-- Posted Friday, 16 January 2009 | | Source: GoldSeek.com
DEEPCASTER LLC
www.deepcaster.com
DEEPCASTER FORTRESS ASSETS LETTER
DEEPCASTER HIGH POTENTIAL SPECULATOR
Wealth Preservation Wealth Enhancement
Financial and Geopolitical Intelligence
- - We’d Wager The Cartel is Displeased - -
Recent past and prospective Financial and Economic Crises present unparalleled challenges to Investors and Traders.
Fortunately, one Key Tool has come into increasing use in recent years and is an immense help in coping with and, indeed, profiting from these challenges. And we’d wager The Cartel* is displeased. Just recall as you read this that The Cartel often launches its attacks near or on Options Expiration dates. Remember also that The Cartel can apparently dither for weeks on end before striking swiftly.
First, consider the helpful characteristics of this Key Tool for Protection and Profit.
Sector Choice: This Key Tool allows considerable flexibility in making investments in Sectors which may be profitable, or in Sectors which are expected to decline. As Marc Faber has correctly pointed out, even in Recessions some Sectors are strengthening, while many others may be weakening. In other words, there are almost always some potentially profitable Sectors in which to invest, regardless of the economic or market “climate.”
Minimal Individual Stock Risk: Investors and traders are increasingly aware that individual stocks increasingly contain very considerable and often well-hidden risks. Even if an Investor or Trader conducts intense Due Diligence, that may not reveal the vulnerabilities of a particular individual stock.
This is because the Required Disclosures sometimes do not reveal risky off-the-books transactions or the weakness of counterparties to darkly liquid Over-The-Counter (OTC) transactions. Indeed, they almost never reveal the degree of counterparty risk which the company (issuing a particular stock) may face as a result of its counterparties’ OTC Derivatives exposure.
For example, consider the case of Bristol-Meyers Squibb, which nearly a year ago announced it had to take a quarter of a billion dollar write-off due to Derivatives exposure. Before that announcement, who would have thought that a “safe” Big Pharma Company would have been caught up with substantial losses due to toxic Derivatives exposure?
Minimize General OTC Derivatives Exposure: The Central Bankers Bank – The Bank for International Settlements (www.bis.org) - recently revealed that as of June, 2008 there were over $683 trillion outstanding in OTC (dark and darkly liquid) Derivatives (path: statistics>derivatives>Table 19 and ff). For many of these Derivatives the terms and conditions and risks and exposures for the parties to these Derivatives are known only to the two parties to the Derivatives Contract. Thus, there is huge risk in investing in individual companies which may be a Party to these transactions.
And with $683 trillion in Dark OTC Derivatives Outstanding there is considerable risk in the markets worldwide.
Indeed, some of the largest and (formerly) most prestigious companies in the U.S. (for example, Lehman Brothers and AIG) failed or required bailing out due in large part to their OTC Derivatives exposure.
Given the size and magnitude of the $683 trillion OTC Derivatives Market, there are many OTC derivatives-generated disasters to come. The Key Tool minimizes this risk.
No Options Time & Risk Premium Erosion: Traditionally Investors and Traders have hedged their bets (or taken positions hoping to make a profit) using Options. Given the high levels of volatility in today’s markets, Options Premiums are extremely high. Moreover, Options are inherently risky - - one can lose all the money which one has put at risk, or even much more. The Key Tool on which we focus here virtually eliminates exposure to time and risk premium erosion inherent in Options ownership.
Provides Potential 200% and 300% Magnification of Gain: These critical tools can provide 200% or even 300% magnification of gain without time and risk premium erosion.
Strengthens Ability to Cope with Cartel Market Intervention & Data Manipulation: As ever more Investors and Traders are realizing, the Fed-led Cartel* of Central Bankers and their Favored Financial Institutions and Factota conduct ongoing Overt and Covert Market Interventions and Data Manipulation.
One of several deleterious effects of this Market Intervention and Data Manipulation is that it can catch otherwise savvy investors “offside” and/or cause them to lose Option value due to time and risk premium erosion.
The Gold and Silver markets have been especially prone to Market Intervention by The Cartel for several years for reasons which we point out in the Articles referenced below.
*We encourage those who doubt the scope and power of Intervention by a Fed-led Cartel of Key Central Bankers and favored financial institutions to read Deepcaster’s December, 2008 Letter containing a summary overview of Intervention entitled “A Strategy for Profiting from the Cartel’s Dark Interventions & Evolving Techniques” and Deepcaster’s July, 2008 Letter entitled “Market Intervention, Data Manipulation - - Increasing Risks, The Cartel End Game, and Latest Forecast” at www.deepcaster.com. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org for information on precious metals price manipulation. Virtually all of the evidence for Intervention has been gleaned from publicly available records. Deepcaster’s profitable recommendations displayed at www.deepcaster.com have been facilitated by attention to these “Interventionals.”
It is probably obvious by now that the Key Tool to which we refer is the Exchange Traded Fund. Hundreds of these Funds have come into prominence within the last decade, and most have all the considerable advantages listed above. Indeed, after analyzing the Fundamentals, Technicals and Interventionals Deepcaster was able to forecast the Fall Market Crash in an early September, 2008 article entitled “Opportunities in the Impending Perfect Storm” and to recommend investing in certain ETFs to profit from it. The Interventionals facilitated Deepcaster recommending five short Equities Positions, all of which we subsequently recommended be liquidated profitably.
All of the foregoing is not to say that ETFs are without risk, some of them have considerable risks. We recall an ETF which began to be widely used a couple of years ago which did not perform as advertised.
Nonetheless, if one selects properly structured, well-managed ETFs with a good track record, one can obtain double (or now even triple) returns both on the long and short side. Thus, ETFs allow Precious Metals and Tangible Assets investors in particular, to blunt the timing advantage which The Cartel has had in intervening in the Precious Metals and other Tangible Assets Markets.
Accordingly Deepcaster expects to continue to recommend ETFs in the future for their considerable advantages.
And we’d wager The Cartel is displeased with the increasing use of ETFs, and especially the Double and Triple ones, primarily because they allow Investors and Traders to avoid time and risk premium erosion and options expiration dates, which The Cartel has used to its advantage.
In any event, for all Investors and Traders, ETFs provide another useful Tool to achieve Protection and Profit.
Deepcaster
January 16, 2009
DEEPCASTER LLC
www.deepcaster.com
DEEPCASTER FORTRESS ASSETS LETTER
DEEPCASTER HIGH POTENTIAL SPECULATOR
Wealth Preservation Wealth Enhancement
Financial and Geopolitical Intelligence
Gravitas, Pietas, Virtus
-- Posted Friday, 16 January 2009 | Digg This Article
| Source: GoldSeek.com
