tag:blogger.com,1999:blog-4490468598422095060.post6484141280931511005..comments2024-03-17T07:55:12.096-07:00Comments on FOFOA: Regular Forum Archives 1998-2001FOFOAhttp://www.blogger.com/profile/17152544684132776239noreply@blogger.comBlogger220125tag:blogger.com,1999:blog-4490468598422095060.post-55259585900829430382013-01-29T05:45:57.739-08:002013-01-29T05:45:57.739-08:00btw I left a couple more comments on Bron's bl...btw I left a couple more comments on Bron's blog regarding the LBMA liquidity survey,<br /><br />http://goldchat.blogspot.com/2012/12/lbma-liquidity-survey.html?showComment=1356105481600#c5065611511981887567<br /><br />I was waiting to see if Bron would get back to the subject after the holiday but so far he has not.Michael Hhttps://www.blogger.com/profile/08900572113023618278noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-57630341193655591272012-12-08T05:38:54.607-08:002012-12-08T05:38:54.607-08:00One more question. Is there no trading between cli...One more question. Is there no trading between clients?<br /><br />Could a bullion bank have sold to one client and another have bought from that client?<br /><br />This would seem a position where some (reporting ;) ) are net short, while some are net long.<br /><br />TFMotley Foolhttps://www.blogger.com/profile/06902761012772262091noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-28315154382355395132012-12-08T02:03:39.159-08:002012-12-08T02:03:39.159-08:00Hey again FOFOA
'You wrote: "The side no...Hey again FOFOA<br /><br />'You wrote: "The side not reporting's information added likely lessens the discrepancy."<br /><br />Not true.'<br /><br />Hmm. Well, if we assume the banks try to be net neutral overall then this does seem likely. Mind if I speculate a bit?<br /><br />"Only if you are prepared to explain or accept on faith alone that 15K tonne flow (i.e., Motley Foolhttps://www.blogger.com/profile/06902761012772262091noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-36834423508398640862012-12-07T23:27:57.755-08:002012-12-07T23:27:57.755-08:00Hello MF,
You wrote: "The side not reporting...Hello MF,<br /><br />You wrote: <i>"The side not reporting's information added likely lessens the discrepancy."</i> <br /><br />Not true. It can be different in the same direction (i.e., net short but to a greater or lesser degree). In this case it adds to the overall discrepancy. It only lessens it if it is in the <i>opposite</i> direction (i.e., net long to some degree). In FOFOAhttps://www.blogger.com/profile/17152544684132776239noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-13202403754709813942012-12-07T21:51:20.228-08:002012-12-07T21:51:20.228-08:00Hi FOFOA
Given the obvious effort that went into ...Hi FOFOA<br /><br />Given the obvious effort that went into your reply, I will try and reply with more rigor.<br /><br />I find that I have more questions than answers really.<br /><br />Here is the reasons I see for the discrepancy observed :<br /><br />a) The reporting banks had a net short position in paper and physical combined.<br />b) Inter-temporal effects<br />c) Survey methodology which Motley Foolhttps://www.blogger.com/profile/06902761012772262091noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-64287402874083782822012-12-07T20:59:54.847-08:002012-12-07T20:59:54.847-08:005/5
You wrote: "“'If it's not 1% or ...5/5<br /><br />You wrote: <i>"“'If it's not 1% or less (which it wasn't), then there must be another explanation."”<br /><br />Or it is simply one factor that needs to be taken into account. ;)"</i> <br /><br />Huh? I don't understand. Can you give me an example of a factor that I haven't considered? For the record, the "factors" I have considered FOFOAhttps://www.blogger.com/profile/17152544684132776239noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-3411385329698771572012-12-07T20:58:55.922-08:002012-12-07T20:58:55.922-08:004/5
You wrote: "“The with a sample of 56 and...4/5<br /><br />You wrote: <i>"“The with a sample of 56 and the commercial sensitivities involved, it is highly likely that there is some skew in who did not report.”<br /><br />I see I agree with Bron here."</i> <br /><br />So do I. So what? I just accounted for that in the last section when I said we don’t know the net position of the non-reporting members. Only that of the FOFOAhttps://www.blogger.com/profile/17152544684132776239noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-25109746222560062952012-12-07T20:57:26.131-08:002012-12-07T20:57:26.131-08:003/5
Reporting Banks Sells 5780t
Reporting Banks B...3/5<br /><br />Reporting Banks Sells 5780t<br />Reporting Banks Buys 5627t<br />Reporting Banks Discrepancy 153t short<br /><br />Non-Reporting Banks Sells 3096t<br />Non-Reporting Banks Buys 3232t<br />Non-Reporting Banks Discrepancy 136t long<br /><br />All Banks Sells 8876t<br />All Banks Buys 8859t<br />All Banks Discrepancy 17t short<br /><br />In Bron's explanation, he wants to keep theFOFOAhttps://www.blogger.com/profile/17152544684132776239noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-86359247085846693242012-12-07T20:56:31.135-08:002012-12-07T20:56:31.135-08:002/5
