Silver Levels of Interest

[neilgin1]

yeh.

[tedandcam]

wow..I'm so outta my league

Me too! But, I still read it all to see if I can gain some insight.

[Jonflyfish]

Updated silver COT (commitments Of Traders) strength index (top 3 intertwined lines) and net (long - short) positions(bottom three lines)
See earlier post in this thread for interpretation.
For reference:
blue line = commercial traders
green line = large speculators
red line = small speculators
Cheers!

[Jonflyfish]

Profile update-
Cheers!

[InfleXion]

By another name, it's called gambling. Except that in the real world of gambling if you fail to pay, they shoot you in the kneecap, then kill your family, before they tie an anchor to your ankles and throw you in the bay.

this from Ranting Andy:

The average derivative/asset ratio at the top 3 banks (JPM, Citi, BofA) as of Q1 stands at 37.6x. This is higher than the average leverage ratio (32x) of Lehman, Bear Stearns and Merrill Lynch leading up to the 2008-09 recession. The average exposure of these 3 banks to interest rate contracts (% of total derivatives) is 78.7%. A mere 0.1% loss on interest rate derivative contracts would send these banks reeling, a 3.5% loss would wipe out all of their assets, and a 10% loss would exceed all US Commercial Bank Assets combined.

The derivative implosion in 2008-09 was largely confined to Credit Derivatives, which globally as of Q1 stand at $25 trillion, down from $58.2 trillion in Q4 2007 (note: US Commercial Banks still have $13.9 trillion in credit derivatives on their books...which is $213 billion more than their total combined assets). Interest rate derivatives are 17.6x this number which, under higher rates, could make this the largest financial bubble to burst in history. In sum, if interest rates continue to rise, the global banking system will likely be under unprecedented stress with failures virtually guaranteed.

Interesting information- thanks for sharing. Do you happen to know their net exposure (i.e. long - short), VaR? (Value at Risk) , tenor and duration structure (does that exposure naturally decrease to zero by tomorrow, next year, 30 yrs without any new trades to layoff or offset?)
Cheers!

I'm a bit late to return to the party, and I won't bore ya with details.. I am sleepy.

While I do not know the net exposure of short vs. long I do know that BIS report came out a couple months ago detailing that the major derivatives holders have $441 trillion in exposure to interest rate swaps alone. While this was originally reported on one of the so-called silver pumper sites, I was able to trace it down to the original report on the BIS web site. I'm pretty sure it was linked here at some point.

So even the lofty numbers provided are still dwarved. The amount of risk exposure out there exceeds all global assets by many orders of magnitude, and is dependent upon interest rates not rising (bets made that the Fed will extend and pretend indefinitely), which is why I have long said that a taper will never happen.