Here Is The Stealthy Way Some Are Betting On A Market Crash
Credit markets have been warning of a looming crisis for months...
And as the cost of protecting against credit collapse has soared so the cost of protecting against equity downside (VIX) has started to awaken:
However, as we detailed previously, more than a few market participants have turned to deep out-of-the-money options to protect themselves against drastic downside (pushing the skew - the relative cost of crisis protection over 'normal' protection - to record highs).
And so, with the cost of protection so high, traders are looking for cheaper alternatives.
Since the Fed folded in September (under the same conditions that are playing out now), basically admitting it is terrified to raise rates and willing to backtrack due to market fragility, IceFarm Capital's Michael Green explains, it appears many market participants are piling into par Eurodollar calls:
[the chart shows the cumulative open interest in par calls on eurodollar futures contracts that expire in 2016 and 2017 - basically options on short-term interest rates with a strike price of zero, such that they pay out if the Fed takes rates negative]
When queried whether this is indeed a trade to bet on a market drop, Michael Green responded as follows:
[A reader] thought this might be an attempt by hedge funds to hedge out their exposure to rising interest rates very cheaply.
My initial idea was that it actually could be a bet on negative rates (if for some reason the Fed had to come back into the picture with QE4).
The bottom line: "Deep OTM puts on the S&P are very expensive while par ED calls are relatively cheap. In my view, we are that inflection point where the Fed is going to start to waffle…the bear market beckons and they will not be able to stick with their interest rate guidance. Of course, markets tend to frown on Central Bankers revealed as less than omniscient..."
And the market is already shifting to that opinion - as CME shows, no one trusts The Fed's dot-plots anymore:
Thus, the ED Par Calls are a direct proxy for The Fed's "Dow-Data-Dependent" policy (and given the surge in Open Interest, it seems more than a few agree).
h/t IceFarm Capital's Michael Green
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Yellen won't need another rate hike or rate cut. The markets will ALWAYS correct themselves. The laws of supply and demand are far bigger and stronger than the Fed or any other central bank.
Timing is the hard part...
lol Yellen, Bernanke is drinking Lafite and selling books away from the building fray
Bernie Bernie Bernie
Everyone else will print for special interests
Bernie willl FINALLY print for the people and stick it to big money
At this point, does it matter?
Past the point of no return anyway
You think those trillions are ever going to be paid back and a balanced budget is ever going to be attained?
-----------------------------------BERNIE 2016---------------------------------------
---------------LET'S PARTY LIKE IT'S THE END OF THE WORLD
Awww..There are still people who hold out some hope that the FRAUD and CORRUPTED SYSTEM will somehow not fall apart.
They profit from Corruption. Thus they have incentives tokeep it from crumbling intothe dustbin f History.
Of course the corrupted do not want exposure so they junk your post anonymously.
If voting actually mattered I would vote for the most competently corrupted that I can find.
It needs to become absolutely intolerable before it gets any better...with no guarantee that it will get better.
I raise my cup and give a toast to the collapse.
Bernie is old. He will die quietly in his sleep from an undiagnosed heart condition long before he gets to dismantle the banks. Or else they'll show him the secret files and he'll pull a Tsipras.
sort shorts..... or long shorts.... cant decide!
Take boxer shorts
please, no speedo shorts.
Thong shorts?
http://g02.a.alicdn.com/kf/HTB1ktlyIXXXXXaqXFXXq6xXFXXXU/New-arrival-fem...
my short is now long
A thong made of licorice?
A thong that takes a tool belt. Many possibilities...
anybody ever think the elite actually WANT to crash everything right now and they're not going to intervene anymore to prop it up?
Want to crashi it, No. But I do believe the "elites" have conjured up such a Pamdora's box full of shit right now that they honestly don't know which way to turn. Almost every country in the world is now drowning in debt. When everyone has jumped off the boat of fiscal discipline and sanity and all are in the ocean treading water, who can throw them a lifeline ? Nobody.
I thought that they have 2 choices a) to intervene and do a bigger QE or b) let it crash or try to control the crash.
The problem with a (do a bigger QE) is it might not actually work, imagine they announce a QE 3x bigger than the last and people lose confidence and markets go down, they'll be very very screwed I think. So the thought of them letting it crash or trying to control it makes sense to me. Its not that they want it to crash, they don't have many choices.
