drbubb

POSSIBLE RETURN TO GOLD Standard discussed in the Press

What if many of those London jobs melt away, at the same time new supply hits the market? This could create disaster, a self-inflicted one.

Those outsiders were very wrong in 2008 - We never saw the derivative nightmare that they forecast. What we did see was the Treasury stopped fears from spreading by saving AIG, Fannie and Freddie. But IMHO they should have forced a haircut on the banks saved when they guaranteed AIG - that was a major mistake. We can discuss this on the other thread, sil vous plait.

I think the risk you talk about is far from imminent - and by the time it arises, I will have enough funds parked in Physicals, that it will be able to withstand it with ease. Meantime, I have been hedging the very real price risks using options - a great tool that you do not seem to recognise. Nor do you acknowledge the historical track record that I have painstakingly built up on the Beating B&H thread. I have no agenda to "turn people into traders" (!) as you put it. (That's ridiculous, the whole mission of GEI is self-empowerment, which I think everybody posting here knows.) I do want to help people progress in their understanding of markets, and tools like options, rather than encouraging the grim-&-superficial-scapegoating that some sites like GATA's seem to encourage. (Other sites like Financial Sense have also performed a useful mission by explosing some of the lies and half-truths that GATA has used.) IMO - Your analysis of derivatives markets is deeply flawed. With some real justification (my prior employment) I can claim to be an expert in this area (or at least a former expert.) The risks have been far over-dramaticised, and I do not want to contribute to the exaggeration. I have been reluctant to respond to your points, because I did not want to embarrass you - amongst those who really do understand something about the derivatives business. I suggest you continue this discussion on a new thread that I have started on this topic- as a response to your complaints that I was ignoring you: http://www.greenenergyinvestors.com/index.php?showtopic=15411

Centa-City Leading Index CCL Latest release on 2011/09/30; prices from 2011/09/19 to 2011/09/25 [Centa-City Leading Index]------- 99.21 : +1.05 % from prior wk. : -0.20% pr.mo. [Mass Centa-City Leading Index] 95.85 : +1.13 % " " -------- " " : +0.44% ===== (Mid-Levels): Robinson Place 14,277.56 : +2.37 % Tregunter ----- 17,859.42 : - 0.12 % Dynasty Court- 22,067.19 : - 0.12 % Clovelly Court- 17,073.92 : +1.35 % (West Kowloon): The Waterfront 13,628.06 : - 0.93 % Sorrento ------- 16,373.66 : +2.86 % The Arch ------- 20,327.47 : - 4.62 % Island Harbourv 9,232.64 : - 0.56 % Park Ave. / CPark 10,432.82 : - 1.83 %

You have a very narrow and restricted view. (It seems very naive to me!) That fact that I understand and use derivatives well does not mean that I condone the ways that they have been abused. But to me the biggest abuse is the way that derivative markets are over-blamed by those who do not understand them for all sorts of problems - some of which are purely imaginary. 2-3 years ago, many were saying that the financial world would be dragged by loses on the trillions of dollars of derivatives that were out there. In fact, the problem was almost entirely in a very small number of players - with AIG by far the worst. And the "solution" of paying out 100% to AIG's creditors, while allowing Lehman's to fail was the big mistake IMHO. Remember my old saying: "No bailouts without haircuts"? IMHO, what the government should have done was to say to those Top 10-20 firms with AIG exposure : You can have a government guarantee, but if you decide to take it, you will only get 75% of your money (or whatever non-100% figure seemed most appropriate.) You have 2-3 days to decided, and if you do not elect to take it, you will have to take your chances with AIG risk. This wise solution would have removed the "moral hazard" argument, and taught the Too-Big-To-Fail banks that there is a limit to how much of the risk they can pass on to the taxpayers.

I have no problem with that. So you are saying, "there should be no battle." Actually, I agree with that. I am merely presenting a demonstration that there exist tools (options and TA) which can enable one to produce returns which beat buy and hold, without gambling - merely by understanding the tools, and deploying them in a disciplined fashion. I think Pixel could defuse the whole "Battle" by saying: + Some do not have the time, or the interest in learning the "disciplines" + You are taking a risk, that while you use options on etfs, that they may blow up in your face if the etf fails Had he made such an argument, then I would have to agree with the second point, and say: "Yes, I know that, but look at this: I am generating excess returns so quickly that once I have parked 10,000 ounces in physicals, I can use the excess profits that I have generated to carry on with the TA-&-Options games."

It is humorous, too be sure. But there's a certain short-term-ish logic in it.

Not everyone was surprised. Several on TFNN nailed it, talking about $100 per day drops, and a return to $1550 or so.

