|
PureBytes Links
Trading Reference Links
|
here is an interesting article from a south african newspaper.
>Subject: Jonathan Rosenthal - Martin Armstrong the bear is deep in the
>woods
>Date: Mon, 4 Oct 1999 09:47:03 -0400
>
>
>Great coverage from savvy South African journalist,
>Jonathon Rosenthal.
>
>From Business Day, Cape Times, October 1st, 1999.
>
>INSIDE MINING - Jonathan Rosenthal
>
>Martin Armstrong the bear is deep in the woods
>Who is Martin Armstrong, what is Princeton Economics
>International and what does it matter anyhow? These
>are probably normal and healthy responses in the
>colonies when we learn that another US hedge fund
>manager is up on fraud charges.
>
>So what if this one-time financial guru and darling
>of the market took about $1 billion from Japanese
>investors and now has about $46 million left in
>the bank. So what if he gave his depositors false
>accounts and now has three regulatory agencies
>from two countries baying for his blood.
>
>In the new economic order hedge funds going belly up
>in the US are almost as common as cellphone thefts
>down here.Except that quite a few prominent people in
>the gold market are convinced that Armstrong was
>really short on gold. Depending on who you ask he
>was short anything from 300 tons to 800 tons. And
>some believe that he sold short at about the $260
>to $265 mark and has incurred further hair-raising
>paper losses of $30 an ounce over the past few weeks.
>
>And if Armstrong really was that short of gold, a
>point Princeton Economics denied in a statement it
>released last week, it could have profound
>implications for the gold price. The court-appointed
>managers now trying to salvage his fund could be
>forced to cover the position through buying up 300
>to 800 tons in an ever-tightening market.
>
>Brett Kebble, the deputy chairman of JCI Gold, said
>he believed Armstrong had run up a short position
>of 800 tons."Martin Armstrong has been bearish about
>gold and has been writing furiously about what a
>terrible investment it is. He has been short on
>gold for some time," Kebble said.
>
>The Gold Anti-Trust Action Committee, a campaigning
>organisation that argues the gold price has been
>the victim of massive manipulation by powerful
>financial interests, believed Armstrong had borrowed
>or was short to the tune of 746 tons.
>
>Others suggested that while Armstrong was likely to
>have gone short, as he repeatedly wrote opinion
>pieces and argued that the gold price was likely
>to fall to $200 an ounce, they found it hard to
>believe that his short position could be so large.
>
>Garry Mead, the head of reasearch at the World Gold
>Council, said he would be surprised to find that
>Armstrong’s fund had run up a position of that size.
>
>Michael Coulson, head of mining research at Paribas in
>London, said he would not be surprised to find
>Armstrong short but suggested that a position of no
>more than 300 tons was more realistic.
>
>The US Commodities Futures Trading Commission, one of
>three watchdog bodies that filed legal action against
>Armstrong, refused to comment on his position.
>The Securities Exchange Commission was more helpful
>but had no idea what positions he might have taken
>in the commodities market.
>
>The haggle about the size of Armstrong’s position
>is not simply an esoteric search for truth, but could
>play a large role in determining how far the rally
>in the gold price could go.
>
>Gold Fields Mineral Services (GFMS), the commodities
>research group, estimates that the total size of
>the net speculative short position in the market
>is probably not much more than 400 or 500 tons.
>That’s not counting the several thousand tons of
>gold that producers have sold forward. GFMS admits
>that if the short position is significantly larger
>than it believes it to be, then gold could rally to
>$400 or even $500 an ounce.
>
>If Armstrong is indeed short of gold, even by only
>300 tons, then it implies that the GFMS figures
>underestimate the short position hanging over the
>market. This then opens the door to some pretty
>wild assumptions as to the size of the total position.
>Kebble believes it could be as large as 4,000 tons,
>which implies a large number of funds are in a tight
>spot right now.
>
>If that is the case then there will simply not be
>enough gold avilable on the physical market to
>cover those positions. Huge hedge funds would be
>unable to meet their margin calls as the price rises.
>
>The ensuing crisis would make the collapse of Long
>Term Capital Management look like a walk in the park.
>
>
>
>
>
>
>
>
______________________________________________________
Get Your Private, Free Email at http://www.hotmail.com
|