IMO
They know that they didn't get the trickle down that they were hoping for, yet they will probably do it anyways, even though the blatancy of corruption and tyranny favoring the nobility is more apparent to the bourgeoisie and proletariat serfs this time.
People seek power and riches so they can do good for others.
The rich building libraries and politicians passing laws, all for us....What is the difference between "trickle down" and simply being pissed upon?
I think they will bailout/QE again and squirt some NIRP on it for good measure. The entire charade is just a mechanism for confiscating and consolidating wealth. These people are communists of the highest measure and they are using capitalism to sell us the rope by which they mean to hang us. When it is over the neo-feudal-corporatist-state will own everything, the useful idiots will be dead, and the rest of us in camps working to pay off our debt to the state which can never be paid off.
They promote capitalism when actually they are only promoting greed. They then promote communism as a remedy to the greed of the individual, only to replace it with the greed of the State. All of it is using ideologies which have some merit to rationalize and justify theft, greed and tyranny. The one thing they will never promote is FREEDOM or LIBERTY, as they provide no means to justify their claims to power and wealth.
The flashpoint in this global battle is actually Ukraine, which is on hold for the moment.
Some people there said no and put up a fight.
They don't want it to crash, but they'll let it, because there is one thing they love more than money, increasing their power and influence. I have a feeling that the elites know that fighting this crash is futile. They don't understand why they failed to produce everlasting bull market. But they fear being blamed, so they will scapegoat the shit out of everything but their own mailed policies.
Order out of the chaos senario?
Now where have I heard that before?
Sure the elite would like to wait another 4,5,6 years for the inevitable crash, so they can steal even more of your money than they already have.
But they made a big mistake when they pumped the Shanghai market. They got caught. The Chinese PTB got sore and rearranged the crash to come sooner rather than later.
Greedy Wall Street. Hoist on its own petard.
If one ever had a fleeting thought of just why the Chinese have hoarded well north of 10,000 tons of physical gold over the past 6-odd years...
... then they'd look like Trayvon, who is Bammy's illegitimate son born in Libya to Momar Ghadaffi's Tranny Nurse. OR,
... they'd be a Conspiracy Theorist
I won't come in your mouth this time.......I promise
Funny how "investment" talk is so much like the talk at the horse track or the craps table.
"Here Is The Stealthy Way Some Are Betting On A Market Crash"
https://www.darkmoon.me/uploads/814x579x2-a.jpg.pagespeed.ic.HqmxWe-y_w....
whenever anyone claims there is no truth in stereotypes i always respond that italians like pasta and japanese like sushi. in other words, culture determines character. the jewish character comes straight from the talmud and it created a true stereotype.
Well the only 'stereotype' TRUTH that could possibly ever be (because the media tells you so) is
All white males are racist, anti-semitic, homophobic, misogynists...
Unless. of course, they're lobotomized metrosexuals with a curious taste for 'The View', Good Morning America, & think Bob Costas is a sportscaster.
+1000 Better watch out though, white males still make a huge, huge segment of the population. They may have miscalculated.
And F Robert Costas. Guy is huge scumbag. The NFL is a government mouth piece meant to pacify the sheeple. Stop watching NOW.
I have no data but i am betting White males make up a large portion of the gun owning populace also..
yeah.....the WORSHIP of money over all else....is a cultural trait, amongst the 'Chosenites'
Humans and most creatures all have one common thread...the NEED for something for nothing. This one weakness is the fulcrum to all leverage used against us...and do not be confused, it is not just about money or even things. We want SECURITY for nothing. We want to be protected without having to actually protect ourselves. And like those receiving heaps of bennies from government who are always first to the feet in protest when those goodies come under threat, we the people will behave the same when our SECURITY is threatened. We will demand our government, our military, our intelligence services...do something...anything but actually do ourselves.
But to your point...YES, it is cultures, but I believe it goes far deeper than that. I believe the our genetics plays a significant role. Maybe not in absolute terms, but in the background, creating predispositions to certain actions and attitudes. We can accept that this is true in just about every other living thing on this planet, but when suggesting such a thing about humans, you are instantly a racist hater of some type. We have a modern society mixing many races and cultures that is relatively new on this scale. Like all other delusions we want to BELIEVE that we are all equal, but we know we are not...not even within a single family.