A sensible view. "likely to have a correction which will last for several weeks, several months" Larry Pesavento has been talking about the possibility of $1200, or even lower.

(A similar battle here to the one on the Silver thread? It does feel it bit like that sometimes...) Battling for Ego or "for Light" ? (haha) Actually, I do not understand why you do not analyse what is happening here... WORTH FIGHTING FOR?: I am suggesting Options and TA are useful tools and have been demonstrating how to use them Pixel keeps coming on, and saying things like: + You are missing this big risk : etf's aren't physicals + "I don't give a stuff" (that your options & TA techniques are working) It is not about ego - it is about trying to get across to someone who is very close-minded, the value of the information I provide freely here. (I thought a real-life demonstration over many weeks and months, might be enough to show that options and technical analysis of great value in trading and investing.) In fact, the close-mindedness of a few who post on this website is really starting to get to me. Not only are some people coming here with very fixed ideas, but they somehow feel duty-bound to rubbish the useful information which is freely provided here, at the expense of time and (some) money. I really wonder why I bother at all ?! What is being battled here is the "Buy and Hold is best - & everything else dangerous" mentality. But frankly, those who understand and use these techniques, or have learned them here, never seem to jump up and defend them against the attacks from Pixel et al. They leave it to me. Instead of just ignoring them, or telling Pixel etc to shove off, I try and defend them using the very real track record that has been built up here now. What's wrong with that? (It puzzles me that so few others not take up what - to me - is very clearly the DEFENSE of self-empowerment against the force of ignorance, reaction, and lets-stay-in-the-darkness?) Haha- (I am aware that I am baiting some - but there's a genuine frustration too.)

"Look at" for about 10 seconds or so ? "Understood"? "Read Wilcock's book"? I think not. (I wonder sometimes why I bother sharing my trading ideas with people who are close-minded, and have so little to share with others? I think when I sort out the hosting issues here, I will move towards and new Subscribed Members section, and move the GEI Trading thread there. Let's first see if there is any audience for it.) Here's another thought-provoking video, by the best-selling writer Graham Hancock:

Here are some Reports: (1) HK Property 2011 Outlook - JP Morgan - dated 21 November 2010 Policy intervention getting intensified; stick to landlords /see: https://mm.jpmorgan.com/stp/t/c.do?i=2DF30-2&u=a_p*d_509131.pdf*h_-10lqbiu%0D%0A Possible Prop Longs $-Price : HighPr -% off : HSI ==/ HangSeng : 17,636: 24.98k-29.4% : -NAV* : Disc.% : JP-pr* HK01=/ CheungKg : $84.90 : 137.6 - 38.3% : 169.80: -50.0% : 1238 HK04=/ WharfHd. : $39.25 : 63.80 - 38.5% : $76.10: -48.4% : $54.8 HK10=/ HangLGp : $39.95 : 54.95 - 27.3% : $62.80: -36.4% : $50.7 HK12=/ Hender.L : $36.05 : 61.50 - 41.3% : $78.90: -54.3% : $57.8 HK14=/ HysanDev : $24.50 : 39.45 - 37.9% : $50.20: -51.2% : $32.5 HK16=/ Sun HKP : $90.00 : 147.0 - 38.8% : 180.40: -50.1% : 135.5 HK17=/ NewWrld : $07.56 : 17.98 - 58.0% : $29.00: -73.9% : $16.3 HK83=/ SinoLand : $10.48 : 18.90 - 44.6% : $21.30: -50.8% : $16.6 HK101/ HangLPr : $23.90 : 40.50 - 41.0% : $34.80: -31.3% : $36.4 HK19./ SwirePac : $80.60 : 137.2 - 41.2% : 183.00: -56.0% : 120.9 HK41=/ GreatEgl : $17.10 : 29.00 - 41.0% : $50.60: -66.2% : $24.6 HK683/ KerryPr. : $24.60 : 47.00 - 47.7% : $73.80: -66.7% : $42.6 HK823/ LINK.reit : $24.85 : 28.20 - 11.9% : $27.00: -08.0% : $24.3 HK2778 Champ.R : $02.96 : $5.06 - 41.5% : $04.10: -27.8% : $4.50 HK480/ HKResrt. : $02.70 : $5.50 - 50.9% : $ ???? HK635/ PlaymHd : $02.25 : $3.13 -28.1% : $ ???? HK917/ NWChina : $01.95 : $3.24 -39.8% : $ ???? ======== *Based on JPM's 2011 Outlook, dtd. 21 Nov.2010 EXCERPT: HK residential property to be the battlefield between policy interventions and liquidity: The HK government finally appears to be determined to curb housing prices with an unprecedented heavy stamp duty levied on speculators. We believe this is a strong dose to calm down the housing market, which has remained heated despite earlier measures and we expect 5% downside in the near-term. Although we see a 15% upside in 2011, policy measures could carry on. • Landlords a strong preference to ride on solid economic growth and prevailing low cap-rates: Given the new measures, we expect slower property sales that drive down development NAV. In contrast, commercial properties are less vulnerable to policy interventions, and are buoyed by the resilient demand without significant cap rate expansion. We upgrade our NAV estimates of landlords by 9-27% while those of developers range from +3 to -10%. We expect landlords to trade at narrower than LT average NAV discounts given the lower resistance to commercial rental growth and abundant liquidity, while most developers will trade at LT average discounts or slightly below. As a result, we upgrade Hongkong Land (proxy to HK office) to OW from N and downgrade Sino Land (largest exposure to HK residential) to N from OW. • Prefer Wharf, HKL and Hysan: Overall we are neutral on HK Property as it offers only 12% upside. Our top picks are Wharf, HKL and Hysan... (2) xxx

