A Great Weekend Special (Editorial) with Bob Moriarty
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FRANKY ……………THANKS FOR ALL THE POST………….
thanks jerry !
Very nice heavy hitter may they burn in hell the manipulators
You have left out the main reason short selling should be banned. When the hedge fund
dumps 10,000 shares on the market that causes (manipulates) the price down as the bid
price must go down to attract more buyers.
That was great Bob. Thanks.
Great to have him as a regular contributor to our site because he is smart and very insightful!
Yes he is Al. I usually enjoy him to be honest. I only get bugged by that other side of his personality. But then again, we all have one….including me!
Bob is a valuable contributor Al. Thx.
How does price discovery happen if millions of ounces of paper gold dumped on the market in a short period via the futures market doesn’t affect it? Of course it affects it. Nobody would take a long contract in those circumstances except a hefty discount, thus the price falls under an avalanche of selling.
Al…..YOU forgot to ask Bob M.. about the TOOTH FAIRY………..I am still hoping there is one…………….., oh, Irish wanted me to ask………..
What Mr. Moriarty failed to mention, was the effect of margin calls, caused by massive selling by the big guys.
The problem is that, because futures are leveraged, the long traders can be driven out of the market by sufficient selling by the big guys.
Someone with enough money can ALWAYS WIN.
A margin call will always drive an over-leveraged small guy to sell.
So a big guy sits, watches the market slowly move up, watches where the margins are at, sells a big lot of futures to instigate margin calls and sales.
This allows the big guy to buy back and cancel out his original sales.
By choosing times to sell when then market is thin and MOVES more, the market can be made to move down more.
By choosing times close to the end of a contract, also, the big guys can have an edge, because the little guy is forced. The game is stacked.
CFS………thanks for the explanation ………..
Some very great points……………..
CFS is right, and so is Bob —the futures market is there to set the price and set the price they do! This is why one should avoid leverage and not sell into weakness. Long term, the metals will continue to discount the fundamentals.
THANKS MATTHEW………
And that might be why, Matty?
CFS,
I agree the game is stacked but does that mean it is manipulated? I guess in a sense you could say that the advantage the big guys have when they dump the shares to drive price down is in fact manipulation.
BANKING REFORM…………this was Mar.2013……….WHAT UP TODAY?
The futures market is like playing a game of poker with the dealer always knowing which cards are dealt. In the futures market the dealer always knows where the stop orders are. Someone with ENOUGH money can always drive the market to the stops.
Frankly, I’m not going to post with this crap from Franky cluttering up the useful content.
ok i stop ! ok
I have to agree…………Frankie ,,,,,,just put on the related info……tied to the subject matter at hand………….PLEASE…THANK YOU………..
I am kind of enjoying Franky’s take on things. It comes across a lot better than his English atempts. Adds a little colour too, don’t you think? Lets not get all upity about some video links. Are you not a supporter of freedom of speech, CFS? Or you think you are in competition for airspace? Hell, Al could ban all of us since we brawl like a bunch of school children day to day!
Kinda agree Bird Man but it might help if franky got to explaining himself better, A
One thing we know about him is he loves planet Earth and he is genuinely concerned about what Fukishima could be doing to the planet. I share some of the concern. These industrial accidents just seem to be getting bigger and more dangerous each time they happen. What is coming next? It’s why I really loath the idea of a war in Asia. Do we really need to blow everything up all the time to stimulate new growth. How much more of this behavior can the planet stand before we have gone too far?
I mean to say I usually have better things to do than be bothered by people whose hearts are in the right place. There are real arses out there who deserve our arrows a lot more than Franky.
The problem with Bob’s argument is that he is essentially saying that physical demand will never play a role in price discovery. With physical gold and silver, it is entirely possible that the price of physical metal could disconnect from the paper price. I believe even Bron Sucheki of the Perth Mint has at least acknowledged the possibility, although someone should ask him what he thinks about “price discovery” in the precious metals. Since some people may some day never accept paper as substitute for physical gold and silver, which unlike oil, or corn or cotton, can (theoretically) be hoarded easily by a few people or few governments. It may be the case that my scenario is highly unlikely and I certainly can’t tell you when it will happen, but it is a possible factor to consider when thinking about whether you want to buy physical or paper precious metals.
