RED ALERT/RED ALERT:-Morgan Stanley stops oil trading because they no CREDIT!!!!!

[Mega]

http://www.marketwatch.com/news/stor...F-AB859728E009}

Mike

[jpatter666]

Re: RED ALERT/RED ALERT:-Morgan Stanley stops oil trading because they no CREDIT!!!!!

Try this link: http://www.reuters.com/article/etfNe...13829520080918

SINGAPORE (Reuters) - Energy trading heavyweight Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) withdrew from a half-hour oil trading window in Asia on Thursday after price benchmarking agency Platts placed it under review because of counter-party concerns about its credit status, two industry sources said on Thursday.
The Platts review does not stop Morgan Stanley trading oil, but means that its bids and offers will not be taken into account during the daily half-hour "window" during which Platts assesses prices in over-the-counter oil markets.
Rather than risk a possible public test of its credit acceptance among counterparties in an increasingly anxious oil market, Morgan Stanley asked its brokers in Singapore not to put prices into the Platts system, three brokers with different companies told Reuters.

[jmdpet]

Re: RED ALERT/RED ALERT:-Morgan Stanley stops oil trading because they no CREDIT!!!!!

Fixed link

[Supercilious]

Re: RED ALERT/RED ALERT:-Morgan Stanley stops oil trading because they no CREDIT!!!!!

http://www.marketwatch.com/news/story/morgan-stanley-withdraws-platts-oil/story.aspx?guid={9A6CC2B3-8ED1-4388-A97F-AB859728E009}

Mike

Do you remember what I was saying at the oil bubble thread?

Next to follow is the insolvency of all ETF/ETN commodities paper because investment in commodities EFT/ETN's is as safe and profitable as investing in mortgage CDO's in 2006

[Andreuccio]

Re: RED ALERT/RED ALERT:-Morgan Stanley stops oil trading because they no CREDIT!!!!!

Do you remember what I was saying at the oil bubble thread?

Next to follow is the insolvency of all ETF/ETN commodities paper because investment in commodities EFT/ETN's is as safe and profitable as investing in mortgage CDO's in 2006

Just to be clear, do you mean GLD, SLV, and CEF?

[BobinSFCA]

Re: RED ALERT/RED ALERT:-Morgan Stanley stops oil trading because they no CREDIT!!!!!

Just to be clear, do you mean GLD, SLV, and CEF?

I can't speak for the other EFTs, but I always thought GLD was secured by physical gold. Perhaps I am wrong?

For many of us who are investing retirement money, this is one of the few avenues for us to buy gold with our 401k's. I would be very interested to learn more if there is a high risk of EFT failure for these. Perhaps I am misunderstanding the post.

Thank you in advance for your response.

[Supercilious]

Re: RED ALERT/RED ALERT:-Morgan Stanley stops oil trading because they no CREDIT!!!!!

Just to be clear, do you mean GLD, SLV, and CEF?

Andreuccio, please read carefully the disclaimer at the bottom of this web page:

"Nothing on this website is intended or should be construed as investment advice. It is intended to be used for informational and entertainment purposes only. By using this board you agree that you understand the risks of trading, and are solely responsible for your own investment and trading decisions."

After reading the disclaimer I can tell you that it is my personal completely unqualified and uninformed opinion (that by no means should be construed as any form of investment advice) that according to the business section of the Google search engine webpage:

SPDR Gold Trust (ETF)(Public, NYSE:GLD)


iShares Silver Trust (ETF) (Public, AMEX:SLV)

GLD and SLV are indeed tickers for two highly succesful PM ETF's

Although CEF is not officially labeled as an ETF many websites dedicated to index investment in structured derivative intruments, are ussually listing it in the ETF sections.


According to wikipedia page on the subject of gold ETF's:

http://en.wikipedia.org/wiki/Gold_exchange-traded_fund

Risks

Unlike physical gold bullion which is held in personally allocated storage, the investor will only become a general creditor if an ETF provider went into liquidation. Gold ETFs are a form of debenture.
During an economic crisis GETF assets may be subject to a compulsory purchase by governments. Following Executive Order 6102 of 1933 and the Gold Reserve Act of 1934 private gold ownership was outlawed in the United States for over 40 years.

You may also find this wikipedia quote as having a high educational value (even it may be less entertaining):

In finance, a debenture is a long-term debt instrument used by governments and large companies to obtain funds. It is defined as "a debt secured only by the debtor’s earning power, not by a lien on any specific asset."^[1] It is similar to a bond except the securitization conditions are different. A debenture is usually unsecured in the sense that there are no liens or pledges on specific assets. It is, however, secured by all properties not otherwise pledged. In the case of bankruptcy debenture holders are considered general creditors.

[ldgirod]

Re: RED ALERT/RED ALERT:-Morgan Stanley stops oil trading because they no CREDIT!!!!!

Just to be clear, do you mean GLD, SLV, and CEF?

According to the CEF report, they hold primarily unencumbered bullion, vaulted in Canada.

http://www.centralfund.com/quarterly...%2031%2008.pdf

The governing articles of Central Fund require that at least 75% of Central Fund’s non-cash assets be invested in gold and silver bullion. This cannot be changed without shareholder approval.

The stated investment policy of the Board of Directors requires Central Fund to maintain a minimum of 90% of its net assets in gold and silver bullion of which at least 85% must be in physical form. On July 31, 2008, 97.6% of Central Fund's net assets were invested in gold and silver bullion. Of this bullion, 99.3% was in physical form and 0.7% was in certificate form.

Central Fund's physical gold and silver bullion holdings may not be loaned,
subjected to options or otherwise encumbered in any way.

