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Bassanese: Remain Bearish Gold

Gold prices had a long a glorious run during the commodity price upswing and then during the early stages of global economic recovery from the 2008 financial crisis. But along with the commodity prices and the Australian dollar more broadly, gold prices peaked around mid-2011, and it has largely been one-way traffic downward ever since.

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September Wipes Out Gains

Finally an end to nasty September and its equally treacherous quarter (for investors large and small). July was miserable, August a surprisingly solid month and September at first disappointed, and then shocked us with the size and the extent of the sell off.

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Hybrids Of The Major Banks To Be Downgraded Again

In recent weeks we have written to our clients and to the media about our concerns about the proliferation of “equity hybrids”. Equity hybrids, as opposed to debt hybrids, are hybrid securities that we believe have a risk exposure akin to equities, not bonds due to the ability of banking regulators to force their conversion to equities without any ability of hybrid investors to control this outcome. More concerning is the fact that Australian investors have invested a total of $20 billion in these securities, including the recent $2.5bn CBA hybrid PERLS VII.

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