You wrote: "“Each trade is assumed to be...2/5<br /><br />You wrote: <i>"“Each trade is assumed to be random as are the choice of non-reporting banks, otherwise we have an "unusual event" that needs explaining, but Bron is not arguing for that and neither am I.”<br /><br />I am though. ^^"</i> <br /><br />I guess you must not have understood the context of that statement which I wrote on July 5th back at the beginning FOFOAhttps://www.blogger.com/profile/17152544684132776239noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-52360556707999358452012-12-07T20:55:31.018-08:002012-12-07T20:55:31.018-08:00Hello Motley Fool,
You wrote: "The discrepan...Hello Motley Fool,<br /><br />You wrote: <i>"The discrepancy between buying and selling as noted is only 4.5%. Since only 36 of the 56 banks responded, and the likelihood exists that banks doing one thing ( buying) are less likely to report than those doing the opposite (selling) this is a small enough discrepancy to be explained by the method of the survey."</i> <br /><br />If you are FOFOAhttps://www.blogger.com/profile/17152544684132776239noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-37031105705077197792012-12-07T04:35:13.449-08:002012-12-07T04:35:13.449-08:00Hey FOFOA and Bron
My thoughts presented as scrib...Hey FOFOA and Bron<br /><br />My thoughts presented as scribbled down while reading through the survey and discussion.<br /><br /><br /><br />The discrepancy between buying and selling as noted is only 4.5%. Since only 36 of the 56 banks responded, and the likelihood exists that banks doing one thing ( buying) are less likely to report than those doing the opposite (selling) this is a small Motley Foolhttps://www.blogger.com/profile/06902761012772262091noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-33407007556067458672012-12-05T21:01:44.730-08:002012-12-05T21:01:44.730-08:00Sounds good, Bron! I think I've made my case ...Sounds good, Bron! I think I've made my case for any prying eyes to decide for themselves and, like I said, I (we) eagerly await your studied conclusions and your Occam's-worthy explanation for the discrepancy between purchases and sales! <br /><br />Sincerely,<br />FOFOA<br />FOFOAhttps://www.blogger.com/profile/17152544684132776239noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-3710720611533649332012-12-05T20:34:53.344-08:002012-12-05T20:34:53.344-08:00We've been over this in our previous email exc...We've been over this in our previous email exchange.<br /><br />I am not modelling 3,136 trades, which is the point you do not get. You cannot go any further in terms of data points. The "trend forming" was about getting more accurate models that reflects the survey, not about modelling more underlying trades.<br /><br />It does not matter if we could construct a model with 300,000 Bron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-80265156383275437342012-12-05T19:27:38.792-08:002012-12-05T19:27:38.792-08:002/2
As I say, each reporting LBMA member essentia...2/2<br /><br />As I say, each reporting LBMA member essentially conducted its own internal survey of, on average, apparently, 170 "trades" per day. If those trades were "random" (as in not coordinated/one-directional) then, looking at my "trend" above, we could probably expect random discrepancy/deviation between purchases and sales from each reporting member <i><b>FOFOAhttps://www.blogger.com/profile/17152544684132776239noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-30946119754976580942012-12-05T19:26:34.650-08:002012-12-05T19:26:34.650-08:00Hello Bron,
Of course the banks didn't report...Hello Bron,<br /><br />Of course the banks didn't report each trade to the LBMA. The banks essentially performed their own internal survey and then reported the aggregate numbers to the LBMA. <br /><br /><i>"That statement tells me you do not understand how the LBMA survey was constructed."</i> <br /><br />Um, okay. If you say so. Your statements likewise tell me that you do notFOFOAhttps://www.blogger.com/profile/17152544684132776239noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-55254374380697360722012-12-05T17:02:36.601-08:002012-12-05T17:02:36.601-08:00"So your new model has a complexity of 3,136 ..."So your new model has a complexity of 3,136 trades ... The LBMA survey reported a total of 385,852 trades."<br /><br />That statement tells me you do not understand how the LBMA survey was constructed. If every bank reported the LBMA could only have got a maximum of 3,136 data points. The LBMA was not given 385,852 individual trades.<br /><br />If a bank had sold 1oz to 100 clients andBron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-24045049164613145402012-12-04T23:21:24.942-08:002012-12-04T23:21:24.942-08:00BTW, Bron, I just let GBIJoe know about this threa...BTW, Bron, I just let GBIJoe know about this thread so that he can come read it and see for himself that this issue is not resolved between you and me. I told him that in my earlier email anyway, but at least this will reassure him that we are still not in agreement! ;D <br /><br />Regarding complexity, you wrote: <i>"I think the interaction of 56 banks trading with each other is more FOFOAhttps://www.blogger.com/profile/17152544684132776239noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-81190984060986185372012-12-04T22:18:47.418-08:002012-12-04T22:18:47.418-08:00Hello Bron,
