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Hey Mary, Investigate This
You want to earn your $1 billion budget? Start by explaning why a bankrupt company is the proxy for the S&P500!
And for those who believe that all securities following AIG is the new normal, I present the historical AIG-SPY correlation chart. At 0.1848, R2 those correlation trades really make tons of sense.
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Why, financial innovation, of course.
Since we're giving Mary homeworks, check Karl Denninger's Dell Insider Trading:
http://market-ticker.denninger.net/archives/1385-Insider-Trading-Again-D...
hahahaha.
since she is working on being a "pure investor advocate".....
lol
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
If there was proper accounting we might find out that a lot of the SPX is also bankrupt.
Spot on, since the lowest tranches of the SPX have been implicitly guaranteed by the USofA.
How about California muni bonds for that matter?
http://tech.yahoo.com/news/ap/20090828/ap_on_hi_te/us_california_garage_...
While I agree our economy is f-ed. Munis are different. Case in point, the state constitution of CA mandates education will be paid first followed by State G.O. debt (roughly $97B in revenues to cover $5.9B in debt payments after education ($51B) gets paid). On a 500 line item list, CA G.O. muni debt is second in line. Arnold's problems are over line items 450-500.
I think AIG is an appropriate proxy for the US of A.
good call
Rentenmarks for all
Truer words were never spoken.
i would say so
Tyler, ZH....I love you guys...your work is simply fantastic and I cannot thank-you all enough for all you guys bring to light...additional well-deserved donation on the way.
Look at Lehman Brothers (LEHMQ.PK) - up 125% today. Makes sense to me.
lol wtf 200%?!
Update: Finished day up 200% with 73 million shares traded. It's late 1999, early 2000 all over again!
Leh Bro +200%
WaMu +35%
Rock on FGIC index!
Can someone explain to me what those 5/100 option chains for AIG mean?
Options issued b4 the reverse split, with strike prices referenced to the earlier pricing levels of AIG.
Bob, I got a bad feeling on this one, all right? I mean I got a bad feeling! I don't think I'm gonna make it outta here! D'ya understand what I'm sayin' to you?
Be patient fellow bears:
China’s SOEs May Terminate Commodities Contracts
Any such move would be a major blow to investment banks which service commodities hedging operations for Chinese SOEs on the international market
Quote:
(Caijing.com.cn) China’s state-owned enterprises may unilaterally terminate commodities contracts as they try to cut massive losses from financial derivatives, an industry source told Caijing on August 28.
According to the source, China’s State-owned Assets Supervision and Administration Commission (SASAC) has sent notice to six foreign financial institutions informing them that several state-owned enterprise will reserve the right to default on commodities contracts signed with those institutions.
Keith Noyes, an official with the International Swaps and Derivatives Association, a trade organization, confirmed that he is aware of the SASAC letter, but provided no further comment.
Foreign brokerages usually work through their Hong Kong operations to sign over-the-counter derivative hedging contracts, according to an investment banker whose firm is involved in the business. Hong Kong and Singapore usually serve as venues for arbitration over such transactions.
Most investment banks may "just swallow" any losses arising from canceled contracts, the executive said, adding that any losses are usually made up for with compensating trades.
Investment banks "just earn less" from such transactions, he said.
But any such move would be a major blow to investment banks which service massive commodities hedging operations for Chinese SOEs on the international market, said the executive.
Chinese SOEs have suffered massive losses from hedging contracts since the onset of the global financial crisis. SASAC and the National Auditing Office has been investigating derivatives positions trading since the beginning of the year.
A source from a state-owned company told Caijing that most of China’s SOEs engaging in foreign exchange and international trade have participated in derivatives trading, involving capital topping 1 trillion yuan.
Looks like the SEC could use some employees from the SASAC. I'm sure they'll be cheaper, so they wont have to complain about their tiny $1bill budget, and obviously they're a hell of a lot better at investigating the right issues.
$150 Billion seems like a large loss to just swallow. Who are these six investment banks?
330pm, ramp job expected
DJI drops 25 points. Somebody cashed in.
No ramp job today. Winning streak must be sacrificed on the Altar of the Almighty Dollar.
not quite...
If you could look at historical correlations between individual stocks and the SPY, you could statistically test whether the correlated movement between SPY and AIG today is just due to chance (unlikely) or a meaningful correlation (likely). That way you not only convince trend followers but you convince the unconvinced.
hahaha, as long as enough liquidity providers agree on the price rules, a stock like AIG can follow any pattern or function of other prices. no one will/can step in and stop this without blowing up.
