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M. Hollande has won the French presidency and fear is now widespread, that with the anti-bailout message sent by the Greek electorate, who voted this weekend too, the house of cards built by the European Central Bank may collapse. It is hard for us to see how this may take the markets by surprise, but….what do we know? We still remain long gold
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If we have to summarize what drove the action last week, we will say it was the speculation over an upcoming (perhaps in June) Growth Pact in the Euro-zone. That was all. That did the trick. There is really nothing, absolutely nothing concrete. And no, we don’t think the market is speculating on a soon-to-come Quantitative Easing Version 3. But
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(Originally posted on April 23, 2012, at www.sibileau.com ) Because simplicity is a virtue, we decided to skip a week and write our comments today. Why? There had really not been any developments during the past two weeks that would have made us change our views. To be certain, even today we think nothing really fundamental has changed. What has been
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As Easter approached, we began to see a timid sell off in US stocks (but not so timid in Europe or Canada), in corporate debt, and in Treasuries. Treasuries later in the week rallied, but if you ask, we would see them still in a downtrend. This downtrend began with the implementation of the Fed’s latest currency swaps, at 50bps, in mid December
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Last week we had suggested that the strength of the Euro (by strength, we mean a Euro above $1,30) could be based on the fact that the liquidity lines extended by the European Central Bank were collateralized. As the sovereign risk of Spain,Italy and Portugal had deteriorated, so had the value of their sovereign debt diminished and, as this debt had
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Please, click here to read this article in pdf format: March 25 2012 During the past week, we think, we witnessed some interesting developments. In our previous letter, we had discussed what was the KreditAnstalt event of 1931. We saw a striking similarity with the current status quo because just like then, we now have sovereigns at the brink of default
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Please, click here to read this article in pdf format: March 18 2012 We are back from Washington DC and realize that we could choose different titles for today’s letter. Let’s try a few… Title No.1: “The market proved us wrong” Indeed, we have been, and continue to be , long term gold bulls. We have been buying dips in
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On Friday, out of the office and away from the screens (we are currently visiting the US capital), we were spared the enormous volatility in gold. Gold tried to break through the lows made since a public institution liquidated bullion on Februrary 29 th but closed making a higher high (since the sell-off, of course). This, in light of a jobs report
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Please, click here to read this article in pdf format: March 5 2012 Let’s start by confirming that we remain long-term bullish of gold, near-term neutral of stocks (and long-term bearish of stocks), bullish of corporate credit risk, neutral of sovereign risk (European and US). We are neutral on the EURUSD (but if we had to make only one trade
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Click on the link to read this article in pdf format: February 19 2012 Today, we want to follow up on the dynamics of the Euro. We go back to our comments since the beginning of 2012, when we suggested that the logical result of the monetary policy the ECB is embarking on is an increase in the velocity of circulation of the Euro. We also wrote that