From the AX Thread: http://hongkong.asiaxpat.com/forums/hong-kong-property/ COMMENTS: OffThePeak (17 hrs ago) =========== "Property prices have slumped 8-10% all over hong kong. this is going to continue for the next few months." We are in a "Buyer's Market" now, rather than the "Seller's Market" we saw 3-4 months ago. What's the difference? Buyer's are scarce, and those that do want to buy have plenty of supply to consider. The agent's job is a Buyers market, is to "talk down the Sellers" to a level a buyer is willing to pay. That means property tends to trade on the "Bid" side of a the Bid/Offer spread, because few buyers are willing to pay up, unless it is a special property. I reckon this will continue as long as the factors making the environment look negative continue. What are those Negative factors: + Banks have pushed up their spreads by almost 50 bp (0.50%), + The government has imposed severe limits on LTV lending percentages + The govt has imposed an "anti-speculation tax", taking the ST traders out + The govt has promised to flood the market with supply, to bring prices down + HK's Hang Seng index is in a bear market + Globally, there is a fear of a "double dip" or worse + China is slowing down and tightening credit All these negative factors will not last forever, and I think they will fall away one by one. How far will the market slide? I can see 10-15% off the top, but I think predictions of a 25-30% slide may well be excessive. I am seriously considering buying a small portfolio of HK Property stocks if the HSI falls to 15,000, where I would expect important support to reside. Those stocks are already anticipating a larger correction than we may see, and you can achieve dividend yields in the region of 5%. And that will go up, if the HSI falls to 15,000. Oly88 (16 hrs ago) ====== gdep, I think you have summed it up pretty well. And I do expect the price of properties to drop slightly in the near future, but I think they will increase again shortly because 1) I don't see Greece failing, and the economies in Europe/elsewhere are strengthening, and 2) high inflation and low interest rates. My high school economics teacher already told me that when inflation is higher than interest rates, then it makes sense to make loans. Having said this, the property market here is partly speculative (though the government has reduced this), so it may drop considerably if the people think it will. I am interested in hearing more about property stocks. Can anybody give some information? It's something I have never considered. Thanks. ecareken (5 hrs ago) ======== Things are currently not all too rosey for the main developers here, but many (like 0017) are holding vast amounts of properties yet to be developed. http://www.thestandard.com.hk/news_detail.asp?we_cat=2&art_id=115695&sid=33903317&con_type=1&d_str=20110930&fc=7 Loyd Grossman is Miss Venezuela (4 hrs ago) ============= Have been buying small chunks of Henderson Land (0012). Price-to-book value now 0.51 (ie for 51 cents you get $1 of value). Pretty damn cheap if you ask me for such a solid company. OffThePeak (20 secs ago) ========== Yeah, Loyd. When the mood is universally gloomy (as now), and the negative fundamentals are more than reflected in prices (as now, with the average HK developer share trading about 40% off its High of the year), then it may be time to buy. We may start this afternoon, and then pick up more, much more, if the Hang Seng Index falls to our target of 15,000. I can mention what we buy, if people are interested. Does anyone have links to reports showing the NAV's of HK Developers?

