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FM3 firstmac mortgage funding trust no. 4 series 1-2020

I do t fully understand the ramifications but the latest on the...

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Noobtrader1

697 Posts.

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07/03/21

13:57

Post #: 51581383
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Originally posted by Corgi: ↑

@Bellavena85
We will find out by the end of next week if the vendor will contribute or not. It makes completely no sense for us to us to have negotiated such a deal which would allow the vendor to contribute and maintain 30% ownership in the asset. We don't even need the money, also, when under the original agreement if the option to increase ownership was under any time pressure we could easily have negotiated an extension to the milestone and compensated the vendor.

As previously highlighted, we are in the position of power, we basically call the shots as the majority shareholder and it was only under the original agreement that the Vendor would have been better off. If, by the end of next week, we move to 85% ownership, there is an extremely high chance that their will be an acquisition of El Zorro within by 11th Feb 2022 (12 months from the date of the shareholder meeting). I just don't see how the vendor could be so stupid. Because the way the company is structured, we could decide to raise and spend however much we wanted and the vendor would be open to large capital contribution liability.

Regarding the POG, it's all driven by the trading in the futures market and lately there has been some insane volume. It no way reflects the physical demand you see around the world. The spot price is completely detached to the dynamics of supply/demand. The volume of settlements in the comex futures market exceeds over estimated volume of delivery by up to a leveraged 10x + position. Also, interesting to note the the bullion banks are covering shorts and a less short now. The managed funds have also reduced their net long positions. As long as the physical demand remains strong, the producers will continue to be able to see strong margins. We will soon get the Feb monthly production/sales updates from some of the producers and we will see the the average sale price is.

As you are aware there is an inverse relation between the US10yr Treasury Bond, USD Index & POG. From the April-May 2020 lows the yeilds have trippled based on the current yeilds. The last time the 10 yr treasury yields were at this level was in 2019 when the POG was less than $1400/USD. The POG has held up extremely well. All the managed money speculators appear to have been shaken out. Bullion banks have recently been covering shorts. The physical demand is still strong.

From a trading perspective, whilst the managed money may be out of the sector at the moment, we all know the fundamentals for gold are strong and it is a sector that when the funds decide to pump there would plenty of money to be made. I have seen periods in the past where over a 4 week period, the managed funds have added to their net long positions by over 150,000 contracts! This generally will create a 3 month period where you'll see a bullish rotation into the sector.

I think the Fed will let the bond crisis fester a little longer, might even see yields spike over 2%, perhaps some liquidity crisis to unfold, then they'll print money send the yield back down to sub 1% and kill the US dollar, this could/would be the catalyst then sparks some speculative life back in the sector.

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I do t fully understand the ramifications but the latest on the gsp vids says that lack of liquidity in the repo market is already happening. All abouve my head but u might find it interesting.
I find him a bit doomsdayish and borderline conspiracy theorist but his data is solid.
do u generally agree with his narrative?

FM3 Price at posting: 0.0¢ Sentiment: None Disclosure: Not Held
1 Upvote

0 Great analysis

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