Armageddon Trade Placed against Us Bonds - New England Patriots Forums

***patsfan13*** · 07-25-2011, 11:03 PM

Last Thursday a 'bet' was placed that the US would lose it's AAA rating. Someone had some inside info, a lot of future contracts were shorted.

http://www.marketoracle.co.uk/Article29477.html

Quote:

The trade was for block trades of 5,370 10-year Treasury futures executed at 124-03 and 3,100 Treasury bond futures executed at 125-01.

The value of the trade was about $850 million dollars. In simple terms, if that was a direct bond buy, no one would be talking about it.

However, with the use of futures, you have to have margin capacity behind the trade. That means with a single push of a button someone was willing to commit more than $1 billion of real capital to this trade with expectations of a 10-to-1 return ratio.

If you ever find out who shorted these contracts it would be real interesting, where did they get their info? A political donor perhaps?????

wistahpatsfan · 07-25-2011, 11:09 PM

Quote:

Originally Posted by patsfan13

Last Thursday a 'bet' was placed that the US would lose it's AAA rating. Someone had some inside info, a lot of future contracts were shorted.

http://www.marketoracle.co.uk/Article29477.html

If you ever find out who shorted these contracts it would be real interesting, where did they get their info? A political donor perhaps?????

Am I the only one here who thinks that this is disgusting and sooooo blue-bloodishly British.

This is a microcosm of why we're where we are today. Pigs playing games with people's lives doing math tricks and creating nothing useful except somehow magically moving money (credits) from one place to their place without lifting a finger or helping someone or making anything.

Makes me sick to my stomach.

***patsfan13*** · 07-25-2011, 11:46 PM

The problem with eliminating trading securities is that if there were No market there would be no one to finance out debt..... no SS no government, now it would be far better if we lived within our means but clearly that isn't happening.

Look at the current situation, we are projecting 1.2T deficits every year! for the next 10 years!!!!!!!! 12T just in deficits 50T in spending and the pols are making it look like cutting a measly 4T is devastating. Everyone is nuts.

jcdavey · 07-26-2011, 01:46 AM

was probably this guy

PatsFanInVa · 07-26-2011, 02:35 AM

Are we against futures markets?

Are we against all futures markets?

I can see the logic. Where would that take us, all-in? What if no traders on any side of the Atlantic could sell short? Might be good. Might be good if you restrict it to currencies. But you have to put the rule in place before the specific manifestation hits you in the mouth.

I don't see the "inside" information, 13. Want to expound on that? It just looks like someone made a bet that we'd be pretty much where we are now. They're betting against the U.S., but that's just making hay of the situation brought on by the current politically engineered disaster, engineered by your heroes, who want to make this debt ceiling vote special and different: Making business-as-usual payment of bills we already owe conditional on a radical and unpopular agenda.

That's enough information for anyone to take the position described.

So what's the "inside information"?

PFnV

PatsFanInVa · 07-26-2011, 02:42 AM

I love the last paragraph of your article:

Quote:

What you, as investors, should do now is look at the bond exchange-traded funds (ETFs) that provide a positive rate of return when U.S. Treasuries drop in value. Yields are going up sooner rather than later, if the person behind this Armageddon trade is correct.

In other words - what you, the average Joe, should do, is exactly what this trader did.

Face it: the underlying problem here is a refusal to pay bills as the responsibility of a great power. It's not a bad, bad person who is using the legal trading mechanisms of the markets. We might want to change those rules, but we have no actual evidence of insider trading, other than the fact that there's a billion bucks being bet. For all you know, this represents (according to this specific trader,) protection against the risk posed by their other investments... You know, all those free-markets-are-always-right features that fugged the private sector equities markets a few years back.

Do these rules need changing? That's another question. Do they need changing because they hurt us, as a country? While that can be a catalyst, it's a bit late after this type of trading has always been "okay" in the past.

I would be glad to see that there is a reason to go after this trader, insider info for example... but where's the evidence?

PFnV

chicowalker · 07-26-2011, 02:59 AM

Why is the person who wrote the piece (and, in turn, the OP) assuming this was a naked position?

This is a horribly written piece, and its lack of detail or analysis makes it highly suspect, imo. It claims the trade moved the market but doesn't say when it was made, nor does it make any mention of average daily trading volumes. (I think daily volumes are well into 7 figures, which would make me think a block trade of 5000 (or 3000) isn't earth-shattering.)

Any idea who "Jack Barnes" is? Give any thought to the possibility that he has an interest in the market moving in the direction he's pushing people to go?

(btw, I'm not sure what current margin requirements are, but I think he's wrong on the implied margin needed as well. I'd like to see how he arrived at his figure, but of course there's no detail behind that, either.)

mcgraw_wv · 07-26-2011, 07:26 AM

I was thinking of buy gold ETFs or Gold Producers as a hedge against this debt deal... any suggestions out there on where to go for anything like that?