I think you are missing the point. I...Hello Bron,<br /><br />I think you are missing the point. I understand you are short on time, but perhaps you could provide a sample iteration of this, in the same format as the one above:<br /><br /><i>"Yes, because I'm running various iterations of my toy model and it doesn't produce such a flow. I can produce a situation where net overall the buying and selling of clients is net FOFOAhttps://www.blogger.com/profile/17152544684132776239noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-46011815008339853752012-12-04T22:00:28.949-08:002012-12-04T22:00:28.949-08:00I hate stats, they are without a doubt the biggest...I hate stats, they are without a doubt the biggest lie ever invented. BTW I do not have a link to that!!Wendyhttps://www.blogger.com/profile/17448815628676884529noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-22060159608003335752012-12-04T21:59:20.007-08:002012-12-04T21:59:20.007-08:00"Do you still disagree with the statement giv..."Do you still disagree with the statement given these changes?"<br /><br />Yes, because I'm running various iterations of my toy model and it doesn't produce such a flow. I can produce a situation where net overall the buying and selling of clients is net and banks are net, but still result in a reporting banks discrepancy with no x2 flow between reporting and non-reporting.<br Bron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-47790319355934610122012-12-04T20:45:53.990-08:002012-12-04T20:45:53.990-08:002/2
So if the banks are essentially net-neutral, ...2/2<br /><br />So if the banks are essentially net-neutral, why are we seeing any discrepancy at all? We are seeing it because only the interbank transactions were halved, not the client transactions. So the reporting members are net short vis-à-vis their clients and net long vis-à-vis other banks in equal/similar amounts, yet because we halved only the trades with other banks, we see a FOFOAhttps://www.blogger.com/profile/17152544684132776239noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-77579490336846750142012-12-04T20:44:57.958-08:002012-12-04T20:44:57.958-08:00Hello Bron,
The very idea of your asymmetric repo...Hello Bron,<br /><br />The very idea of your asymmetric reporting explanation for the discrepancy (as you are standing it in opposition to my explanation) represents a net flow from LBMA members more heavily weighted in one kind of client (selling clients) to BBs more heavily weighted in a different kind of client (buying clients). <br /><br />We are both operating on the premise that the banks FOFOAhttps://www.blogger.com/profile/17152544684132776239noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-62857563009910709702012-12-04T17:20:32.972-08:002012-12-04T17:20:32.972-08:00"I removed the word physical. Do you still di..."I removed the word physical. Do you still disagree with the statement given this change?"<br /><br />Taking physical out helps.<br /><br />"there needs to be a flow of gold twice the size of the discrepancy, or 15,150 tonnes (7,575 X 2) from the non-reporting members to the reporting members"<br /><br />Don't agree. From my model of the 56 banks, random spread of trades Bron Sucheckihttps://www.blogger.com/profile/00530576934994289879noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-10756834327122305852012-12-04T08:23:15.835-08:002012-12-04T08:23:15.835-08:00VtC
Thanks for the clarification. I will give it ...VtC<br /><br />Thanks for the clarification. I will give it some thought. :)<br /><br />TFMotley Foolhttps://www.blogger.com/profile/06902761012772262091noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-77011121491894531502012-12-04T03:09:15.821-08:002012-12-04T03:09:15.821-08:00Costata,
Thanks for your answer.
I expect the ce...Costata,<br /><br />Thanks for your answer.<br /><br /><i>I expect the certificates to be cashed out at the market price or a fixed weight at the face value of the certificates (which only specify a weight). Do you see the trick?</i><br /><br />I only see the trick if you really, really, really trust that the mint will not default and give you cash at the worst possible time (when paper price burningfiathttps://www.blogger.com/profile/15830817879033179597noreply@blogger.com