Buying stocks up here is no different than spraying one another with high octane gasoline, while smoking cigarettes. What will happen when Greek debt holders take a “voluntary” 50% haircut? See, I am not so much concerned about the losses, which will be horrific. I am interested in hearing the Euro leaders tell CDS buyers of sovereign debt their insurance is no good.
If you own Italian debt and have insured it via CDS, how worried are you about that “insurance” right now?
If Greece defaults, but doesn’t let the CDS trigger, I sense there will be a run for the exits on any sovereign debt in question. It’s like buying puts to hedge your long bets. What would you do if the market crashed and your longs got smashed by 60% and some authority declared your puts to be invalid? I’d never buy stocks again.
There is no easy out, in other words.
In other news, CAT posted good earnings, which bodes well for basic material stocks. And, ORCL bought RNOW (nice trade Howard Lindzon), which should buoy the tech sector. There is definitely a sense of complacency out there. You’ve been conditioned to believe nothing can go wrong, because you’re accustomed to sucking government tit.
Finally, going into November, I will be allocating funds towards gold and silver stocks. