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TMFAleph1 (94.87)

Don't Sell Gold Before These Bankers Buy It

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10

June 30, 2010 – Comments (10) | RELATED TICKERS: ABX , GG , GLD

We may be witnessing the start of a significant shift that is bullish for gold. I welcome all constructive/ informed feedback.

Alex Dumortier

10 Comments – Post Your Own

#1) On June 30, 2010 at 8:20 PM, 100ozRound (29.41) wrote:

There's some good info in there.  Thanks for pointing it out!

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#2) On June 30, 2010 at 8:50 PM, Starfirenv (< 20) wrote:

Wow, John Paulson of Paulson & Co. Aren't they the guys on the hot seat with GS for hand picking and gift wrapping the most toxic subprime $hit available, gift wrapping and "slinging" this "designed to fail" mess on the unsuspecting? Wow 3.7 BILLION personally. I'm impressed. All I want to know is how he sleeps. You're a better stooge than Fool, but I understand, as Paulson & Co. COO is one of your Board of Directors. Zero cred for you.How do you sleep?

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#3) On June 30, 2010 at 9:03 PM, blesto (31.65) wrote:

I'm not totally sure how to inerpret it, but this was an interesting chart I found, going back almost 300 years, Adjusted for inflation supposedly.

Image and video hosting by TinyPic" target="_self">National Geographic

Enlarge

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#4) On June 30, 2010 at 9:28 PM, TMFAleph1 (94.87) wrote:

Paulson & Co. isn't on any 'hot seat' for its role in the ABACUS transaction. Neither John Paulson nor Paulson & Co. have been accused of any wrongdoing in this matter and I'd be curious to see anyone try to prove that anything they did was unethical.

As far as I know, John Paulson has no trouble sleeping at night. As for me, when I do have trouble, it has nothing to do with whether or not Paulson & Co's COO is on the Board of The Motley Fool.

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#5) On June 30, 2010 at 11:59 PM, rwebankrupt (79.51) wrote:

You welcome all constructive/ informed feedback?  How come everytime I read your posts if someone gives you "feedback"  TMFMarathonMan trashes it.

 John Paulson must be pizzed the financial reform legislation will not control the silver and gold derivatives market for him..........

 

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#6) On July 01, 2010 at 12:31 AM, ChrisGraley (29.95) wrote:

Screw the bankers, sell it to me.

I'll buy all the Gold or Silver that you want to sell. 

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#7) On July 01, 2010 at 12:45 AM, TMFAleph1 (94.87) wrote:

I welcome constructive/ informed feedback.

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#8) On July 01, 2010 at 1:21 PM, rwebankrupt (79.51) wrote:

Here is something that you probably know but worth mentioning

It is no longer illegal to trade many uncleared swaps. Violating is now risk-free and legal. Jun 28, 2:48 PM Here is a loophole one should consider before they double down

[Name Withheld], our concerns are summarized below. Please tell us whether or not these serious flaws can be addressed.

The central tenet of Title VII of the Dodd/Lincoln bill regulating OTC derivatives is the requirement that, except for the end user provision, all standardized swaps must be cleared and exchange traded. Within that regulatory infrastructure is the subsidiary point that to be exchange traded, a swap must first be cleared.

However, the substitute amendment contains a major loophole – there is no consequence for counterparties who enter into uncleared swaps even after a finding by the CFTC or SEC that the swaps must be cleared. SA 3739 does not prohibit the use of uncleared swaps and, even more egregious, expressly states that no swap can be voided for failure to clear. SA 3739 needs to be amended to: 1) prohibit the use of uncleared swaps that are not otherwise exempt from regulation, e.g., the end users provision; and, 2) make swaps that do not clear be unlawful and unenforceable.

While page 566 of SA 3739 requires counterparties to submit all swaps for clearing, it does not address the issue of a swap that is submitted but rejected by a DCO. There is already a major problem with existing swaps clearing facilities rejecting fully qualified swaps participants from clearing. The explicit authorization to evade clearing establishes a perverse incentive for clearinghouses to be even more discriminatory in accepting swaps for clearing.

Moreover, the substitute amendment, now on the Senate floor, prohibits the CFTC from forcing a DCO to accept a swap for clearing (see page 574). Since clearinghouses have no incentive to list a swap that regulators deem must be cleared, and there is no consequence for trading an uncleared swap, counterparties are likely to exploit this loophole and continue to use uncleared swaps in an unregulated marketplace.

Further, Section 739 states that a swap that does not clear may not be deemed void or unenforceable. The lack of an express ban on uncleared swaps, coupled with Section 739, converts the clearing requirement into a mere suggestion. In fact, since Section 739 emanates from the highly deregulatory Commodity Futures Modernization Act of 2000, there is precedent for a court to rule that a swap that violates the mandates of the Commodity Exchange Act may, nevertheless, be enforced.

Best regards,
[Name Withheld]

 

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#9) On July 04, 2010 at 6:28 PM, MattCohn (81.88) wrote:

On the other hand, if the bankers become heavy sellers before you get out, the price could drop by 70 – 92%.

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#10) On July 07, 2010 at 4:14 PM, TMFAleph1 (94.87) wrote:

@MattCohn,

I like the precision of your range. How did you come up with 92%?

Alex D

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