Archive - Mar 29, 2009

Zero Hedge is rarely speechless, but after receiving this email from a correlation desk trader, we simply had to hold a moment of silence for the phenomenal scam that continues unabated in the financial markets, and now has the full oversight and blessing of the U.S. government, which in turns keeps on duping U.S. taxpayers into believing everything is good.

I present the insider perspective of trader Lou (who wishes to remain anonymous) in its entirety:

Update: According to a White House official, Wagoner was asked to leave by the Obama administration. Scapegoating has begun.

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Over the past two months, it has become painfully obvious that everyone who has anything remotely to do with finance has become an expert on the bond-CDS basis trade. While this is absolutely fine, the problem is that understanding the fundamentals in basis is essentially pointless from the perspective of actually trading it, as lately (and for the foreseeable future) fundamentals will matter exactly diddly squat, now that technicals have become (and will be) the dominant trading factor.

Over the past two months, it has become painfully obvious that everyone who has anything remotely to do with finance has become an expert on the bond-CDS basis trade. While this is absolutely fine, the problem is that understanding the fundamentals in basis is essentially pointless from the perspective of actually trading it, as lately (and for the foreseeable future) fundamentals will matter exactly diddly squat, now that technicals have become (and will be) the dominant trading factor.