My inbox has been filled with theories (read: concerns) about the targeting of short silver positions by the REDDIT BRIGADE of financial vigilantes. Is this a possibility? In my opinion, YES, as silver has been a very volatile market since the trade dislocations perpetuated by the COVID pandemic. The metals are not like equities because hedgers — miners with real supply — act to keep a lid on prices as they lock in future costs.
Posts Tagged ‘Hunt Brothers’
Notes From Underground: The DREADS of the Redemption Song
December 19, 2012It was only a year ago that the PRECIOUS METALS were laboring under the continued selling of GOLD and SILVER as the John Paulson hedge funds were liquidating long positions to meet the huge amount of redemptions by long-time investors exiting the decade’s best performing FUNDS. In a repeat, Morgan Stanley announced today that it was redeeming its investors out of Paulson’s two largest funds after another year of questionable performance. In today’s world where one hedge fund can hold massive positions, divestment by disgruntled investors can initiate massive corrections. In 1980, when the Hunt Brothers caused great turmoil in the silver markets, they had a mere BILLION DOLLARS to play with (the Paulson funds control close to $15 billion under management.) As traders and investors it’s our job to be cognizant of all the animals in the jungle. When the elephants retrace their steps from the watering hole, small animals can get crushed (Niederhoffer).
Notes From Underground: It is May Day and the Markets are Truly International
May 1, 2011Elections are tomorrow in Canada. The polls are tight as the surprise is coming from the gains in the polls for the New Democratic Party (NDP), a party led by Jack Layton and is further left than the Liberal party that moved to start the NO-CONFIDENCE VOTE, which forced the early election. It seems that the TORIES will hold their numbers but the desire by Prime Minister Harper to become an outright majority party will not be realized. The political situation in Canada can become very confused as the LIBERALS/NDP may be able to forge a government if the most current polls are accurate. The markets have paid little attention to the polls as the Canadian Dollar closed the week and month out almost on its recent highs–another statement about the U.S. DOLLAR.
Notes From Underground: How many rumors can sit on top of the media pinheads?
November 9, 2010Today saw an unwinding of some of the more frothy positions that have been built up since the FOMC announcement on SEPTEMBER 21. All asset classes, from stocks to commodities, have been rallying as the FED promised that it would do what it could to insure against the onset of a deflationary spiral. Many news outlets reported that the silver markets broke hard after CME GROUP raised margins on SILVER positions. The talking heads compared this to the Hunt brothers in 1980, which is COMPLETE UNADULTERATED RUBBISH. The margin increase was relatively small and nowhere near the type of actions taken in 1980 when some nearby silver contracts had a margin of 100 percent of the value of the contract. Also, margin rates are relatively low on a value of contract basis and as we also know much of the investment in silver is taking place in the ETF market where the future exchanges have zero influence.