I take it that the net long position in gold by the big banks is still a meaningful signal, not noise?
Gary said in reply to a question I asked which was How does The Fed stop markets from going into free fall. I said they must buy stocks directly on The US exchanges, Gary said they buy the futures. I now realize that they couldn’t do that. DT
Bob is correct. Physical demand will NOT play a role in price discovery, UNTIL there is insufficient supply.
Until the moment the COMEX inventory goes to zero and a force mejeure (spelling?) is declared and settlement is made in currency, there will not be a divergence between physical and futures price.
But we are getting close.
There won’t be any default as Comex is a tool (just like hammer is a tool in construction) to shave sheep off of money. You (the bullion bank) destroy the tool you destroy the mechanism to steal money from sheeple which bankers love to do on regular basis since beginning of times. Any fool believing there will be Comex default also might as well believe in santa clause. What will happen is rise in price while JPM is long Comex and JPM makes billions. Oh and that is another thing JPM does not want to do, to give me Comex as a tool to make billions. Some of ppl are fools!!!!
Brilliant, seb
Meanwhile we are seeing some signs of the beginning of a divergence.
The price in Shanghai is no longer the price in the US plus cost of shipping to Shanghai. (There is an extra premium in Shanghai)
There is occasionally backwardation appearing in the futures market. i.e. Gold sooner is more expensive than gold later……implying a shortage here and now.
http://www.zerohedge.com/news/2014-02-09/americans-are-renouncing-their-citizenship-record-numbers
It is still only running at 3,000/year and, of course, they are still liable for US income tax on all earnings, I believe, for a further 5 year, after renouncing citizenship.
But wait a few years.
Hmm, I hadn’t heard that about 5 years. I try to follow this stuff, but am far from expert.
What I do know is that if you have sufficient wealth in capital gains, like the Facebook guy Saverin, you have to pay tax on it on the way out.
Confusion !!!
I hear from Bob M. that there is no manipulation and then I hear from Rickards, a highly respected authority, that there is massive manipulation taking place. There are contradictory statements from the respected and well known analysts regarding manipulation in the metals markets and I for one would like to put this to rest once and for all. Big Al can help by posing the question directly to these analysts and get an answer once and for all. First define and explain manipulation and then get an answer. Is there or isn’t there. Geeezz.
Jerry,
I COMPLETELY AGREE..having two respected industry professionals with experience that I find both trustworthy – on opposite side is quite confusing and frustrating!
The manipulation is heavy and exist. It’s proved in book by Dimitri Speck The Gold Cartel and Gata has demonstrated that as well. No point in debating this subject. Sprott also proved. it.
That’s right….central bank sales 15 years ago. Now dumping thousands of short gold
contracts on the market through JP. India another seizing gold imports.
The problem with the gold bulls is they fail to forecast those coming events. Eric Sprott
should have known it was coming. Rode the whole pile of gold crap into the sewer.
This time is most likely different because they are going to lose control. China has cornered the gold market. Not only that JP has lots of shorts to cover now.
However they will do it again unless the world really comes undone. So when gold
gets up into the 3000 or 4000 area…..they will find another trick. Like India. Maybe
China next time. Who knows.
Suggestion: Keep your eye on the ball
The mistake that Mr. Moriarty is making is that he is assume a free market.
A market in which a price is set between buyer and seller without coercion in the futures market.
Because the big money has stop order placement data, the big money is able to modify the price to force the stops.
Bob is saying “if you sell 100,000 contracts and buy them back, the overall effect is zero. i.e. he is implying the price goes down when the contracts are sold and then goes back an equal amount when they are bought, so no overall effect.
He is totally ignoring the second order effects of what happens when the price changes (because of a large sale order) with stop orders and margin calls affecting the price.
Large
The traders who use stops in volatile futures never make money only to lose it.
Same with volatile equities especially miners.
If you can’t suffer temporary paper losses, then stay out.
