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Royal Gold, Inc. Message Board

  • traveltrader777 traveltrader777 Oct 13, 2005 12:57 PM Flag

    Headlines

    As the Refco debacle slowly is moving up in general headlines, one would think gold should get a boost. I know too little about the company or the potential ripple effect but it sure doesn't sound good.

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    • market cap at 127.5 million shares out. It fell from like $28 a share. So whoever held stock in it is being sucked into the black hole of an implosion of 3.57 billion of nothing. It means that 3.57 billion just vanished minus real equity which is not much because it's illiquid with negative net equity. Can't multiply by a negative number and slice thin air, there is nothing there. OK so what does it mean.......there was a selloff in customer's held assets by management before this went under, so we felt that in the gold selloff. They raced to raise cash and have some money to pay those who cashed out quick but it dried up. So now there's a 3.57 billion dollar hole out there and it's tough to cover up. Whoever had assets held by or guaranteed by Refco is now wondering who is going to make good for them. Refco stock and bonds are mulch. A great buying opportunity was created by this after they sold and then next week after the wizards of Id find out what just happened in Oz....more flight to quality. And what is quality? I find no fault in this metal.

      Credit risk increasing means to sell bonds they have to put more on it, raising rates. Increased risk pushes rates up. Rates are going to spike, bonds go into slow motion degrade and CEO's decide to sell stock off instead of issueing bonds. Selling stock means you pay out no interest at all, but a dividend. How would you raise cash when bonds require paying out higher interst to sell them? See how stocks are linked to bonds. 2-3 month lag, guaranteed. 1987 II. With much different debt dynamics involved. Which about no one really understands because we have never had derivatives so compounded with maximum leverage. It's unknowable. If you think outside the box it's ok to rage outside the cage. Just do it quietly. I'm not miffed at all, I knew a skeleton would fall out, it's part of halloween. That time of the year when the pagans celebrate some freakin warped tradition they don't even understand but watch how they put 1 100th of 1% of the same energy into Christmas heros on the lawn. The sicko dead people thinking witches are cool.......that's the reason we lost 4 southern states already. God is wiping out the hell. You had N.O. being the Mardi Gra capital with gambling as their most respected industry aside of brothel management. The levees broke twice. Have to rebuild it. More brothels and gambling houses and projects. Why not just build an undersea bubble village, then it can't flood. Use bubble finance to create an undersea utopia for illiterate poor people who can't drive anyway. You can just walk from bubble to bubble like a habitrail.

    • After testing $465 gold closed above $469. Nice rally. Hopefully after successful test of $465 we can test $480 again and GG can move above $20. Quick $2 correction for GG. Please remember gg was at $20 1/2 just 2-3 days. I think gg will clkose the year above $23 as gold moves to $500+. The next intermediate top will be @ $525 IMHO. Thoughts?

      GSS is definetely my favored gold position. Still lokkinmg at GSS. That one is the house of pain. GSS at $2 3/4-$2.80 might have discounted all the problems? Gold at a 17 year high a GSS at the bottom for the year. Tells you a lot of the managemenmt team.

    • After testing $465 gold closed above $469. Nice rally. Hopefully after successful test of $465 we can test $480 again and GG can move above $20. Quick $2 correction for GG. Please remember gg was at $20 1/2 just 2-3 days. I think gg will clkose the year above $23 as gold moves to $500+. The next intermediate top will be @ $525 IMHO. Thoughts?

      GGG is defintly my favored gold position. Still lokkinmg at GSS. That one is the house of pain. GSS at $2 3/4-$2.80 might have discounted all the problems? Gold at a 17 year high a GSS at the bottom for the year. Tells you a lot of the managemenmt team.

    • they (2 futures traders) were just talking on tv about how refco's client liquidation might be responsible gor the gold & silver sell off and one said this looks like a good buying opportunity for gold.

    • I am most interested in the answer to that question too. Why hide the loss?, and what made this loss so embarrasing that the ceo had to decide that booking a half $bil in and out. I believe he thought the damage of revealing it must have been worse for his stock position but he also must have known he was acting illegally too. gs will just end up paying a fine for a portion of their fees from the ipo and let off. I think gs has the "negetives" so to speak and has become immune from prosection. gs probably sends threatening email to the justice department warning them to buzz off when they get too close. And they just back off - because the treasury department itself has a lot to hide and gs & others does the hiding.

      Refco was big in forex and look at what happened to the USDX after the lastest news this morning. down to 89.45.

    • Yes, it is all a huge house of cards.

      You are making some good points in this post and in the other one about company's taking on positions if profitable to them.

    • after the ltcm in the 90's, I realized that all markets around the world and currencies and commodities are all at risk of huge unravels. I am not so concerned about what they have done to put them in this situation but I am more interested in the positions that they are long and short and the market will exploit them. The Fed is stepping in for the exchange liquidity and take some of these postions but they would rather the firms take these postions.

    • Just seems to me that if these shenanigans went on - booking nearly half a billion in and out for a few quarters to hide losses -
      we are only seeing the tip of the iceberg.
      What losses, why the need? So as that is being unravelled, who knows what will come to light.

      What caught my ire is the recent IPO. Maybe both auditors and investment bankers doing DD saw nothing wrong. Maybe by the letter of accounting rules, these entries were made properly and no flag was raised. Bennett himself and Thomas Lee&Co are the largest shareholders, if that's any consolation.

    • I heard on tv yesterday that refco makes up 12% of volume on CME. Look at JS comment. What ever their positions are they will have to be taken by other firms at prices that can be profitable for those firms. The way to think of it is, if you were a huge player asset manager with tons of cash. What price would you take a for chunk of silver, gold, oil contracts or s&p futures that would make you feel comfortable with that position in order to make a profit? If you look at a big long on oil for example you can take it here or if you took it at 55 where you knew you could make money on the contracts. This is working its way through the market. It will be interesting what there position on the dollar is.

    • THe refco situation is probably as bad as enron or worse because policy (sarbanes/oxley) changes still did not catch it. What a black eye for wall st, especially having goldman sacs continue to be involved as advisors. what a stench. I saw a tv commercial for refco this morning like nothing has happened - urging new business for it's private client group. Seems to me like refco will never do business again. I just cannot imagine how investors could ever be comfortable giving them money. Good case for regulation of otc dirivitives.

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