Veneroso says commodities are being manipulated ... from the long side

Section:

11p ET Tuesday, June 21, 2005

Dear Friend of GATA and Gold:

Please forgive the inadvertent dispatch to you a few
minutes ago of what was meant as a reply to an
individual GATA supporter who had changed e-mail
addresses and wanted to get her new one on the GATA
dispatch list.

With all its hired help, the World Gold Council
wouldn't make a mistake like that -- if only because
the council has nothing to say, but that's another
issue.

Below please find a news story of interest.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Gross says Fed may cut rates by year's end

From Reuters
Tuesday, June 21, 2005

http://www.reuters.com/financeNewsArticle.jhtml?
type=bondsNews&storyID=8853515

CHICAGO -- Bill Gross, one of the world's most influential bond
investors, on Tuesday said he expects the Federal Reserve will stop
raising interest rates this summer and start cutting again, perhaps
by year's end.

"Central banks don't rest at one rate for long and if only to impart
a bid to the U.S. housing market, they (the Federal Reserve) may
have to start cutting again as early as the end of the year," Gross,
who oversees $445 billion in fixed income securities as chief
investment officer at PIMCO, told reporters.

Gross, a featured speaker at the Morningstar Inc. investment
conference, said he expects the Federal Reserve, which has been
raising interest rates gradually for months, may end this cycle in
August after pushing rates to 3.5 percent.

"I think the Fed will have to stop shortly," Gross said, adding: "I
know this differs from conventional wisdom, which has the Fed
stopping at around 3.75 percent."

In terms of investment choices, Gross said European debt,
particularly longer-dated German bonds, looks slightly better than
U.S. government debt now because the investments will pay more when
converted back into U.S. dollars.

"When its hedged back into U.S. dollars you pick up about 50 basis
points or more over the U.S. yield," Gross said.

Still Gross, like other stock and bond pickers, cautioned U.S.
investors against expecting their money to earn big returns these
days.

Even hedge funds, which often promise to make money in all types of
markets, aren't capable of delivering the outsized returns that made
them famous years ago, Gross said.

Hedge funds' high fees -- they often charge at least a 1 percent
management fee plus a 20 percent performance fee -- are likely to
eat into any gains they these loosely regulated funds make, Gross
told hundreds of financial planners at the conference. Many of these
planners are now turning to hedge funds to try and boost their
clients portfolios a bit.

While U.S. central bankers have recently said they are not worried
about the role hedge funds play in the markets, Gross said these
types of funds introduce volatility into markets that might make
more conservative investors step to the sidelines.

Speaking about Federal Reserve Chairman Alan Greenspan, Gross
said, "He would take the other side and say the volatility hedge
funds are adding is a good thing but I think that type of volatility
can't be a good thing."

Last month markets were roiled by talk that several hedge funds were
on the brink of collapse, hurt when ratings agencies downgraded auto
makers General Motors' debt to junk. Since then, performance data on
the $1 trillion hedge fund industry has shown that many convertible
arbitrage funds absorbed heavy losses.

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----------------------------------------------------

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