As long as you buy very cheap or close to it …have the trend in place
which is always up if you buy on the cheap. No stops and suffer some
Temporary losses.
YOUR GOING TO MAKE FORTUNES.
Silver right now is a great futures trade. Not when it gets away though.
The trade is already taking off and so is corn. Corn is a buy with 2% or so
pull back.
i AGREE !
You’re overlooking the ETF futures that are not required to pay off in the commodity that carries it’s namesake.
An ETF….is not futures. Futures is where real men with guts make fortunes.
Not options either. Futures just roll your contract over.
Options unless your selling them to the suckers that buy them
Lose money.
I will sell a put and a call in sideways market. Never will buy them
I love futures and thats my game. But only a few trades come up
In a few years for me. I have very strick criteria.
True, ETFs are not futures, but they are used as such to impact the futures market, especially the precious metals. Ironically, there are also options trading on these ETFs.
Most of those ETF’s in commodities are not very liquid for large sums of
capitol. Also playing options on some of these ETF’s are extremely foolish
and have no liquidity at all if thats what some one wants to do.
If you know for certain something is going up substantially and there are
Very liquid options trading then its…OK. problem is no one knows for
Sure how much and how long it might take.
Still all the big money is in futures. There is no time loss to speak of
and if the price doesn’t move and eventually does you make fortunes.
I don’t trade futures only when rare opportunities come along. Like I said
before. THATS ANOTHER REASON WHY TRADERS LOSE BIG.
Solid futures trades are rare opportunities. 1 or 2 within 3 years.
I would have no problem with long silver trade with a mil or so on it.
Make a few mil. Easy right now. Right now I have a huge stake in the
miners. Its going to be just as good. Fortunes will be made in the miners
Extremely foolish unless your can manipulate the under laying security which does nothing more than symbolize or allude to the under laying commodity.
“Solid futures trades” began the USA when farmers used them as a way to raise capital within having to go in debt for a crop load to buy seed. The futures contract was created by the farmer to sell a share of his harvest to the buyer of the futures for a set price with a set delivery of that commodity. It was an honest form of capital formation within a free market society. (I suppose you could argue it took the place of crop insurance since the buyer of the futures contract took the on the risk of the harvest.)
From that beginning it’s morphed into this mess of exotic paper and derivatives we have today–or accurately it morphed into fraud on its face where money isn’t used to create capital but to enable a very few very large brokerage houses (aka “banks to big to fail”) to divest honest investors of their money.
Franky…too heavy on the bids,man
Vids
Bob Moriatity. The same Bob Moriarity who proclaimed that silver will never go to $20 an ounce. “At $20 an ounce that price will suck massive amounts of silver out of the ground.”
Or how about his call on Goldgroup (GGA). “Gold group is going to be a giant home run.”. That was uttered at $1.37. It’s now down to .16 cents.
I’m not sure he’s as smart as Bob Korelin thinks…………
Icarus
That didn’t happen either……………
Fortunes are also lost in the miners.
Until the US is forced out of the racket the price discovery on metals will be as slow as the US giving up their printing scam.
And speaking of fortunes won and fortunes that were lost….. today is the anniversary of the greatest single transfer of land in the history of the world. It is not marked by any ceremony I know of and it is hardly even a notation by historians on popular blogs.
Back in February 10th of 1763 though, the French and British Monarchies signed an agreement that came to be known as The Treaty of Paris (1763) that gave all of Canada to England in forfeiture for the loss of the Seven Years War (AKA French and Indian War).
In that one incredible period of time, Spain also handed over Florida to the Brits and the French transferred Louisiana to their control along with a host of others including Tobago, the Grenadines and St Vincent. It was a really big deal. The funny part is that England almost kept Guadeloupe instead of Canada because it was so productive in sugar plantations and was generating a lot of money.
Just for reference, the South Sea Bubble had burst 42 years earlier in 1720. That event had coincided with the bursting of John Law’s Mississippi Bubble in the same year as an outcome of excess printing of shares which the crown had guaranteed.
