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Pre-/Post-Default Cash Management Bill Spread Collapses... To Negative
Back on July 28, we conceived of an alternative trade to the "sell CDS" on a defaulting US as a win-win proposition, in the form of compressing the August 2/August 4 Cash Management Bill spread, which at the time was as high as 20 bps. Since a default would mean nobody would be there to collect, betting everything and the kitchen sink on a levered compression to zero in this trade would be a sure way to make money as the August 4 CMBs would mature and pay off par, or else the US would be insolvent. Specifically, we said: "the reason why this trade, with lots of leverage would be ideal, is that, as mentioned above, if the US does default, Repo desks and Prime Brokers will have much much bigger problems, and two, as we pointed out, it will imminently become "uncovered" that the Fed has a secret stash of cash, up to the amount of about half a trillion, which may easily carry the Treasury through the new year, in which case the spread will immediately collapse. Of course, we could be wrong, and everyone who plays the compression will blow up in an epic supernova that will make Boaz Weinsten's legendary basis trade annihilation seems like amateur hour." We were not wrong. And in fact, as of last check, with the August 2nd CMBs already matured, the spread is negative 1.2 bps due to the scramble into ultra near term securities courtesy of the collapse of the ponzi equity stock market left and right. To those who made money on this trade: congratulations.
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11:59:58
Time has now been rolled back to 11:30
When they escorted out that retarded downs syndrome esque Gabby Giffords to vote against the constitution and for pure dictatorship, I knew then the USA was completely gone.
Thank god complete and total economic devastation will continue to be maximized for my viewing pleasure.
That's too much hatred for me Michael. Gabby's fate could be yours or mine. I think I'll err on the side of compassion thank you.
It wouldn't be ours. She was a pawn for a probable psy ops and then goes out and votes to give more cash to the same people.
She was a pawn for a probable psyops?
ARE YOU TOTALLY FUCKED IN THE HEAD?
WHAT THE FUCK IS WRONG WITH YOU PEOPLE?
In the summer of 2010, when ZH went after the doomer clicks, this place slid straight into the ditch.
It's a shame because ZH had so much momentum and opportunity to make a difference.
ZH is making a difference. You don't like Ron Paul. You don't believe the government would 'off' somebody for political gain/control. Who the fuck knows what else goes through your head...
Maybe you are the one that is "fucked in the head."
Someone with a Hitler smiley face avatar is complaining about "doomer clicks??" What is wrong with this equation?
Your fate could be tossed into one of those half million family size body caskets Halliburton made for us. You know they each can hold a family of 6.
My google skillz have failed me, got a link? I found some Youtube stuff but I clicked the links and it was about TSA, not this.
http://suzieqq.wordpress.com/2008/07/21/a-half-a-million-plastic-coffins/
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&add...
Do you also denounce the Libs calling the Tea Party terrorists, McCreant?
Terrorists? Really?
It's not just the liberals who mock the Tea Partiers - it's everyone, except for political hacks and charlatans like Bachmann, R&R Paul, and Palin who pander for their votes.
It was just a few days ago that John McCain called them "hobbits...who will return to the center of the Earth." And it was GLENN BECK (the most whacked-out conservative clown on Earth) who equated libertarians and Ron Paul supporters (who are often Tea Partiers, too) with terrorists.
Bachmann and Palin are understandable. Why do you hate on Ron Paul?
I'd like to hear an answer to this too.
You are talking to a former lib. I look back on those folks and understand that their very positive impulses have been twisted and misguided. I can't hate them because I understand how hard it is to see clearly. I have invested some serious time in this.
A real conservative wants to conserve, very simple. I admired that too and realized that in my personal life I was very much like a republican. That was the point that I decided that each had good things they were trying to stand for, that both sides are trying to do "the right thing." One wants to protect the weak from being exploited, the other wants to protect the rights of the strong to not be bled dry by those who would exploit this otherwise good impulse. It is a dynamic tension.
I denounce anyone using a blanket characterization of tea partiers or libertarians (terrorist is an empty term when you get down inside it). However, I don't trust the tea party yet, because they have been taken off message by republicans and corporate interests. If you told me Psy ops were at work to discredit the tea party or libertarians and twist the message, I would believe that. At a more macro level, the whole politics game is designed to create teams and keep us distracted. You know this.
I saw an old movie the other night called "No time for Sargents." In the opening, an army recruiter approaches a "hillbilly" and says he is from the government. The hillbilly asks, "What government?" I couldn't stop laughing. Until we get to the point where we say "What government?" and "What Fed?" we are screwed. They have us because we let them tell us the definition of the situation.
Dude, too soon.
From one freak to another.
Not too soon. You assholes are too soft.
welcome to the cynical, evil world of doomer libertarians....
I can think of $14TRILLION+ reasons that cynicism is called for these daze!
Too soon and pointed in the wrong direction. If it had happened to a guilty banker I might have had a twinge of 'justifiable', but you clowns don't have a clue how that woman thinks and what good she might have done. You just lump all legislators into one category. You are the neo nazis and you will be the victims of your own lack of sympathy. If you had a clue you would know that Haman was hung on his own gallows.
My thoughts exactly.
I'm appalled. I can deal with sick humor. I can deal with dark humor. I can even deal with humor directed at those who cannot defend themselves. But really? Is this necessary?
You can't be happy for the person, that she's come back so far? Sure, she'll never be the same, but let's pull small victories where we can - right?
I agree, the vote was horrendous, it was misguided, it's truly dragging us down the road to totalitarianism. But why take it out on someone whose condition is no fault of her own? I didn't agree with her before, have even less reason to agree with her on this vote - but I can still appreciate the token effort made on her part.
I really am having a very hard time with some of the posters here. It's not dark humor - it's malicious, misguided, and vicious. Totalitarianism has nothing on people who make comments like this - they will embrace it with both arms.