Primary rocket ignition on AIG attempted at 3:17, but booster scheduled for 3:30 failed to kick in. I am REALLY curious to see the last 10 mins of trading today.
haha well done sir
This one easy.
Government=market=AIG
Very true. AIG = America's Iniquitous Government, so by definition it must equal market.
she couldn't find her butt with both hands glued, stapled, and rubberbanded to her ugly ass.
Now yer jammin', TD!!
Maybe the US Gov will sole-source all health insurance coverage to AIG? Wouldn't that be a hoot?
DX has been trashed to get their gains.
http://quotes.ino.com/chart/?s=NYBOT_DX&v=d6
Occams Razor my friends...
The simplest conclusion is that if AIG appears to be a proxy for the S&P, then AIG and the S&P must be in similar business conditions.
Ergo, S&P is Bankrupt, and likely Gov't owned as well.
Invest accordingly... and remember that as a taxpayer (bagholder), you already own lots of this stuff, so a reasonably large short position is actually just a hedge.
Careful. If trading of non-AIG stocks = 0 then any trading of AIG that is positive will increase the SPY value.
Your assumption that AIG is a proxy for S&P500 (today) and if AIG is bankrupt therefore the S&P500 is bankrupt is invalid.
Beautiful, Amazing, Mind Boggling.
The floodgates start to open a little wider at Cerberus Capital Management, surprised to find its investors now want $5.5B back from its asset base of $7.7B - up from $4B just a few days ago.
This type of NONSENSE will not end until we put an END to the fiat money system and bring its perpetrators to justice. No amount of regulations and laws will fix our financial system and economy. To quote Ayn Rand:
"When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and to become fodder for the immoral. Do not expect them to produce when production is punished and looting rewarded. Do not ask who is destroying the world. You are."
+a google
AH a fellow objectivist...but the road to serfdoom is a long walk off short plank just now.
It will collapse under it's own weight. Just be patient.
Gordon, thank you for posting that quote. I googled up Francisco's speech and took some time to read it again, and frankly it brought tears to my eyes.
The sun has set and twilight approaches, but words like these give one courage and hope, and maybe for some, the BALLS needed to laugh recklessly at the impending night.
http://www.quantumlounge.com/data/money.htm
I'm sure Mary will have a robust discussion on why BK companies trade at 50 a share.
Did you see leahmans pink sheets run today? On HUGE volume...
Might as well be sitting in vegas at a blackjack table where the dealer has 4 decks of kings and aces.
I'm sorry Ty, could you repeat that in English for Mary (& me)? So that she can get on that right away. snap snap.........lol
AIG at 55.90 is clearly a superb buy....one might say it's a steal.....
if nothing else it's a 5 foot green shoot.
Read the pumpers on google financing calling the stock to go towards $400
poor fools
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
Whatever comes out of these gates, we've got a better chance of survival if we work together. Do you understand? If we stay together we survive...
What can anyone out in the blogosphere illuminate us trolls about DTCC and CEDE & Co. - the owners of every share certificate that we thought we owned…are they really an arm (straight arm, held out at a 30 degree angle) of the Fed? And, if we call our broker and request that they send us our share certificates, they will say, "what certificates?"
And, as the plot thickens, like a good roué for some spicy Cajun jambalaya, can they effectively "call in all the shares" for redemption should the economy trash, and to raise capital and cash, they would virtually loot our savings and a slew of EU securities right out from under us. Or am I being spoon-fed a recipe of conspiratorial madness…
baldone...TD wrote about DTCC....search the site, the info is here. One article even has a neat handy-dandy satellite photo!!!!
can anyone tell me what software is being used for those plots?
thanks
Bloomberg
And btw, what's the skinny on the Gov't/Pentagon/Fed advising federal employees in embassies around the globe to "stock up" on local currencies, so they can "survive" a banking crisis here in the good ol' USA? Are we lemmings lining up for a front row ticket to the edge of the cliff, and when they pull a "banking holiday" some late Friday in a few weeks/months, we will find our dollar devalued by another 50% and a new currency in place…the lowly Amero, or some such FRN? Maybe I have too much time on my hands, but if this is legit, shouldn't we all start closing our accounts, cashing out, take that IRS hit and as Uncle Remus once said, "lay low with the figgits"?