The many European conflicts that followed were certainly an outcome of the financial ordeals that both France and England had suffered through during those times. And that in a nutshell is why it is dangerous to screw around with monetary tools and speculative forces that cannot be contained. The French loss of its Canadian possessions was devastating and they have never really recovered. The outcome of history was changed decisively. The important point though is how the collapse of global companies and their respective sovereigns resulted in a long period of conflict over lands and resources that ended up engaging most of the developed world of the day.
I am trying to think of a modern day parallel to put the above story into context but can’t seem to come up with anything that fits well. Anyone else?
The only things that might come even a little close might be the Pope decideing that Portugal and Spain “switch” properties in South America or the break up of the soviet union.
I didnt realise the island almost kept was Guadalope, I thought it was Jamaca. For spices. Oh well, memory fades, but your right, there should be some mention of it, the deal was a big one. Too long ago I guess.
The French remember. They have been grinding their teeth ever since. Ever notice what a pissy lot they are? Talk about sore losers! The world would have been a lot different place though had the French controlled North America. We would all be speaking a different language today. Maybe the modern parallel to my story is not one based on physical ownership of lands but rather the ability to promote your own agenda and carry that sphere of influence into foreign countries. The Chinese for example are getting pretty cozy with both South America and Africa these past few years. Continent sized targets. Those continents of course are the last great regions opening up for development and mostly lag behind the developed West. Conquest is not on anybody’s minds though. Rather the ownership develops through trade agreements, financial interconnections, lending facilities, technology sharing, infrastructure development and the creation of formal bodies designed to create blocs to resist the entry of others. Or maybe its just handshakes and done deals. Here in Africa I have heard Chinese direct investment will be some 400 billion dollars by 2015. That may not seem like much money in the West but it is a stunning figure relative to the size of economies here. Doubling someones GDP across a couple years through cash infusions like that carries a lot of weight. It gets noticed by local governments and naturally enough it also buys plenty of influence. We won’t even pretend to not understand how that kind of attention will pay off in the future.
Your right bird, a huge investment.
I believe they have a common understanding due to what our common history is, European colonialism then the Americans help to make the west unpopular.
I still think its the banks, but whatever it is, I think that South America and Africa are slowly prefering to doing business with the Chinese.
Oh, and your right about the french being kinda “pissy”, lol
Billy…Dillion….now….Matt
WHY DO YOU INSIST ………POUNDING YOUR OWN
SAND !!!!!!!!!!!!!! …isn’t that exhausting
This is what you call despicable. You took a very risky bet with buying holes in
the ground and you blame the market and come here and
HARRASS …….you hit on Matthew the other day busting his chops
I’ve been trying to help you….all you do is continue on f ing with investors here.
Matthew tried to help you and you do is called him names. Still f ing with him too
WHO ARE YOU….AND WHAT KIND A PERSON DOES THIS……
The question is through these evil works………
HOW WILL YOU BENEFIT ? ….I’ll be waiting for your answer
In the meantime can you please kindly….STOP THE EVIL HARRASSING.
GO get em…HH…And Matthew is probably the brightest investment mind on this blog…too!
SD Marc
I know and Matthew or myself don’t need trolls on here singing
their song….over and over…changing his name…constantly.
Calling everyone names.
Its evil harassment.
What became of Trader Rog?
It’s not a parallel. But whenever I hear the word futures I always think of Mrs. Clinton and her success in cattle futures in 1994, whitewater cattlegate, etc.
In Remembrance:
http://kingsjester.wordpress.com/2014/02/10/the-legend-of-the-hildebeast-hillary-papers-released/
Let’s never forget!
One real problem in the U.S. is the biased failure of the Press to report anything adverse to the Democrats.
http://www.foxnews.com/politics/2014/02/07/lawmakers-push-to-protect-electric-grid-after-report-on-attack/
The point Bob misses about manipulation is position limits.I’m no expert ,but I seem to remember when then the CFTC starting enforcing the position limits,JPM was grandfathered in with their short silver contracts even though they were not in compliance with CFTC position rules.
Yes, and they abolished the uptick rule and don’t seem eager to enforce the rules they have.
