it isn’t happening (yet) sell their positions in a massive and obviously coordinated fashion. Deflation is the one thing this fed chairman fears the most, so, falling markets, falling gold, falling silver, falling housing might force him to change his mind, or change the numbers he looks at to make his decision, giving him reason to look at printing QE3 again.
"I think the worst in the financial system is yet to come, a possible cataclysm and if that happens the gold price could go (higher) to a number that we simply cannot, at this moment, even imagine. Gold is in an uptrend and professional traders should be buying the dips. "
WYNTK. ha ha
“I took the plunge into silver today. I hope it doesnt go back to $17.”
If it does, buy some more to drive your average price down. I would be buying like a fiend at that price.
It’s been a useful asset everywhere for the last 3000 years. Show me one time or place having some gold wasn’t a help.
“It might be a lot simpler than that. People were expecting the Fed to announce more monetary stimulus.”
I meant to say the market in general for the last two years. There is rarely one cuse, I think, but there are too many things that don’t add up; bonds down, gold down, silver crushed. Low volume on good news...I can’t put my finger on it.
Gold is pretty -- we all like it, it doesn't get eaten in a famine or used up during an industrial boom. It's easy to test its purity, divide into small pieces and its quantity grows very slowly from year to year.
Most importantly, politicians cannot increase or decrease the quantity available on a whim.
All of those characteristics make it really good for money. That's its intrinsic value.
ZH posters attribute the recent sell-off in PMs to rumors of increased margin requirement, or, some smallish country unloading their vaults for cash.
AS for the last 2 years, not sure what you are referring to. All things are generally up since 2008 because we are printing and spending lots of money to get them up.
Silver under $20 bu the end of the year.
I bought a stack of kilo gold bars less than three years ago at $778/troy ounce. Think I’m overly upset when a liquidation event briefly drops the price to $1650/oz?
No chance. Leveraged hedge funds and speculators got smashed and had to sell, plus other weak-handed, inexperienced people got spooked and sold this week (and will lose their positions in this long term secular bull gold market), but I’m not losing a moment’s sleep.
All the central banks can do is to keep creating money out of thin air, ultimately diminishing the value of their currencies further.
The aggregate balance sheet for all of Europe’s banks is already insolvent, but the game of pretend will continue for as long as the can make the zombie banks appear to have real life in them.
‘I know there are a lot of gold bugs on FR but I cant get beyond the fact that it really has little intrinsic value.’
No commodity has “intrinsic value”. The characteristics of any commodity determine the subjective value assigned to it by buyers according to their current and prospective future needs. BfloGuy’s list of the characteristics of gold provides a good set of reasons for choosing gold over fiat currency units if the need is to preserve a portion of one’s wealth through a period of severe financial distress and potential communal turbulence, where the authorities who control fiat currency issue are creating new units at a rapid pace.
If I am thirsty and water is in very short supply, a jug of drinkable water will have very high subjective value to me. I might even exchange its weight in gold or diamonds if I had them and were thirsty enough and could not foresee any other means of getting access. If I am not thirsty, and can foresee access to ample supplies of drinkable water, a jug of water may have negative value to me, if I am already weighted down with other things. Similarly with foods of various types. They will have zero to high value to me depending on how well fed I currently am, and the prospects for future access. Again, neither these or any other commodity has “intrinsic value” apart from buyer’s present and future needs.
In an armageddon type situation, large cashes of gold wouldnt help an individual much...
No one is suggesting gold is edible, or should be bought instead of food and other critical supplies for surviving a crisis.
We’re talking about what savings vehicle to employ for our spare money. The alternatives aren’t edible either.
(PS: It’s “Caches”)