Posts by "qiman"

Now this stress test is more like it!

"Chinas banking regulator told lenders last month to conduct a new round of stress tests to gauge the impact of residential property prices falling as much as 60 percent in the hardest-hit markets, a person with knowledge of the matter said."
http://www.bloomberg.com/news/2010-08-04/chinese-regulator-said-to-tell-banks-to-test-for-60-drop-in-home-prices.html

Like I thought could very well happen, CL has jumped considerably this morning. If it goes much higher then it could end up creating a short squeeze, and push into levels closer to what it saw in june, a critical juncture now.

Things could take a violent turn for the worse in Greece, affecting European stability to some degree:

Greek security forces have warned of a wave of violence reminiscent of the terror that stalked Italy in the seventies after urban guerillas threatened last week to turn the country into a "war zone".

"Greece has entered a new phase of political violence by anarchist-oriented organisations that are more murderous, dangerous, capable and nihilistic than ever before," said Athanasios Drougos, a defence and counter-terrorism analyst in Athens.

The threats came from a guerrilla group called the Sect of Revolutionaries, as it claimed credit for the murder of Sokratis Giolas, an investigative journalist. Giolas was shot dead outside his Athenian home on 19 July, in front of his pregant wife.

The gang promised to step up attacks on police, businessmen, prison guards and "corrupt" media and, for the first time, threatened holidaymakers.

"Tourists should learn that Greece is no longer a safe haven of capitalism," its declaration said.

"We intend to turn it into a war zone of revolutionary activity with arson, sabotage, violent demonstrations, bombings and assassinations, and not a country that is a destination for holidays and pleasure."
http://www.guardian.co.uk/world/2010/aug/01/greece-war-zone-revolutionaries-tourists

Gero also noted that investors have recently been rolling over into December contracts, showing long-term views of inflation and bullishness in gold, leading to record trading volume of contracts.

Comex gold futures contracts reached a record volume of 424,316 contracts earlier this week, according to the CME Group. The previous record was 409,842 on May 25, 2010.

"People are trying to add to holdings of gold at a sale price," said Zachary Oxman, managing director at TrendMax Futures, "and I think you are seeing some long-term players adding to their net long holdings at a reduced price." http://www.marketwatch.com/story/gold-rises-after-us-growth-report-2010-07-30

Regarding the question from Wasup, here is a post I made in this same thread on July 14th, I repost it here and it offers one opinion:

"An upcoming change to Japan's margin trading regulations will likely support the yen in the coming weeks. Some analysts estimate margin trading comprises as much as 20% to 30% of yen trading liquidity here on any given day.

Last year, the Financial Services Agency announced it would set limits on how much foreign-exchange investors can buy on margin, in order to protect "Mrs. Watanabe" - no relation to the Your Party leader. The common surname has become the collective moniker for Japan's retail investors, in a country where housewives are often in charge of family budget and investment decisions.

The plan calls for the leverage cap to be set at 50 times the amount of principle cash committed starting in August, and then further cut to 25 times next year.

The rule change came after a spate of local media reports about some of these housewives losing huge sums, trading on margin hundreds of times the minimum amount they were required to invest up front to open their accounts.

Tohru Sasaki, chief foreign-exchange strategist for Japan at J.P. Morgan Securities in Tokyo, estimated in a report this week that "Mr. and Mrs.Watanabe" hold about 6 trillion yen ($67 billion) of short-yen positions, which he said is "almost the same level as the peak in 2007."

While Sasaki doesn't expect a flood of unwinding, he does expect some yen-buying stemming from the new regulations, as the Watanabes unwind their positions to comply with the new rules."
http://www.marketwatch.com/story/short-term-yen-support-is-real-2010-07-14?link=kiosk