Getting back to the marketts for a second…….if anyone is watching silver you are probably feeling pretty good right about now. We are so close to a breakout you can smell it. Just another few inches and I think it will be safe to say we have seen the bottom and it is gone. Of course I will have to eat some crow but it’s no matter since I am not that loyal to metals to start with. Better to shift with the winds than get stuck with low targets that are not going to pay off. Silver might also be telling us that the correction in equities is not yet in either. Just another inch…..and we will know.
silver has a very long ways to go…. its a solid futures trade as the metal itself.
FWIW…IMVHO Doesn’t get any better…believe me….
fortunes will be made in a few months time. Solid as it gets.
I am finally getting interested in the long side again, HH.
Its not going to get any cheaper. FWIW
Thats why I bought CEF. It’s safe and soft ride up and corrections
will be minimal. My physical alternative.
Its really one a person with little tolerance for big swings can enjoy
Nice appreciation. And for me its the best paper physical.
MUCH BETTER THAN IN CURRENCY OR BANK.
can’t go wrong……IMVHO
Seems like an OK time to buy. Way down from last year but likely to perform in 2014. You picked it up at a discount to NAV so that’s something to cheer about.
Thanks…the point is for me….Mr. Market with this paper gold may
say most of its junk. ?.if …SHTF.
CEF though will prosper IMVHO they have the metal and its
not an ETF shame.
You gotta think ahead. You know….you mentioned scrambled eggs.
Paper gold may burn….if it gets real bad. FWIW
BTW….bought my large physical position through..CEF.
REASON. its a lot easier to sell and if everything collapses you
will still be in trouble with the metal in hand.
Reason…they will confiscate it and I believe if you don’t turn it in serious criminal
penalties. IF YOU CAN’T DO THE TIME….DON’T DO THE CRIME
No they wont confiscate…they will just try to tax the SAM HELL OUT IT<<<SUCKS!!!
Who knows…..its anyone’s guess.
Yep…..the sediment here amoung those who come here to either looking to invest
In gold or spend their time……..COULDN’T BE……BETTER
HA…….things never change…just the characters.
THIS IS A VERY YOUNG GOLD BULL IN PLACE
prices sre going like I ssid……….SKY HIGH…nothing but buyers left in the market
THATS WHERE WE ARE AT……..TO MY ONLY……FELLOW GOLD COMRADS
Don’t listen to the scoffers and trolls here or sideliners either
Bob, is the futures market with 100 contracts of silver or gold to every one delivered somewhat similar to a horse tace, where the winner gets $100k or $1 million but there are $100,000,000 of bets on the outcome. The delivery is a bit like the one guy who gets the prize money at the podium and the $100m in bets has nothing whatsoever to do with it. That’s just the bets on the outcome of the race and is not going to affect the outcome of the race.
Now we’ve got Mr. Moriarty telling us that all we have to place a blind fold and throw darts to make the choice for our specific selection of stocks. The next thing he says naked shorts don’t exist. I know he will say USA is the only market with a free market system. I’m going to stay up all night on Dec 25 to see if Santa Clause exists.
Well said James Wiitala. But I think most traders would already know that. Although Bob Moriarty obviously doesn’t know it.
What kind of posting system is this???????????????????????/
UPDATE YOUR SOFTWARE
I like Bob but do not agree with his comments. If I naked short the market to a ridiculous level it affects selling which may counter balance the naked short move but the point more so then the balance of trades here is the depressional affect on the markets themselves. Don’t you understand these assholes naked short the market and then buy the Gold on the other end keeping to price of Gold psychologically depressed the way dumb ass Gordon Brown sold all of Englands Gold into the market at sub 300 levels. damm right there were buyers on the other end,..I was one of them. This is actually a tool for the Rothchilds and their ilk to acquire Gold secretly.
Many short gold contracts dumped on Mr. Market.
Hmmmmmm….. whats that smell…..is that smoke …gold shorts burning.
THEY WER’E WARNED……DON’T PLAY GAMES WITH…KING GOLD
yaaaaa…gonna……..GET BURNED