Thursday, June 2, 2011

No use using reason

10:17 am (Hawaii) There wasn't much logic to the procession of dominoes from time to time in this fugly global economy, but the disconnect is a little more common now. Greece comes up with a backup plan that only a crackhead would love. Stave off payback by minimizing austerity measures? Sure. Go ahead. Greece can do its thing, so why would the market reward it? Why would FAZ finish in the red and FAS go green as a result? 1. Short-term nature of traders, and more so 2. the machines don't give a fuck.

It appears, according to the space-alien trading robots, that the naughty banks and finnie stocks involved with this mess can't get any worse as long as the lie is perpetuated. Not that anyone believes it. But just feigning appropriate measures is enough to keep the fins from the roughshod they truly deserve on the open (?) market. No less or more crooked than Big Brother's protectionism in the Middle Kingdom. It is what it is.

It was a weird day in the metals. ZSL fell way, way, way off its high but still was the biggest mover to the upside (2.5%). REE (rare earths), MCP (rare earths) and DUST (gold bear) were the other top gainers. Just about everything was either fractionally up or fractionally down. Money left the PM market and, to be sure, hardly any entered. Just no buyers.

Silver got crushed, as did gold, but gold recovered somewhat. Silver dipped almost down to 36.50 with a little help from friends at the Comex. Today's worst metal losers on my list: GPL (2.99, -4.5%), EXK (9.55, -3.3%), AG (19.61, -3.2%), AGQ (182.00, -2.7%), SVM (10.66, -2.7%), PAAS (32.33, -2.5%), PSLV (16.46, -2.4%), ABX (46.22, -2.2%), SLW (35.24, -1.9%). That's eight out of the worst nine being silver. Can't say I didn't expect it. I don't like it, but as Brother Turd noted, if it wasn't spot wasn't heading over 39 soon, it would retest 36.50. That's precisely what the puppet masters did. From here, who knows?

If they dare bring price below 35 to 33 or 30, I'm prepared to add more physical. Savings in greenbacks just hasn't been worth it lately. Why would I keep something that I had 79 of in February and was reduced mysteriously to 72 by May? It may be worth 75 or so now, but will it stay there amidst all this devaluation? I really wouldn't be surprised to see Spot Silver retest 26 or lower at some point before vaulting higher. That kind of volatility is partly why I'm shopping for gold at discount prices this summer, if seasonal swoons are on cue. Eventually, gold and silver will rise. Gold, in particular, won't flake and flame out, not when the world's biggest bankers are stocked in it.

It may seem like an old fart's kind of fetish, but I'll tell you this: It has to beat being a crackhead.

Turd's take: Minimize risk (June 2 2011)
SGS: This is summer of 2007 (June 2 2011)

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