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Some Rumblings In Inflation Land
Just out from a trading desk:
**Big eurodollar trade**.... E$ SHRT JUN (1 YR MID) 9925-9937.5 C SPRD (-) VS GRN JUN (2YR MID) 9800-9812.5 C SPRD (+) paper PAYS 2.5 ON 25K
equiv to selling edm2-m3
Looks like "someone"(Ahhhpimcotchooo) is starting to hedge big.
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"GRN JUN"
Must mean "green junk"
Bid deal. Only 25K contracts.
And this means......?
Default looming.
would also appreciate some details, what exactly does this trade mean? who will default? comex, a european coutnry?
Bill Gross believes inflation is coming bigtime and is hedging accordingly.
He has effectively locked in a $25bil. (25k x 1mm contract) loan at current (low), pre-SHTF rates or is it just a bet on the spread directioon between the two contracts?
If Bill is short treasuries wouldn't the hedge the other way . Looks like he's loading up on the same side of the bet .
I presumed that the debt ceiling would be raised, particularly in this new spell of Patriotic weather created from the "assassination" of the boogeyman.
Do you think they will stick to the current limit and if the spending doesn't meet revenue, default?
Coincidence GS/MS turn neutral on treasuries - or is that an edict/decree
Bet on short June '12/'13 euro$
3 month eurodollar futures: somebody is selling (or wants to sell) 25k contracts of the june 2011 and buy 25k contracts of the june 2012 contract. As a naked trade it would imply an expectation of the spread narrowing - or in other words the curve flattening. Probably by near rates rising, but also quite possibly by the far contract rising - or the 3 month rate in june 2012 falling. It is NOT a big deal, could easily be a swap desk hedging a LIBOR fixing or just the rolling of some expectation of continyed low rates further out into the curve. It does not imply much.
Default coming...last time this happened the market fell over, libor locked up and that started QE1, Bank bail outs, TARP 1/2/3/4/5, etc, etc.
This time...well, kiss it all goodbye. printing money won't work.
double post...
Silver Bitchezzz!!!
"Mr. President, we must not allow a mineshaft gap!"
Translation?
Long farm supplies and ammo?
Check and check. +1000 rounds
You better have more than that. 1000 rounds per gun maybe. With a minimum arsenal of 5 guns.
Who says I don't...? ;-)
I'm from Texas, buddy.
Suggested inventory: 2 long guns, 1 shotgun, 1 rifle. 3 handguns, 1 small calibre for carry, 1 medium with flexibility, 1 hog-killer.
Saiga 12, Ruger Mini-14 (.223/5.56), Ruger LCP, Taurus Judge, and last but not least, Chiappa Rhino.
Anything to enhance the operability, reliability, and accuracy of the above items is also recommended. Scopes, laser sights, speed-loaders, high-cap magazines, etc.
Nice.
Two are one and one is none.
Please expand. I'm always ready to be educated. Your comment is not helpful.
These are within the price range of any regular folks, have widely available ammo, don't have to make you look like a freakin' commando (first to be targeted), and are easy to maintain.
I'll chime in.
"Two are one and one is none" = "redundancy good". In your planning, plan on the fact that stuff breaks, jams, malfunctions, wears out, gets stolen. If you think you need one shotgun, better have two. If you need three pistolas, better have four or more. When you really need it, you need to have a backup or two or three. Applies to all requirements - not just firearms. So, for planning and preparation purposes, one is none, two are one, etc.
Or so they say.
Oh, I'll agree wholeheartedly on your "excess is best" philosophy. I was trying to lay out a minimum holding of PPDs (personal protection devices). My own holdings exceed the above inventory... and include an array of items not dependent upon firing pins and/or explosive charges.
I include smoke bombs, slingshots, archery, long/short knives, and animal traps (humane as well as the nasty kind) in the mix.
Long farm supplies and ammo?
So much for the Bin Laden bounce on the dollar.
Breaking News: US Dollar confirmed as second "human shield" casualty in Bin Laden raid.
+1
And it became so apparent when Bin Laden's abode was "valued" at $1MM !
Really, who knew that the MERS RE bubble had made it to Pakistan?
Bounced like a bag of sand on rice paper.
Quite often, on zh, this trader learns something new...
Awaiting translation for above hieroglyphs
Made a chart prediction of coming gold bubble and its relatively modest (25%) correction before returning to 2000 USD reached in peak:
http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&p=32176#p32176
Feel free to object based on rational or irrational grounds. There is still time both to join the move up, and to jump the ship at the peak ( October 2011).
