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>From: lepatron@xxxxxxxxxxxxxxxxxxx
>To: trdoptions@xxxxxxxxxxx
>Subject: Charles Peabody and some scuttlebutt
>Date: Fri, 23 Jul 1999 23:34:37 -0400
>
>Le Metropole members,
>
>I spoke with Charles Peabody today and I want to
>convey his thinking to you because there is no hotter
>bond analyst around than Charles. In addition, the
>Café has a new webmaster who is devising a way to get
>Charles's charts up at the Hemingway Table so that you can
>see his work in the near future. In the meantime, a bit
>of razzle dazzle.
>
>We have been telling Café members for weeks that
>something is very amiss in the financial arena and
>Midas has expressed his opinion that it is part of the
>reason for the gold market manipulation. As Murray
>Pollitt says, when you go hunting and all of a
>sudden the little animals come running of the bush,
>you know there is something ferocious that has scared
>them out. That is clear, but you just do not know
>what it is - at least for awhile!
>
>Well, Charles points out in a Cafe note, that 10 year swap
>spreads just went to 10 year highs. This term was new
>to me but Charles said in the fixed income world it
>signifies liquidity fears. The spreads are higher now
>than at any time in the 90's. You may check out the
>dramatic move of this spread by going to this chart:
>
>http://cognite.com/swapspread/SwapSpread.htm
>
>Down and dirty for the rest of this conversation.
>"Little Bear", my dog that you see at the
>James Joyce Table, is whining to go for a summer
>night, Texas walk.
>
>1) The word in the bond world today is that there
>is some big financial event about to unfold that
>will shake up investor confidence to some degree.
>Today, the South Korean market was down 7% and we
>also have heard of rumors of panic type buying of
>Hong Kong dollars. This "event" that is coming may
>be related to "Daewoo", the South Korean chaebol,
>that is supposedly having difficulty. This "hidden
>financial problem" that Midas has discussed for months
>may also be of a different nature. Hard to say.
>
>2) Corporate Treasurer's are rushing to the issuance
>window. Charles Peabody said they listened to Greenspan
>and word is spreading that interest rates are going up
>and they want to raise money before the credit window
>on money at this level closes.
>
>3) The widening swap spreads are telling us another
>LTCM may be right around the corner. How so? Interest
>rates are going up. Credit spreads are widening and loan
>originations are declining. The probability of that
>is 1%. That kind of incredibly low probability is
>what blew up Long Term Capital Management! There is
>a logical reason the probability is so low. Almost
>always, when credit spreads widen, there is a flight
>to safety and bonds go up in price, not down, like the
>last two days. As a result, some "black box" hedge fund
>trading operations may be in deep trouble again.
>
>YES, all of this reinforces our gold market manipulation
>claims - BIG TIME. Today, oil was up some 60 cents, the
>CRB was up over 2 points and about to make multi-month
>highs, base metals in London were all very strong,
>beans and corn were almost limit up, silver was up,
>bonds were down, etc. YET, gold goes $1.30 lower with
>Goldman Sachs a late seller.
>
>I am not going to belabor Midas' and GATA's views,
>but how clear can this be about what this crowd is
>doing and has fostered. Along that line, more people
>called me today than ever asking how could gold -
>priced in the $250's - not go up when it is
>plain as day that times are changing and it is so
>cheap?
>
>You already know what I told them. On a positive note,
>we are stepping up our effort to advise Congress of
>the gold market manipulation and have more Congressional
>"ears". It is now clear to GATA that the Clinton
>administration, The Tony Blair administration in England,
>the bullion dealers, and, most likely, some gold
>producers are all "colluding" to hold down the price of
>gold to some degree.
>
>GATA has no political axe to grind, but we are
>shifting strategy to become involved in the political
>arena to a much greater degree and it began with the
>document/letter to Senator Gramm. We will let you know
>more about this in the weeks to come. But, in essence,
>it is a "take no prisoners" philosophy. Today's gold
>action is just one example of the lengths the other
>side will go to suppress the price of gold to protect
>all their other financial interests. This devastation
>must end. "This is War!". Period.
>
>The response to the letter/document Senator Phil
>Gramm, Chairman of the Senate Banking Committee was
>a quiet smoldering one at first, but today, responses
>about what we revealed in that letter have triggered
>revelations that are politically "explosive". We have
>gone to Congress again and disclosed what we know to
>them. This is not Café hype, but please do not ask
>about the nature of what we know because the next time
>we hope that you will hear about this will be from
>someone in "Congress" itself.
>
>All of Charles Peabody's commentary ( there is more )
>can be viewed at the Hemingway Table.
>
><A HREF="http://www.lemetropolecafe.com/scripts/products.cfm";>Le Metropole
>Café </A>
>
>All the best,
>
>Bill Murphy
>Le Patron
>
>
>
>
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