Hong Kong Property Developers - shares thread Is it time to start buying? ============================= "When the mood is universally gloomy (as now), and the negative fundamentals are more than reflected in prices (as now, with the average HK developer share trading about 40% off its High of the year), then it may be time to buy." - OTP on AX : AX-Devl-thread :: Hang Seng Property Index : 10/14/11: - 1.385% / $23,679 HKD /source: http://www.bloomberg...?ticker=HSP:IND Possible Prop Longs $-Price : HighPr -% off : $-Div. : Yield% : PER: post HSI =/ HangSeng: 17,636 : 24.98k-29.4% HK01=/ CheungK. : $84.90 : 137.6 - 38.3% : $1.061 : 1.25% : 9.17 : HK04=/ WharfHd. : $39.25 : 63.80 - 38.5% : $0.718 : 1.83% : n/a- : HK10=/ HangLGp : $39.95 : 54.95 - 27.3% : $1.138 : 2.85% : n/a- : HK12=/ Hender.L : $36.05 : 61.50 - 41.3% : $0.598 : 1.66% : n/a- : HK14=/ HysanDev : $24.50 : 39.45 - 37.9% : $0.293 : 1.22% : n/a- : HK16=/ Sun HKP : $90.00 : 147.0 - 38.8% : $4.797 : 5.33% : 10.3 : -p#13 HK17=/ NewWrld : $07.56 : 17.98 - 58.0% : $0.000 : 0.00% : n/a- : HK83=/ SinoLand : $10.48 : 18.90 - 44.6% : $0.700 : 6.68% : 14.5 : HK101/ HangLPr : $23.90 : 40.50 - 41.0% : $1.080 : 4.52% : n/a- : HK480/ HKResrt. : $02.70 : $5.50 - 50.9% : $0.220 : 8.15% : n/a- : HK635/ PlaymHd : $02.25 : $3.13 -28.1% : $1.000 : 4.44% : n/a - : HK917/ NWChina : $01.95 : $3.24 -39.8% : $0.060 : 3.08% : n/a - : === === LINKS: /GeoExpat- :: http://hongkong.geoe...read265938.html /AX thread- :: Adv Charts :: http://www.advfn.com...hp3?id=26024813 The Big 3- :: HK-1 : HK-16 : HK-101 : Bellwethers Centaline :: http://hk.centadata.com/cci/cci_e.htm Link here- :: http://tinyurl.com/HKpropShs

Typical classic CLOSE MINDED comment: "I admit I haven't looked at the videos / links because,... I know they are nonsense" I think you should be embarrassed posting such a comment on GEI.

Were you happy with the prices achieved ?

That's possible. From the AsiaXpat thread: "property prices have slumped 8-10% all over hong kong. this is going to continue for the next few months." We are in a "Buyer's Market" now, rather than the "Seller's Market" we saw 3-4 months ago. What's the difference? Buyer's are scarce, and those that do want to buy have plenty of supply to consider. The agent's job is a Buyers market, is to "talk down the Sellers" to a level a buyer is willing to pay. That means property tends to trade on the "Bid" side of a the Bid/Offer spread, because few buyers are willing to pay up, unless it is a special property. I reckon this will continue as long as the factors making the environment look negative continue. What are those factors: + Banks have pushed up their spreads by almost 50 bp (0.50%), + The government has imposed severe limits on LTV lending percentages + The govt has imposed an "anti-speculation tax", taking the ST traders out + The govt has promised to flood the market with supply, to bring prices down + HK's Hang Seng index is in a bear market + Globally, there is a fear of a "double dip" or worse + China is slowing down and tightening credit All these negative factors will not last forever, and I think they will fall away one by one. How far will the market slide? I can see 10-15% off the top, but I think predictions of a 25-30% slide may well be excessive. I am seriously considering buying a small portfolio of HK Property stocks if the HSI falls to 15,000, where I would expect important support to reside. Those stocks are already anticipating a larger correction than we may see, and you can achieve dividend yields in the region of 5%. And that will go up, if the HSI falls to 15,000.

http://www.youtube.com/watch?v=WIo2SFUjjuA The Great Year is a compelling documentary that explores the possibility that the fall of ancient civilizations around the globe, and the rise of modern civilization, might be related to our Sun's motion around a companion star. The film examines evidence that ancient civilizations may have known of this celestial cycle and that our Sun may indeed display the characteristics of binary motion. Narrator : James Earl Jones This is a serious film from serious people. Below is the producer Walter Cruttenden, 60, is a financial markets entrepreneur having founded and served as CEO of two innovative investment banking and brokerage firms; Cruttenden Roth (now Roth Capital, one of the largest providers of equity capital to emerging growth businesses), and E*Offering, formerly part of E*Trade Securities. Cruttenden is also an author of books and films on history and astronomy.