I'm appalled. I can deal with sick humor. I can deal with dark humor. I can even deal with humor directed at those who cannot defend themselves. But really? Is this necessary?
You can't be happy for the person, that she's come back so far? Sure, she'll never be the same, but let's pull small victories where we can - right?
I agree, the vote was horrendous, it was misguided, it's truly dragging us down the road to totalitarianism. But why take it out on someone whose condition is no fault of her own? I didn't agree with her before, have even less reason to agree with her on this vote - but I can still appreciate the token effort made on her part.
I really am having a very hard time with some of the posters here. It's not dark humor - it's malicious, misguided, and vicious. Totalitarianism has nothing on people who make comments like this - they will embrace it with both arms.
Mrs Giffords at least has an excuse for her brain damage; all the other screwups in Clowngress/Senate, not so much!
In retrospect, you may as well have taught a monkey to push the "Yes" button on Epic Legislation fundamentally changing how our country is governed.
Gabby Giffords is not of sound mind, to be making determinations on how a country of our sophistication is to be run.
Talking about food previously; What's Debbie Schultz's favorite Vegetable?
Gabby Giffords.
When they escorted out that retarded Downs Syndrome esque Gabby Giffords to vote against the Constitution and for stealth dictatorship, I knew then the USA was completely gone.
Monkeys now run our country. We have become, The Planet of the Apes.
Debbie the Jew will be getting a nice bonus for her fine work. So typical.
I just feel sorry for Gabby's husband. So used, so diminished.
Thank god complete and total economic devastation will continue to be maximized for my viewing pleasure.
The only difference between man and animals is;
Man has the ability to distinguish between what is acceptable and what is Not acceptable behavior of society.
Animals don't have that capability.
I agree she should not have voted. I disagree with the venom you aim at her. For crying out loud, she is not in control of how she is being used, that is the very reason we object to her being paraded out there for the vote like that.
The Jew stuff is counter productive. Not all of any group can be characterized as being one way. If this blog is to be a place for hate, then aim it at the bankers and their lackey congress critters.
Talking to a buddy at B of A Merrill . Says that Zero Hedge is now blocked because of the negative stories that have come out on this site.
Heard that a guy named J. Stalin was just named CTO.
I'm glad I left Merrill Lynch back in 2007. Too much "screw the employee" for me.
Egads! I hate it when I'm forced to breath sand!
Make that B of A
You can edit your posts until someone answers you.
It's still coming, only delayed slightly. Like this:
http://www.youtube.com/watch?v=23uuW79KBhE
In some ways, it sucks to be right about all of this. Is it really a triumph when gold goes up? Bittersweet mix. This bet too.
Edit: On the flip side, I LOVE seeing the DOW go DOWN. Nothing bitter about it, the market is reflecting what is true vs. what pump monkeys make happen.
What could have caused this?...
QUICK! THROW SOME GREEN COLORED PAPER ON THAT!
Why not? Just print. I wonder why they even bother telling us that they are printing. Just do it and say nothing.
This is a serious question though I know it sounds like rhetorical sarcasm.
the harder they fall...
Falak, caught the Pooja, Hawa, Halwa references earlier.
Always pleasantly surprised! ;-)
ORI
the more money they get from Uncle Bernie?
They love showing us how they are destroying the country , and they will not stop untill the constitution has gone.
Phaaat finger! Waddell and Reed, you market manipulating monsters (MMM or M3)!
Thanks TD. Profit mofos.
Funny, when I read of finaicial engineering and financial innovation like this, the obvious irony is not lost on me, and hopefully not on you either.
Congratulations? You're playing the same game you scream bloody murder about.
Financial innovation, surely a pox upon humanity.
Congratulations. Indeed.
ORI
http://aadivaahan.wordpress.com/2010/07/13/whither-india/
No, you are betting on an outcome in what we all know is a rigged game.
Now take your pills.
Tyler, making money from money is the root of the issue. Usury. It's how TBTF became TBTF.
I'll say it again, finaicial innovation is a pox on humanity. Gain from it may be a faustian bargain is my point.
ORI
Ill have to disagree. Still find it funny how people come to a financial blog (well, used to be a lot more financial anyway) to argue with financiers. Granted lots of people here just troll, but i dont usually count you in that group. That last statement however, definitely requires a 'cool story bro' response.
C'mon Tylers, you gotta admit the irony ORI's pointing out is palpable: Whither hast gone "Stay out of the manipulated market and buy PM's"?
OTOH: show me someone who claims to have Zero paradox in their life and I'll show you a baldfaced liar. If you can't work a placer mine or dig ditches, you've got to build your ounces somehow.
Totally agree with your OTOH point. But taking a strong turn in the direction of ridding yourself of said paradoxes is a good direction.
ORI
'struth ORI, as far as anyone is able. Can't argue with that.
"Bene disserere est finis logicis"-Faustus
Hey Ori. Just trying to survive bro. I didn't make the rules.
I'm just gona say it....
it will sound crazy... but... I got a feeling.
There it's out!
I got a feeling that something is about to happen. Don't know what, don't know why, but something is up.
Why you ask?
Like I said... I don't know... bad karma I guess.
might be that de DOW will go down 1 point... or more....
Voila. You heard it first.
Who you called Ponzi exactly? APPL or KO?
You guys, just ridiculous..
..and there went the neckline, I think we may get a bounce back to the daily 200 SMA on the S&P, but we shall see lower lows methinks, unless QE 3 is announced sooner.
OK, I am going long into the close, small caps, we are very oversold here, looking for the 200 sma where it should get beat down like a redheaded step child sans QE3
1. Nice call Tyler
2. BTFD??
3. Is this down turn a "must" for QE 3 or 16 what ever it is?
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