10 November 2011

Gold Daily and Silver Weekly Charts - Forget MF, Think MMF Variable NAV

A bear raid today ran the stops, and a few miners were selectively taken out and severely beaten down.

But all of it was within the range of the current trends.  So it was easily ignored, except perhaps to round out some positions and add a few less familiar ingredients to the moveable feast of the shorter term portfolio.

I have mixed feelings on silver. I am less constructive of it in the short term than I am of gold as a safe haven play. But longer term silver is going to outperform gold by a considerable margin. It is just a more challenging trade to hold and maintain one's day to day serenity.

Speaking of serenity, I hear that Mary Schapiro and her crew are not worrying much about MF Global, but more about Money Market Funds (MMF). 

They are considering a solution to the 'breaking the buck' situaton with money market funds, and their nasty exposure to Europe.  Why worry about breaking the buck, just take the NAV and make it moveable!  So you put money in an MMF, and you're not sure how much you'll get back.
"SEC Chairman Mary Schapiro said Monday that the agency plans to propose new requirements for the MMF industry within the next few months. They include the addition of capital buffers and a change from constant net asset value (CNAV) to variable net asset value (VNAV) funds."
Presumably the increased risk of capital will obtain a higher return, like maybe three tenths of a basis point instead of one tenth, as long as you are willing to roll the dice on the return of principal.

Oh yeah, that will work for most savers.  This must be the Bank Transfer Day in Reverse movement. It should be good for bank deposits and US Treasuries. And maybe closed end gold funds.

SEC Money Market Reform