Author: shyam

Gold getting fingered

One Rupee coin (dated 1285 AH), 12 ounce silve...

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Gold is down 6.4% to $1,552 an ounce, taking its losses over the past 4 days to 13.8%. It has shed 19% since hitting its intraday high of $1,920 just three weeks ago. Silver is also getting hammered. The metal is down 13% on Monday to $26.95 an ounce, taking its 4-day slump to 32%. Both metals were even lower into the Asian market close.

Investors are scrambling to raise cash across markets and asset classes as traders fret that a lack of progress in finding a solution to contain the euro-zone fiscal crisis threatens the health of the global economy.

Source.

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China to ONGC: bu pao

The South China Sea

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With gas prices at the pump close to $6 to a gallon and a bulk of its energy being imported, India is out exploring for oil. However, it has hit a wall in its efforts, a Chinese-wall, if you will:

India is being pulled into a complex and increasingly tense territorial dispute in the South China Sea, with China repeatedly warning ONGC, the Indian state oil company, that its joint exploration plans with Vietnam amount to a violation of Chinese sovereignty.

The South China Sea, which Beijing claims almost in its entirety, is thought to be rich in oil and gas and is one of the world’s most important shipping routes. And is increasingly becoming one of the region’s major potential flashpoints.

ONGC’s overseas arm, ONGC Videsh, accounts for much of India’s investment in Vietnam. It operates one gas field—Block 06.1 in the Nam Con Son basin off Vietnam’s south coast—in a joint venture with TNK-BP and PetroVietnam, which China has not protested over.

While the world is busy with the old world’s problems, this has the potential to turn real ugly real fast.

Read more here.

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Some HFT strategies to be banned in EU

“There are particular automated strategies that have been identified by regulators which, if carried out, are likely to constitute market abuse,” the European Commission document says. “Further identifying abusive strategies will ensure a consistent approach in monitoring and enforcement by competent authorities.”

Among other strategies, the Brussels-based commission specifically targets:

  • Layering: in which traders place large orders they have no intention of allowing to go through,
  • Quote stuffing: in which investors seek an advantage by delaying data feeds, and
  • Spoofing: in which market participants try to trick other computers into making decisions that can be exploited for profit.

Read the Bloomberg article here.

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Hedge-fund manager calls Fed’s policy ‘superstition’

John Hussman says the only basis for further Fed action is superstition in the absence of either fact or theory.

Effective policy acts to relieve some constraint on the economy that is actually binding. Effective policy has some “transmission mechanism,” where changes in the policy target can be expected to translate into decisions that improve the allocation of resources and the level of activity in the economy. Effective policy is also preferably grounded in historical evidence that supports its effectiveness, or at the very least does not contradict the action. At present, the policy menu advocated by Ben Bernanke has none of these advantages.

Read more here.

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