I think you are right on the direction but fear you are underestimating the correction. My spidey sense is seeing the potential for a perfect storm in manipulation. They HAVE to knock gold down and silver is the easiest route. All that remains is for them to make the official announcement that the silver market is being manipulated (remember the rumors of a billionaire or government trying to corner the market?) then start interventions to 'correct' those manipulations. Short term the price could drop like a stone taking gold with it. $900 gold is possible. Long term they can't stop the trend. The price of a couple ounces of silver in puts right now might get you several ounces of gold in a month or two. Most likely you lose your hedge money but I have a weakness for the big picks.
Silver cannot take Gold down, but Gold can take silver anywhere.
As far as this;
$900 gold is possible
While anything is possible, if they are foolish enough to pull that trick, they will have created a NEW back up the truck scenario.
At $900.00,I will go 95% IN.
The Great Magic Price in the Sky may say $900/ozt, but the guy holding the actual metal will probably be demanding a different figure.
Good luck with the "hold and wait" strategy. The Donner Party has some advice for you.
I am Chumbawamba.
At this rate it will be 1.50 by EOB.
http://en.wikipedia.org/wiki/Eurodollar
Domo Arigatou.
25k is big? it's peanuts
Bullish of course.
I want to see a lot more of this before i get too confident.
Yeah, I'm also going to need some "special help" to understand that...
It's in ThompsonReuterish, you can't understand that...
I really want to!! Maybe time for a remedial page on ZH that I can quietly slink off to in shame? :)
It means just shorting the 2 months vs. 3 months rate differential if I am correct.
Hedging cash by Pimco i suppose till the end of QE2, just in case there is no QE3, and the rates don't come down
Cheers.
I must apologise for beffore, because I was wrong. I didn't say it right.
It is selling the spread of the euro dollar 3 months red/M2 (June 2012 future) and the euro dollar 3 month green/M3 (June 2013 future).
If You don't know, they are interest rate futures, but You must look at them in the opposite way, for example if rates rise futures quote drops, and vice versa.
It is a bet that the difference betwen the too rates will narrow, meaning the same as i mentioned before, but in different contracts.
Dont be embarrased.
Everyone starts their journey in ignorance and ends with the false confidence of the pretense of knowledge.
awesome
I'm still fighting the denial stage.
Large amounts of alcohol helps a little.
heh
I am confident I took a wrong turn somewhere on my journey and have ended up with only knowledge of a false pretense. Backtracking now.
But I read it on the internet!
Ditto
No shame. The vast majority of us can't fathom what this means but that is one of the best parts of this site, we to learn as we go. Often one of the more learned ones will explain but sometimes you have to wait until next time knowing only that there are deeper layers to explore in this game we play. Have mercy on us Oh Learned Ones!!
Thanks everyone for the kind words. I meant the "shame" part as a joke, but nice to see there are knowledgable people willing to help.
We know you were teasing!
How is The Bernank going to ignore such things going forward? How is he going to maintain what is now already a laughably stupid, on its face, assertion that inflation is tame?
Maybe the jig is really up.
I'm not saying this leak has any credibility or not, or even that PIMCO is making a smart or stupid bet if it is true. I'm merely saying that if the trends are so visible to some big players to make such seemingly either all-knowing (as in, they have good information) or all-gambling (really chasing alpha) moves, then The Bernank is going to have a lot more to worry about than the increases in gasoline and groceries and commodities than we've seen so far.
(Ahhhpimcotchooo)
Bless you.
Could someone decipher the hieroglyphs please?
pimco bill gross
Review this doc, follow link..(make sure nothing is in front of the www in front...
www.mfglobal.com/File%20Library/Home/01%20PDF/GMM.pdf
DJIA down 119 point, and the Dollar index is still hovering around 72.95.
Interesting...
It'll close to the green......you just have to believe in the lies!
I don't know, the candlesticks can't seem to make up their mind. I'll have to check the commodities to see what the action is there.
Crap, no action there either. WTF?
Its going down, because I decided, to all your benefit, to go long the Dow.
Altruism is a buzz on its own.
ISM Services just blew chunks at 52.8. QE3 can't be far now.
http://www.fundmymutualfund.com/2011/05/big-miss-in-ism-non-manufacturin...
Gotta tank first, need the scare tactic to convince the sheep to give up more money. We know the name of the game. Short, then long, buy bullion the whole way.
This looks like an election bet. Kind of says debt default after the election.
a hedge... in case... all doesnt go to plan.
Okay I'm lost.
You seem to know something about personal protection devices (see our posts above) so all is not lost!
I should have added a list of non-percussive PPDs to the list as well.
Gross is probably long treasury puts and gold.
Where the FUCK is Prechter/Denninger and the rest of the deflationtards?
When it hits the fan there will be enough fallout to let the deflationist point to this smelly spot and the inflationists point to that spot and all can declare victory. It will be a smelly victory for all.