Aware of this risk, I bought extra food over the weekend... ...and that has proven to be a good thing. Hong Kong shuts down in T8 Signal The City is mostly shut down today: Schools are closed, buses are not running, restaurants and shops are shut. It may clear up later, but I am happy I took the precaution a few days ago to load up on dried food. === === === (My flat is not far from the tall building at the center of the photo.) Hong Kong Closes Stock Market as Typhoon Passes By Fion Li and Stephanie Tong - Sep 28, 2011 Victoria Harbour is seen during a Typhoon 8 Signal Warning as Typhoon Nesat passes close to Hong Kong. Photographer: Ed Jones/AFP/Getty Images Hong Kong shut financial markets, schools, courts and government offices, raising its highest storm signal in two years as Typhoon Nesat brought gale-force winds and rain into the city. The typhoon, which killed at least 20 people in the Philippines, was centered about 350 kilometers (217 miles) south-southwest of Hong Kong, and is heading toward China’s Hainan Island, the city’s observatory said. The No. 8 gale signal will remain for most of the day, it said. “It’s deadly quiet outside, like a dark, wet, ghost town,” said Gavin Parry, managing director of Parry International Trading Ltd., an equity trader, in Hong Kong. “There are few mini buses, no public buses and taxis are trawling for passengers to pay an extra HK$100 fare given the typhoon.” Gale winds swept the city, home to the world’s fifth- biggest equity market, with trees collapsing, scaffolding falling off buildings and a vessel crashing against a pier. All bus, ferry and trams services are suspended, and the Hong Kong Exchanges & Clearing Ltd. canceled the morning trading session. “Nesat is closest to Hong Kong now,” the observatory said in its statement at 9:45 a.m. local time. “Gale winds are expected to persist over Hong Kong.” /more: http://www.bloomberg.com/news/2011-09-28/hong-kong-typhoon-8-signal-raised-trading-halted.html

I bought Gold/GLD today* (Thursday) in the extended hours session at: $154.78 That is below Wednesday's: Close: $156.22 - $4.41 / % Change -2.75% / Volume 21,775,951 Open $160.73 / Day High $161.29 / Day Low $155.56 That is equivalent to: $154.78 x 10.29 (21d MA of ratio) = $1,593 Using $1580 / 10.29 = GLD-$153.55 *A small number of Oz. - hedging Calls sold two days ago at a higher price

LOL. I point out that you are not managing the price risk as well as you could, and you say: "I don't give a stuff." Well perhaps, I should put it the same way, "I don't give a stuff" about your theoretical risks inherent in owning Etf's rather than physical (at this stage.) So far, they have been totally theoretical, and the Options on GLD, SLV, UGL, and ZSL have proven to be great tools in managing the very real price risk inherent in Precious metals. By the time I see some loss from "etf risk", I am likely to have parked enough of my investments into physicals that it will not matter, because I will be miles better off. It isn't a "trading competition" (there is no prize!) It is just a well-documentated illustration that Buy & Hold can be beaten by a disciplined* options trading approach. I would appreciated it that you would acknowledge that this is the case. You are worrying about theoretical risks while I am managing real price risks. "...your trading buddies..." You are listening to people ("Your Buy and hold buddies"?) who have vested interests in getting people to hold onto their gold, while I am using the ideas of experienced and successful traders to sidestep or minimize opportunity losses on the big price swings. Their knowledge has proven useful, although I do not expect all their ideas to work - and I use them in my own way. === === === *"Disciplined trading": from the Beating B&H thread: I am using options primarily as a way to control price exposures (!), not to take on excessive and dangerous gearing. For someone who, for example, was comfortable investing $10,000 in silver - that's about 300 ounces at $33, or about 300 SLV Call contracts - to plow the whole amount into Call options, would be a real mistake. I am not trading that high-risk way at all. If you wanted to buy SLV-Calls costing $5, an option (covering 100 shares) would cost $500, and theoretically you could buy 20 of them. That is not what I am doing or suggesting anyone else here do. In my method, the trader would buy 3x contracts costing $1500, and sit with $8,500 in cash, waiting to see if he wants to exercise the 3 contracts. And he should also check his option strike price, and see if the cash he holds is enough - if not, then risk control becomes even more critical. Traded in the way I am using them, options are much less risky than putting the whole amount of cash into calls. This is only one of several cautions I would want to make if I was intending to ADVISE people - which I am not - I want people to LEARN from my ideas, but to take full responsibility for their own trades. Thanks for pushing me a bit to make this important point - in case it was not obvious to some here.

It sounds interesting. Keep us posted on progress. Thanks for the links

Okay. But you could have done more using options. My Beating B&H portfolios, are more than 50% ahead of Buy & Hold. At the point were I hit 10,000 physical oz., the lead will be unassailable. I could get there instantly, but am using options until we see a lower price.