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Senior Advisor

Talking about forced liquidation..Hunt etc

It seems to me that anyone in a long position going into a delivery month should have the strong position. They can take ownership of any commodity of the have the funds to complete the transaction.

 

However, the short position has the responsibility to deliver a commodity to a delivery point by a given day. If they are unable to do that, then they are in default. They should not be hedged in a delivery month if they don't have the ability to deliver.

 

How they can blame the buyer of said commodity at fault is beyond me.

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6 Replies
Honored Advisor

Re: Talking about forced liquidation..Hunt etc

I don`t recall the whole Hunt brothers deal, but as I understood it they wanted to force the paper sellers of silver to deliver the physical to show there`s more paper trade than physical product and make a buck or 2 in the process as the sellers were scrambling to cover their shorts.  But don`t spit in the the wind or play poker with a guy named after a city.

 

Like what`s going on with the metals, force majeure when you absolutely have to, of course http://www.dailypaul.com/282212/force-majeure-was-the-end-game-all-along-comex-will-default-in-the-n...

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Advisor

Re: Talking about forced liquidation..Hunt etc

Which commodity are you refering to??

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Honored Advisor

Re: Talking about forced liquidation..Hunt etc

I think he`s talking about corn dropping 16¢ not being the buyer`s fault because of a `change in months?`.  But, if a farmer contracts a certain month of course he has the physical and wants get rid of it on the date of his contract. "Hunt" was thrown in

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Advisor

Re: Talking about forced liquidation..Hunt etc

Maybe the longs had to short to offset the long they did not want to take delivery on

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Senior Advisor

Re: Talking about forced liquidation..Hunt etc

I am referring to Hunts and the forced soybean liquidation. They wanted to take delivery but delivery was impossible because of lack of facilities. The exchanged ruled that hunt must liquidate long positions and the sales impacted the cash market as well and holders of physical soybeans In Iowa took some losses as well.

 

My point is that those holding a short position in a delivery month has taken a high risk position and should be prepared to complete the transaction as long as the buyer is able to buy.   That in itself indicates how flawed the system is if a buyer cannot depend on delivery. Thus they were forced to liquidate long positions and the only buyers for those positions were the owners of the short positions.  Under those conditions not even a fool would buy those contracts without the ability to take delivery.

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Senior Contributor

Re: Talking about forced liquidation..Hunt etc

1 things happen

2 Hunts in silver were levered up their arse,, dog has a soec limit position, fav horse as well. They got carried away and paid, bot went bankrupt inside of 6 months. Relatevely tey got off easy.

 

there is no squeezing or cornering, if you do you die.

 

Every aunt trudy dug her silver out of the attic and sold it,, the HUnts got it all,,

then what ? Trudy had $$$ nd could buy XON and today be up 50 fold and

bunky has silver, bars,, sitting sitting.

 

1977, hunts liked speculation and tried to corner beans, well, they have cattle but not enough to eat teh CBT stks.

and crashola..    The day you hear squeeze,,, SELL.

Look at teh S Africian cocoa guy 2 yrs ago, the moment it was revelaed he took big dilivery,

CC tanked 700$/tonn.

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