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In The Footprints Of A Whale
It was only last week that we highlighted the facts and fiction behind JPMorgan's prop-trading CIO office activities and Bruno' London Whale' Iksil's magnificent market cornering 'hedging' activity. Well, Bloomberg's chart-of-the-day provides the clearest and most destructive indication of just how ridiculous this supposed 'hedge' position had become. Thanks to Mary Childs and Shannon Harrington's data scrubbing, its turns out that, according to the DTCC, the net notional of contracts on Series 9 on the Investment Grade credit index (this is the credit derivative index that is most closely tied to the massive haul of outstanding tranche deals that remain in the market) surged an incredible 65% (to $148.2bn) in the last 14 weeks. As is clear from the chart, relative to every other credit derivative index this level of activity cornering, which managed to drive the index 18% below its 'fair-value', stands out rather dramatically and perhaps should jog a few regulator's from their porn-surfing lunch-breaks. The footprints of this particular whale seem a little too large to ignore but that then again, Spain did manage to sell some short-term debt so who cares?
Charts: Bloomberg
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It is all about keeping the financial Ponzi going. Nothing else matters.
Nothing!
In fact......some real regulation will just hasten the collapse.
Animal spirits anyone?
Give me the Dragon, the Unicorn and the Lion.
Had to happen, Chronicles of Narnia sequels are starting to re-use random items as part of the title.
It's more like the "Scarecrow", the "Tin Man", & the "Lion"...
...& Toto too
This cast of characters won't rule the roost forever,
they will eat themselves and suffer divine strikes of lightning
their old english New York minute is almost up.
The PIG never rules for very long.
PWND bitchez.
Forgot the phoenix.... and the tortoise.
Well, theyre still not going to find any retail to pass off the pump to so I guess theyre entertaining themselves manipulating broken empty markets, gee have fun with that fellas.
A few connections, some social engineering, a big-ass sell order and bada-boom! you got yourself a crash!
There’s that word ‘notional’ again. I think a four letter expletive would be more appropriate.
Credit default swaps are shit.
This 'market' is totaly fukered. Its all 'bullish' though I guess as long as someone bought some debt with a gun to their head. And I wouldnt count on this grabbing some 'regulators' attention away from their busy porn surfing schedule, why would it.
If the 'Markets' are global central banks' magicians making up the Plunge Protection Team, then the 'Markets' aren't fukered, they are the FUCKER.
their Machina is working as intended.
yee Old PPT went in strong waves today
stopping the slide of the
all bitten forbidden APPL
while pumping the MSM with
all tasty distracting disinfo.
A White House Cumgate over $47 dollars?
bad seeds for sure
Uh... He's managing "risk." Something that, in the past, banks avoided. Now they lay it off to other suckers for pennies. Doesn't matter what you call it. It is s**t.
in plain english please.
The whale is trying to make enough money betting against gross trying to front run the fed that jpm can buy pimco for pennies on the dollar with the cds profits
neighborhoods 1-8 have had alot of fires . you invest in a neighborhood (trench 9). you buy fire insurance on the houses in the neighborhood from multiple insurance companies to hide you intent. however when you buy the fire insurance you use stats and a false realtity where the fires have stopped on the agent and so the cost of that insurance is relatively low. you buy. buy more. buy even more over the last 16 weeks. somebody totals up all the moneys that will need to be paid out if neighborhood nine burns down (the chart red line). zerohedge picks it up and now we watch everyone living in that false reality stick there heads up there A@# even more.
notional value is total moneys in event of CDS.
Beyond my paygrade...
So does this say credit worldwide are getting riskier? So why is this a shock?
It says that anyone who wants to play in the credit index space is going to have to go through Bruno the Hun. It also says that if the masses as a whole believe credit in this wedge of the world's debt is getting riskier, then Bruno and the boyz stand to return even more than the 18% they've already engineered.
Awareness deficiency like this...
http://www.idiotonastick.com/talk/images/thefarside-jan28.jpg
I don't see no stinking bear (market). :)
Were they making money on the CDS's or driving the index down so they could buy it cheap? Probably both.
Markets don't move. They are moved.
It's all about the individual tranches and not so much "making money on the CDSs".
So I get that they either know what will happen or can make it happen but what is their bet? Default or no default? Or is the object to make money just from the manipulation? Swaps and spreads are not my strongpoint but it's important to know what the whales are thinking.
That is a parabolic move in credit risk in a world of make believe US economic recovery! That being said who would trust the credit default swaps to pay off on financial armeggedon?
This is as good a place as any...Exploding Whale Video:
http://www.youtube.com/watch?v=8Vmnq5dBF7Y
This calls for the CFTC to hold its 13,234th hearing on whether or not we need position limits in key index markets. Of course, JPM and all the major Wall Street banks will be invited as always to provide guiding comments and opinions from the industry.
tyler: this link doesn't work very well
It was only last week that we highlighted the facts and fiction behind JPMorgan's prop-trading CIO office activities and Bruno' London Whale' Iksil's magnificent market cornering 'hedging' activity.
i think i musta missed whatever it is that this doesn't link to...
AND WHY IS THIS SUPPOSED TO BE THE 'LONDON WHALE'? ......
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