Gold Positioning Update – New Extremes Are Recorded

Submitted by Pater Tenebrarum  –  The Acting Man Blog

A Brief Update on Positioning and Sentiment in Gold

Even while gold’s fundamental price according to Keith Weiner’s calculations (in which he compares spot to futures prices) stands some $140 above the current market price (as of the end of last week), futures market speculators have turned more bearish on gold than at any time in the past 13 years.

 

BN-ID143_0428cm_J_20150428110208Photo credit: Lisi Niesner / Bloomberg News

 

When there is great unanimity among traders about a market’s direction, they are very often going to be proved wrong – at least in the short to medium term (i.e., over time periods lasting from weeks to months). The caveat is that even more pronounced positioning extremes have occurred in a few short time periods during the 1980s and the 1990s, and there is obviously no law that says this cannot happen again.

 

1-Gol CoT-1Last week, the smallest net speculative long position since January of 2002 was reported (this chart shows the net hedger position, which is the inverse of the net speculative position) – click to enlarge. Continue reading

Did Something Blow Up in Junk?

Submitted by Jeffrey Snider  –  Alhambra Investment Partners

There isn’t much as far as confirmation, but it increasingly appears as if “something” just hit the triple hooks (CCC) in the junk bond bubble. At least as far as one view of it, Bank of America ML’s CCC implied yield, there was a huge selloff that brought the yield to a new cycle high (low in price) above even the 2011 crisis peak.

Citigroup December 2014 Junk Collapse BofAML CCC

Now, this had occurred before on August 13 amidst the growing carnage in the “dollar” run through the PBOC and China. The published rate for that day was just over 16% and a similarly huge jump, but that was quickly revised (no reason given) to actually less than the day before. Further, that pricing revision applied to BofAML’s Master II HY index, as well, which had also been initially published in an explosion that day only to erased quickly after.

Citigroup December 2014 Junk Collapse BofAML CCC Recent

Continue reading

Brexit: Was The Iron Lady’s Warning of EU ‘Superstate’ Correct?

Submitted by Mark O’Byrne  –  GoldCore

Britain is continuing to debate its role and its participation within the European Union in preparation for a major vote on whether to leave the union altogether. There are indications that the referendum – known as Brexit – is likely to be held in 2016.

Thatcher

Irish Independent

It could be argued that Britain was always a reluctant participant in the European experiment fearing for their sovereignty and independence.

As Margaret Thatcher warned back in 1988 “We have not successfully rolled back the frontiers of the state in Britain, only to see them reimposed at a European level, with a European superstate exercising a new dominance from Brussels”.

According to David McWilliams writing in the Irish Independent today, “Mrs Thatcher’s concerns were bang on the money as far as Britain is concerned” and that famous euro-sceptic Thatcher speech in 1988 is remarkably consistent with the British government position today.

McWilliams thinks that sentiment in Britain is ‘sanguine’ about the possibility of Brexit.  He believes life will go on.  Currently, opinion polls show a slight majority in favour of leaving (see below, click to expand).

GoldCore: Telegraph Brexit Poll since 1977Source: The Telegraph

So if Britain does leave, will that diminish the power and resolve of the remaining members of the union?  How will Ireland fare post-Brexit?  Will the British economy falter or prosper as a result?

Read more from David McWilliams on “How the Iron Lady drew up the original blueprint for a Brexit

David McWilliamsDavid McWilliams is one of Ireland’s leading economic commentators. His objective is to make economics as widely available and easily understandable on as many platforms as possible.  Follow him on Twitter.

 

Other Sources:
See: EU referendum poll tracker and odds

The Daily Debt Rattle

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth

• Yellen Says ‘Looking Forward’ To Day Of First Rate Rise In Decade (Reuters)
• Opposition To ECB Stimulus Could Lead To Watered-Down QE Plan (FT)
• Equities Peak 12-18 Months After A Peak In Margins; We’re Now 15 Months In (ZH)
• Commodity-Related -Junk- Bonds Face Big Losses: Moody’s (MarketWatch)
• Oil Speculators Risk ‘Short Squeeze’ If Impulsive Saudi Prince Throws OPEC Surprise (AEP)
• China Says To Cut Power Sector Emissions By 60% By 2020 (Reuters)
• Russia Presents Proof Of Turkey’s Role In ISIS Oil Trade (RT)
• The Greatest Economic Collapses in History (Howmuch.net)
• Brazil Goes From Crisis to Crisis as Impeachment Bid Moves Ahead (BBG)
• Massive El Niño Sweeping Globe Is Now The Biggest Ever Recorded (NS)
• More Than A Quarter Of UK Birds Are Fighting For Survival (Guardian)
• Kicking Greece Out Of Schengen Won’t Stop The Refugee Crisis (Guardian)
• (Greek) EU Commissioner Tells Athens To Speed Up Border Controls (Kath.)
• Leaked Memo Reveals EU Plan To Suspend Schengen For Two Years (Zero Hedge)
• Greece Is Back At The Heart Of EU’s Existential Crisis (Telegraph)
• Detain Refugees Arriving In Europe For 18 Months, Says Tusk (Guardian)
• Half A Million Syrian Refugees Could Be Resettled To EU: Hungary PM (Reuters)
• Greece Spent €1 Billion On Refugees, Got €30 Million In EU Assistance (Reuters)