Humans have been studying animal behaviors for thousands of years. Do we think that we have NOT been doing the same for ourselves? Bernays? We are predictable within boundaries, some defined BY WHO WE ARE.
Proxy hedging in currencies for an equity collapse is for idiots
The real problem is that dollar is too expensive but not because there is a demand for it but because there is not much need for dollar funding of the FX trade due to currency swap lines and regional trading currencies emerging.
The oil is not cheap for global economy, it is the dollar that is too expensive and hence is being abandoned.
This is the true de-dollarization effect when dollar will surge to its oblivion before FED realizes a need for massive devaluation, and balance of the US-world trade, which from a point of view of US consumer will be called hyperinflation.
More on that can be found here:
BLOOD ON THE STREET: Why is price of crude oil collapsing?
https://contrarianopinion.wordpress.com/economy-update/
Where's the probability distribution for negative rates?
There will be some warning before the SHTF:
1. An obvious suspension of civil liberties. Travel - check points everywhere.
2. Full on police state phase 2. Think Catrina but much worse. Cops, Guard patrol, but kill and steal your prep at will.
3. Extreem limitation on money. As bad as you can think, with bank rules changing daily.
4. Lines and more lines everywhere. People want to stock up. Too late.
5. Riots, small at first, then larger with great loss of life.
6. This is a big one. The internet kill switch is thrown. No news other than Baghdad bob BS.
7. Loss of utilities, water and power etc. May go off and on for a few weeks, then dead.
At this time, and any one of these could cause you to activate your plan, you must shelter in place. Plan on having at least 3 months food, water, ammo etc.
LOL we already have met up to #7 bro.
I like the hedging credit idea, as part of a larger hedge. As an example, you buy some banko santander calls, Knowing XLF has to go up in order for your mining stocks put, to go down. Credit and tangibles hate each other
I see much more R/R in mining stocks because commodities are so oversold, and paper metals are so oversold.
Long story short. Would you restore an old car if you thought the right advisors were handling your asset properly...Knowing you're making much better then ZIRP. [ no brainer] Or would you put that money in a CD? { Zero interest bail ins}
I'll plus you one Yen but I wonder what you mean. I am not sure where you where going with the old car thing. No one makes money doing that unless there are underlying assets that are willing to be spent. Restoring classics is a huge money pit. You don't restore things to make money. You restore them because you love the things that remind you of what used to be and have money to burn. I want a 65 GTO and I had the money to buy one but I didn't. What would I do with a car like that? Drive it three or four times a year and pay insurance and storage costs? I am already doing that on a couple of Harleys but the price is cheaper by square footage. Either way, you can't ride or drive any of them when it is -20F and even cold storage is not cheap. I have cars and a couple of them are are junkers but they all start in the cold.
You do things differently than I. As far as gold and silver go, I will play the way I always have and stack. Let someone else do all of the work and then buy. I have looked at miners and I don't think so. Yen, you are spot on about CD's. Bank CD's are a fucking joke. I respect your opinion.
Peace
Lookin like a good bet.
Nikkei down 333.01!
http://www.allstocks.com/markets/World_Charts/Asian_Stock_Markets/asian_...
Yaddi-yadda, yankee!
https://www.youtube.com/watch?v=u06DpcFXc4U
What if the FED hiked rates because they expect a dollar collapse? Because why otherwise would the FED hike rates when the dollar is already strong because of global unwinding trades? That doesn’t make any sense at all. And I find the ‘FED wanting to keep credibility’ meme too thin.
Never ever want to love a woman ever again fuck the world! mgtow
This guy is just "talking his book".
Sum Ting Wong...Wi Tu Lo...Ho Lee Fuk...Bang Ding Ow...
https://www.youtube.com/watch?v=AmclgO6w0C0
This sounds like how the Democrats are televising there debates. You can't make this shit up people.
Still Report #531 Tonight's Dem Debate NOT on TV!
I rebuilt a cheap Chinese space heater earlier. Does that count? I even used cheap Chinese packing tape to re -seal the copper coil after I removed that resistor.
Well, it might be a good indication of where the fire actually started.