Central Fund’s bullion is stored on an allocated and fully segregated basis in the underground vaults of the Canadian Imperial Bank of Commerce (the “Bank”), one of the major Canadian banks, which insures its safekeeping.

[MarkL]

GOLD ETFs SAFE?

Are GLD and SLV safe? Is there any possibility that the price of gold could suddenly outstrip GLDs ability to buy gold to back the ETF, thereby leaving GLD owners behind in valuation, naturally resulting in an exit and possible crash of the ETF?

What about the underlying bank/financial institution going bankrupt? How might this affect the value of the ETF?

[walenk]

Re: GOLD ETFs SAFE?

Are GLD and SLV safe? Is there any possibility that the price of gold could suddenly outstrip GLDs ability to buy gold to back the ETF, thereby leaving GLD owners behind in valuation, naturally resulting in an exit and possible crash of the ETF?

What about the underlying bank/financial institution going bankrupt? How might this affect the value of the ETF?

IMVHO GLD and SLV have suspect parents. I prefer CEF. As a closed end fund it sometimes sells for a premium (also at a discount) but the explicit premia may give you a ready answer to your market price/valuation question.

[ASH]

Re: RED ALERT/RED ALERT:-Morgan Stanley stops oil trading because they no CREDIT!!!!!

After reading the disclaimer I can tell you that it is my personal completely unqualified and uninformed opinion (that by no means should be construed as any form of investment advice) that according to the business section of the Google search engine webpage...

Again, thank you for posting this information. It is very helpful indeed.

[ASH]

Re: RED ALERT/RED ALERT:-Morgan Stanley stops oil trading because they no CREDIT!!!!!

Just to be clear, do you mean GLD, SLV, and CEF?

Also, CEF is an exchange-tradeable holding company, rather than an ETF:

Central Fund of Canada Limited (est. 1961) is an exchange tradeable refined gold and silver bullion holding company. Class A shares are qualified for inclusion in many North American regulated accounts. Bullion holdings are stored on an unencumbered, allocated, segregated and insured
basis in the treasury vaults of a major Canadian bank and are audited semi-annually in the presence of Central Fund’s auditors and bank representatives. Class A shares are quoted on the AMEX, symbol CEF and the TSX, symbol CEF.A (Cdn.$) and CEF.U (U.S.$).

My personal impression is that CEF is a safer way to hold paper gold in a retirement account than either GLD or SLV. I also think that services such as Kitco's Pool Accounts are also relatively safe, but aren't necessarily compatible with IRAs or 401ks:

Pool Accounts, also often referred to as unallocated storage accounts, refer to a precious metal account deposit in which the client does not have title to specific (allocated) bars or coins. The client instead owns a defined but unallocated interest in a pool of precious metals held by Kitco. However, the client is entitled to receive physical bullion in the form of any type bar or coin normally carried by Kitco upon payment of quoted fabrication charges.

Bullion Direct offers an IRA service which I haven't personally checked out. Apparently, however, it allows you to purchase physical PM to hold in an IRA:

Trading Account Features for IRA Customers

Secure (SSL 128 bit security)
No minimum account or trade order size
Simple fee structure based on actual activity
Avoid usual delivery fees
Online account management 24/7
Automated email notification of activity
Lloyds of London metal storage insurance
Online trading 24/7
Place orders directly on the Nucleo™ Exchange
View other orders in the Nucleo™ market
Place limit orders
Purchases are for physical metal
Greater liquidity

A lot depends upon one's level of paranoia (concern?). Paper PM is not helpful in the event of a complete collapse of the financial system (such that the markets close, or laws become confiscatory) but is probably good enough for anything short of that. As long as there is physical metal behind the paper (in a 1:1 ratio!) -- and you have a legal right to your share -- then the unallocated nature of the holdings is probably not important. I hold almost all of my paper PM in the form of CEF inside retirement accounts; I hold some additional PM in Kitco pool accounts. If you were worried about unallocated storage, then you can find depositories which will store your bullion on an allocated basis... I'm pretty sure that's what Bullion Direct is offering to do, but again, I haven't verified.

Now, in the event that the system actually crashes, I guess you'd want to hold physical PM. I hold some. It's just that at the point where you can't get to or use your paper PM, more than likely you'll want a firearm, a herd of goats, and a large number of reliable friends. (Sadly, I don't yet own even a single goat!)

[jtabeb]

Re: GOLD ETFs SAFE?

Are GLD and SLV safe? Is there any possibility that the price of gold could suddenly outstrip GLDs ability to buy gold to back the ETF, thereby leaving GLD owners behind in valuation, naturally resulting in an exit and possible crash of the ETF?

What about the underlying bank/financial institution going bankrupt? How might this affect the value of the ETF?

Confidence in paper is waning, why would go to this class of asset as a "safehaven" when all assets of this type are suspect? Does not pass the smell test.

[raja]

Re: GOLD ETFs SAFE?

Confidence in paper is waning, why would go to this class of asset as a "safehaven" when all assets of this type are suspect? Does not pass the smell test.

Because:

1. It's easy to bail out of it quickly, when the time is right.

2. The tax at the time of sale is less (with CEF and GTU)

3. And as ASH says, "Paper PM is not helpful in the event of a complete collapse of the financial system (such that the markets close, or laws become confiscatory) but is probably good enough for anything short of that."

By the way . . . we have 4 goats. The amazing thing is that they eat grass/vegetation and reproduce regularly, so there's a never-ending supply of free meat.
We also have 106 chickens, 5 sheep, 1 cow and 11 emus . . . and lots of canning jars.