Tuesday, September 19, 2006


PM's And Energy In 'Rally-Sold Mode'

A report on the troubles in Thailand. "Stocks dropped suddenly Tuesday after Thailand's military launched a coup against the country's prime minister. Traders watching Thailand closely are certain to remember how trouble in the kingdom had worldwide implications in the past: The Asia currency crisis that erupted in 1997 began with the devaluation of the Thai baht, then snowballed into a currency crisis in emerging markets around the world."

"The baht fell sharply Tuesday, as did Brazil's real, which also tumbled in the '97."

From Bloomberg. "Canada's dollar fell to a one-month low as inflation cooled and crude oil tumbled to the weakest since March. A slower pace of inflation bolstered speculation the Bank of Canada will keep borrowing costs on hold this year. Sinking prices of the nation's commodity exports further undermined the currency."

"'You've got a combination of factors which are going against the Canadian dollar,' said C.J. Gavsie, BMO Capital Markets in Toronto. 'Oil has given up $2 in a day. That massive plunge sped up the correction,' meaning the currency's drop, he said."

From Reuters. "Gold tumbled after early short-lived gains on Tuesday as investor confidence remained fragile after last week's huge sell-off and ahead of this week's U.S. Federal Reserve meeting. Silver sank 2.9 percent and failed to hold above the $11 an ounce mark as technical fund selling continued to pressure the precious metals complex."

"Gold hit a high of $588.50 an ounce in Asian trade before falling as low as $576.40. It was last at $576.70/578.20 in New York, against $586.20/7.70 late on Monday."

"Dealers said precious metals and energy markets now looked to be in a 'rally-sold' mode, as any move higher tends to be met with renewed selling because technical indicators appear very oversold."

"'Technical funds have been shorting the gold market, the silver market and selling the energy market as well, so you have new shorts in the market who I think are defending positions and selling on rallies,' said Mike Guido, director of hedge fund marketing at Societe Generale in New York."

"Prices got little in the way of safe-haven support from a crisis in Thailand, as gold mostly tracked crude as well as a stronger dollar."

"The dollar firmed against the euro in choppy trade after a sharp decline in U.S. housing strength and inflation in August, supporting the view that the Federal Reserve will keep interest rates steady. The Fed meets on Wednesday to decide on rates, after its first pause after 17 straight rate increases at its last meeting."

"In related news, gold reserves of euro zone central banks fell 499 million euros in the week to Sept. 15, the European Central Bank said. The fall was due to sales of gold by three Eurosystem central banks and some traders said the figure suggested a sale of about 34 tonnes of gold during the week."

"In other metals, silver fell as low as $10.79 an ounce before ending at $10.80/10.87, compared with $11.12/11.19 previously. Platinum eased to $1,150/1,155 an ounce, while palladium was at $312.5/317.50 an ounce from $307/312."

A lot of news today.

BTW, readers of my housing blog may note that the site is down. I am having to move it, again, due to traffic issues. It should be completed within 24 hours.
Tonight will be a big news-watching night for currency traders as the crisis in Thailand unfolds. The '97 Asian currency crisis is still pretty fresh in most people's memories. As soon as I saw the headlines I couldn't help but remember that nightmare. (I got slaughtered).

Currently I'm not really exposed to emerging markets, but the big takeaway lesson from Japan's policy change this June was that in these days of hedgefunds, everything is far, far more connected than most people would like to believe.

That's reason to be concerned.

.. and its also September.
First..Congrats Ben! you gotta buy a bigger virtual office building! Good for you..You truly have created such a valuable venue..I click on your ads several times each session you hopefully add to your funding for the movie?? You gotta have something in the pipe...

Soho, or anyone..What are possible scenarios for the Baht crash ? Global currency fallout? Who can say ,but have found that some of the bloggers have been pretty close to right on in calling the PM correction of late,and as such I sold my dogs at the peak 3 weeks ago. I actually bought in on Thurs. so hope this is just a correction....Anyway hope we can start a dialogue to what is possible so I can at least be informed....Good luck
Congratulations are definitely in order! Go Ben Go...
"Thai markets and banks to close:

The leaders of military coup in Thailand have said the country's stock market will be closed on Wednesday, after declaring it a national holiday.

An army faction which claims to have deposed the government of Thaksin Shinawatra said markets and banks would remain shut to try to restore calm.

News of the coup prompted a sharp fall in the value of the Thai baht against the US dollar and other currencies.

Analysts said it was too early to judge the long-term economic implications.

Credit concern

But two leading credit assessment agencies, which analyse countries' ability to repay their debts, said they would review Thailand's credit rating following the coup attempt. "

Good review of iTulip's Ka-Poom Theory, which I find highly plausible...

Ka-Poom is a Rhyme not a Repeat of History
34 tonnes of gold ... is that alot?
So much for the, no gold sales camp lol. Pump and Dump.

This month is the first time I have ever seen commercials on TV for US gold coins.

This is where were shoulda been in the Spring and now will we see 250? JMHO.
Long term the price of gold will go through the roof of course, but just now, a shakeout?

And is the irony of the MandMs candy commercial lost on everyone?
Ben, you blog is rocking the FBs boat LOL.
BEN! I'm having this terrible urge to go out and buy some real estate! Will you please get HBB back up? Please hurry!!! I'm geeetting weeeakkker, weeeakkkker.

PS. Heavy volume is a good thing. Congratulations!!!!
"Tonight will be a big news-watching night for currency traders as the crisis in Thailand unfolds. The '97 Asian currency crisis is still pretty fresh in most people's memories. As soon as I saw the headlines I couldn't help but remember that nightmare. (I got slaughtered)."

The international MSM has downplayed the risk that a repeat of the '97 crisis will play out. In other words, "this time is different." Does anyone have an informed opinion they are willing to share about why or why not this is the case?

P.S. Ben -- good luck with (another) transition to a new HBB platform. You are clearly a victim of your own success.
there is an article in the New York Times today that says inflation is understated!

Why Hasn't “IT” Happened Yet?

I really want to post this one at HBB too, not to mention Mish's latest post featuring Mike Morgan. Great stuff.
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