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news & opinion with no titillating non-news from the major non-news channels.


I am: progressive, not a wild-eyed Progressive; liberal, but shun liberals and Liberals; conservative, but some Conservatives worry me; absolutely NOT a libertarian. I am: an idealist, but no utopian; a pragmatist, but no Machiavellian. I am a realist who dreams.


I welcome all opinions.

Monday, November 28, 2005

Chinese manipulating the copper market?:
     Mauldin conjectures "wildly"

According to John Mauldin of the weekly investor newsletter, Thoughts from the Frontline, the Chinese are coming up short on critically needed copper supplies. Apparently, a senior trader who works for/does not work for the Chinese State Reserve Bureau has been playing in the trading pits allegedly for personal gain. The Chinese claim to be ready to deliver 200,000 tons of copper into the market to stabilize the situation. Many think the Chinese are bluffing and are in deep you-know-what.

Mauldin speculates on more sinister state-sponsored motives. He first questions whether the Chinese would risk a bluff, fearing a loss of credibility in the eyes of the market.

They cannot bluff on this and ever be taken credibly in the copper or any other market. If they say they are going to deliver 200,000 tons of copper, believe it.

Instead, Mauldin conjures up a scenario of the Chinese sitting down for lunch, seeing themselves as,

getting screwed (that's a technical financial term) by foreign traders on metal prices in general and copper in particular. Someone quips, "We should show them and not buy any copper for a few months and let the price drop." And then the light bulb comes on, because with your massive reserves you could do just that. And not for just a few months. You could cause some pain in trading rooms all over the world... teach(ing) the market a lesson to not jack with you, because you could come into any commodities market at any time and do the same.

I wonder if I should risk shorting some copper futures...


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