Ponderous decisions in the making…and, who among us (John Kerry) doesn't want to be the last man standing when the whole shebang goes into the crapper…
i have read that the state department has shipped
huge quantities of money to key embassies in
anticipation of serious difficulties which could
be related to war or to financial crises...bob
chapman is the primary source and he has
confirmed it in 2 letters....
i have read from numerous reasonable commentators
that a bank holiday is in the making...i am
predicting october...
the banking situation is so bad that the fdic
had to recruit a foreign bank to take over
guaranty last week....
prudence would dictate taking steps to preserve
emergency cash - preferably gold - and having
surplus food on hand...
There were two separate foreign banks last weekend, Spanish banks no less.
after thinking about it a bit more it probably
has less to do with usa bank insolvemcy and more
to do with new world order and one world
government...engineered dependency...
A friend of ours who manages $4.0+ Billion told us that upon returning from Europe to raise funds in June that (1) fund-of-fund managers had only 50% of their money left to invest, and (2) "...there is no market." Literally, he said the market as we once knew and traded, was "gone." He said markets are now being dominated by government and Central Banks. The risk of failure for these government are extremely high. Under those premises, coupled with so-called HFT's and computer led trading (estimated at 70-80% of today's volume), it is no surprise that all we see in today's markets are quick "price adjusted spikes", with little true order or volume flow, causing the markets to sit artificially range bound for long periods of time. When one observes AIG, FNM, C, FRE, plus instruments like Oil and Sugar, literally trading tick-for-tick in lockstep with the S&P's in illogical patterns, that tells us that indeed, 80% of all volume is controlled, computer led HFT's, coupled with government mandated price levering (through firms like Goldman, Morgan, JPM and Merrill/BAC). When this strategy fails, and it eventually will, the downside will prove fatal for these issues and instruments, along with macro prices overall.
best post on this thread....thank you!!!
please continue to share as you get first hand
news...this was excellent...
Your friend idn't Jimmy Simony is he? Ends justify the end. Algos killed the equity stars. The common man will never invest again in any national market without the grinding fear of manipulation stealing his ROI.
Great Post! You exceed us all.
"The risk of failure for these government are extremely high"
Exactly. This is a political event.
So the market isn't the house with the rigged game, the government is. They can't overtly tax us as much as they need to bail us out of this, so they are running a crooked casino, hoping to earn the wad back. And really, who else to do it? We got the baddest, best equipped, bouncers the world has evah met.
That would require Shapiro to admit that the "liquidity providers" are leading the market around by the nose, which she undoughtably knows of, but falls in line with her bosses' agenda.
you would too if you were as pretentious and
as condescending as that gasbag who is nothing
more than a sock puppet for soros, rockefellers,
and other financial terrorists....
she is an advocate of the investor but not of the
american people....
BLUE HORSESHOE LOVES AIG.
Harry Markopolus for SEC Czar. Sec should be paid via project/case success. Imagine, who moved my fucking gov cheese!
Next thing we know ACA Capital will be rising from the dead, and dragging Bear up with it.
Damn good point--the only reason why these are traded is that the NYSE makes fees
The rabbit hole is getting deeper and wider... Look, I think I can see light down there... My, is that the nose-clearing, pleasant aroma of brimstone I am smelling?
Trader Crack: AIG Goes To $100http://247wallst.com/2009/08/28/trader-crack-aig-goes-to-100-aig-c-bac-h...
shall we use POS AIG as a proxy for SPX, then "happy days" are over
http://screencast.com/t/MdNsMaZNzVd
I don't know why we are back to the gloom and doom scenario again. while it is true that economic conditions are still bad,but you are all forgetting that sa. And sving rates are high,and banks flushed with cash. ranted,I do believe they are insolvent,but isn't that what the fed is taking care of?aking all the toxics ftom their books and in the process converting those new savings into money circulating?As to all those warnings that I have read myself, I think even if they are true,they might be a precaution of a worst cas scenario. the other scenario,they were all manufactured so that people don't buy the rally early on thinking that it is dangerous. But as you all know the mentality of the herd, they will all decie to join in when it keeps going higher,which means they will come in after it is already became too expensive, And this way they don't pull out when the time for the next crash comes. If you are up 100% in a short period of time,you might decide you had enough,but if you are up only 10%,you want to hold thinking that you will earn more. And then it is time to Change Shapiro,and bring back Cox..............
HOLY CRAP!!!
I was laughing my A$$ off when I read this. Nice one!
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
This is bs - so what if they BOTH WENT UP AT THE SAME TIME ZOMG!!