"In a society built largely on confidence, with real wealth expressed more or less inaccurately by pieces of paper, the entire fabric of economic stability threatened to come toppling down."
New York World, October 25, 1929
"In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could."
Rudy Dornbusch
Next week is a Thanksgiving Holiday week in the states, as the markets will be closed on Thursday and a light session on Friday.
Metals Option Expiration is next Tuesday. December is a big delivery month.
Several people have mentioned that the bankruptcy of MF Global takes a lot of large specs out of play for this delivery, with their positions trashed and funds frozen in both gold and silver. And the failure of MF Global was a 'hit' or some ploy by the Wall Street wiseguys to break the speculative longs in the metals and take down the biggest retail futures firm that arranges physical delivery. Talk about going the extra mile.
That should set a few more minds free of their illusions about fair and efficient markets..
The Super-Committee has its deadline next week and a good resolution seems unlikely, which is what most expect. Obama helped to set this impasse up by extending the Bush tax cuts at the beginning of 2011, which are now a major sticking point.
I have an open mind to the theory that this is a bit of chess, with Defense Department cuts being set up by default if no resolution is reached, although they will only start in 2013.
Most politicians are loathe to put military spending cuts on the table and take responsibility for them. A failure by the Super-Comm makes the cuts 'automatic.'
Headline risk in European sovereign debt remains very elevated.
I remain in a paired trade of short stocks and long bullion.
Have a pleasant weekend.
