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Subject: Change of email service-possible posting commentaries you missed
Date: Sun, 23 May 1999 18:57:03 -0400
X-Mailer: Allaire Cold Fusion 3.1
Le Metropole members,
We have switched our email server as cold fusion problems
in the old one have left many of you without commentary
posting notifications recently.
You may want to check Le Menu carefully the next time
you check into the cafe. Check the Kiki Table and the Dos
Passos Table. Many of you did not receive the
recent David Tice serving and the notication of
the problems of Counterparty Risk Management Group member,
Credit Suisse, so I have included it below.
----------
David Tice has served commentary at the
Hemingway Table entitled, "Increasing Signs of
Systemic Stress". Another must read!
"Latin and South America rocked late in week"
"faltering liquidity conditions - derivative sellers"
"the first inning"
"watch the spreads"
Thoughts from Midas:
We may be at that "hit the fan time"! As David Tice
writes, the signs are mounting. For some time now, the
Cafe's Charles Peabody has warned of a banking stock
meltdown that would come from a non parallel shift in the
yield curve due to "unintended consequences" of the
Greenspan rate cuts of late last year. Charles stated that
the long bond would have a 6% handle. He was one of only
two well known Wall Streeters to publicly state as such at
the end of last year and has also warned of the dymanic
hedging that would take place in the 5 and 10 year notes
once the long bond breached 5.75 yields. David Tice also
has been commenting on these issues.
When I spoke with Charles the other day, he told me that he
felt Alan Greenspan was trying to jawbone the markets once
again, but this time it would not work. He must actually raise
rates to break the back of the market and that is coming.
The point of going over all of this once again is that it is
my opinion that there is actually a mini crisis going on
behind the scenes and it could effect all Cafe members in the
coming weeks and months.
For 6 months now we have alerted you that we have repeatedly
heard that certain bullion dealers have extraordinary financial
exposure due to the size of their gold loans. Bottom line - if
they price of gold were to shoot up dramatically, they might
go belly up. Credit Suisse has been at the top of the list of
those mentioned that are very, very vulnerable.
The Credit Suisse Group is Europe's 6th largest bank. They were
all over the news yesterday. We have been told: that their
operations in Japan have been suspended for unethical behavior,
a Managing Director is being detained and cannot leave the
country, criminal charges are a possibility, they have massive
derivative problems especially in Brazil, and that EMPLOYEES ARE
SHEADING DOCUMENTS FOR THEM ALL OVER THE WORLD.
In other words - an immense scandal.
It is my opinion that the extraordinary Bank of England
announcement is tied to some extent to this scandal
and the precarious position of the other bullion dealer
shorts. Credit Suisse is up to their eye balls in gold loans.
They have been trying to solve their derivative problems
in part by using the practically interest free gold loans.
If the price of gold were to shoot up above $300 to
a great extent, they might be tapioca.
Greenspan, Rubin and many other central bankers know this.
The big seller this past week in the gold pits was Goldman
Sachs. For the first time, WE actually received a report
that they were looking for size in the OTC market. The "fix"
was in this week, big time. GET THAT GOLD PRICE DOWN.
DEMORALIZE THE GOLD WORLD. TAKE NO CHANCES OF ANY KIND OF
REVERSAL.
Thus, we have 20 year lows in the gold price.
However, as David Tice has alerted, the derivative trades
are in danger of blowing up once again. Combine that
potential financial time bomb disaster with the recent public
awareness that the gold market is being manipulated and
we may not be as far away as you might think to a gold price
explosion.
There can be many triggers for that kind of event and we will
cover some of those in future Midas du Metropoles.
While this period has been gruelingly brutal, do not abandon
ship. Our day is close at hand.
<A HREF="http://www.lemetropolecafe.com/scripts/products.cfm"Le Metropole Cafe</A>
All the best,
Bill Murphy
Le Patron
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