Nevyspytateľný august....

V časoch kreditných kríz je obvykle hotovosť kráľom, avšak zlato cisárom.

At LEAST THE weather here in London suits the markets. More like October than August, the constant drizzle is broken only by chill gusts of wind, rattling the windows like a late autumn gale.


Unseasonable? Yes – even for a British summer! But it's perfect weather for losing your shirt as yet another bubble turns to bust.


Just like the Bankers Panic of 1907, the Great Crash of 1929...Black Monday in 1987...and the "mini-crash" triggered ten years later by the Asian Crisis...any trader bored of tanning his hide on the Cote d'Azur can now come home to find October in full swing. And if he's seeking a snow-white pallor for autumn, he can turn white as a sheet within minutes in Mayfair, watching his funds under management shrink with each breath.


Wednesday 15th August marked the deadline for hedge-fund investors to withdraw what's left of their money before the third quarter ends 45 days from now. Tuesday saw one fund, Sentinel Management Group, ask the US authorities if it could "allow it to halt client redemptions until it can conduct them in an orderly fashion." No dice, said the CFTC to the puny $1.6 billion fund. A disorderly fire-sale might now be expected.


Further north, in Canada, two trusts said that they'd failed to sell new securities needed to refinance loans that are due for repayment. A bank had also refused to provide liquidity, according to news reports, making August '07 a real crunch for those trusts, if not yet for all of their peers.


"Everyone always waits until the last second to get out, and [Wednesday] is the last second," said Mike Hennessy of Morgan Creek Capital to Reuters today. But in fact, redemption notices began "piling up weeks ago" says the newswire. The proximate cause remains the collapse of Bear Stearns' two highly-geared mortgage bond hedge funds in June. Those wipe-outs sparked the current turmoil in world financial markets.


"The longer this credit crunch goes on, the more likely that gold will attract safe haven buying," reckons John Reade, head of metals trading at UBS in London. In the short-term, "we do not expect institutional buying of gold to trigger any sharp move higher; we suspect that position closing and de-leveraging will be the focus of these investors' attention.


"[But] any move to gold will probably come from private investors. As such, the listed exchange-traded funds in gold will signal this interest."


Confirming the move into gold by a growing number of anxious private investors, the StreetTracks gold ETF reported a record holding of more than 510 tonnes on Tuesday. In London, the gold fund run by ETF Securities saw a trebling of holdings last week alone. According to AFX News, some 200,000 ounces of gold was bought in one day!


But it's not only private investors who are choosing solid gold bullion over paper promises right now. The last two weeks have seen a huge surge in gold leasing rates – the price charged by the major members of the London Bullion Market Association to lend out their gold. Put in plain English, the banks of ScotiaMocatta, Barclays, Deutsche, HSBC, J.Aron & Co, J.P.Morgan Chase, the Royal Bank of Canada, Société Générale and UBS have become less likely to put their gold at risk by lending it out.


After all, in a credit crunch, cash is deemed to be king. In which case, gold owned outright has just been crowned emperor.


Source: GoldS

16.08.2007