So, you've noticed the focus on different spots by the opposing sides, I see.
To me deflationists are right about the rising value of money as the money substitutes disappear (flow down through Exeter's Pyramid). Where they are wrong however, is assuming the dollar is money, rather than just another money substitute. It all depends upon perspective.
Right now, as measured in gold, we are already experiencing deflation, yet measured in dollars, we see nothing but massive inflation (with $2T more desired by 12/12).
Yep, all sides will claim victory, as each views the world through their own belief-based perceptions. Only one view though, will profitably survive it.
Ladies and Gentlemen, place your bets!
Tyler help us retards out. What does this mean?
It means the worlds largest mutual fund is singing "so long, and thanks for all the fish" to the US economy. Buy PM's or learn a trade if you don't want to get fleeced like the rest of the sheep.
I have and I do.....still don't know what these glyphs are telling me though.
http://www.cmegroup.com/trading/interest-rates/files/IR-172_Eurodollar_O...
sorry for the wise ass remark at first.
Thanks. No offense taken. I have three kids and an ex wife. Wise ass remarks are part of my daily life :)
Give it up.
Yhe pros you are beggin for help are part of the problem.
ok so still, NOBODY has deciphered it into plain english. do any of the readers here know what those symbols and shorthand mean? please expound, glyph by glyph. thanks in advance!!
scroll back to my earlier post - I am sure it is a red herring, or at least of little consequence. The sell sides of the Futures broker/trader outfits (Mann, JPM, Cantors et al) make this shit up all day long to try and impress their clients about how much `flow and depth` they have. In fact I am suprised it got a mention on here at all.........
thanks!
Thanks
Thanks.
I was about to ask for someone to translate this from English to Dummy for me too.
Its a bit of a jumble, but I'll take a whack at it.
Typically this kind of spread is the same as a 'vertical spread' where you make two trades using options of the same expiration but different strikes. Since the trade is shorting a call spread (a call spread being used to anticipate increased prices), the trader here is essentially taking a short position in eurodollar.
As the final bit says, it is the same as shorting the June 2012 Eurodollar futures contract, and the June 2013 futures.
His 'lock in', since he's shorting premium and can't benefit from any rising values - if I'm reading this right - is 2.5 'ticks' on an investment of $25,000.
But who knows :)
Hope that helped. Also, its common to refer to the Euro futures as colors when quoting a year out from the 'front'. I forget the actual nomenclature, but its part of the whole thing. Look up 'strips' and such for clarification.
Aw, hell. Doesn't anyone just trade a simple market any more? There is a simple reason I don't have a brokerage account -- anywhere. Isn't all this paper shuffling what got us here? A hedge used to mean something in the futures market: "How much wheat/flour/etc will I need for my bakery in October?".
I know this wouldn't fly because of the 'regulators', but I dream of an alternative market that expressly forbids high-frequency trading strategies of any kind. You know, what the charts used to look like when technical analysis and fundamentals meant something.
I suppose it would have to be in a country where the local currency wasn't being devalued to all hell. Limits the scope somewhat, but if it was online it really wouldn't matter what the physical location was.
Or just screw the technology and go back to open outcry and paper trading cards.
Yeah, fat chance.
It's not a fat chance, it's obscenely obese.
pimcough!
Variable rate long dated CD`s bitchez....lol
When the country defaults does that mean I get to default on my debts? I'm sick of paying on this under water house in this illegal alien/section 8 infested neighborhood and what's good for the goose has to be good for the gander right?
Beat the rush -- default now. You'll be lost in the crowd. Just keep your head low and don't talk to anyone you don't know.
a whatchamacallit is going to happen ,, definity
ezzackly!!
Catch as many physical ounces of gold/silver falling knives you desire on sale. USDINKer just hit a new 52wk low today. This has got to have some folk's sphincters puckering to get their hands on PM's. Paper fiat dollar still not buying into PM's sell off! A tale of future woe! Not to those holding physical PM's come July's end. What paper ponzi store's of value anyone has the next 90 days will be racing to zero along with any fiat currecny held. These coming 90 days in precious metal will be much more exciting than the last.
Here's one thing for sure, a store near you is still accepting smelly rotten fiat in exchange for physical silver at a great price.
Keep your eye on the DXY. That's all that means.
That's exactly what the magician, Shalom The Great, is saying now up on the stage.
Prestidigiflation, bitchezzz!!!!
I'm not sure I understand the implications of this. I trade eurodollar futures, which is NOT the EURUSD. The Eurodollar futures have only changed 2 ticks the entire day!
By the way, June Eurodollar futures have open interest of more than 1 million contracts.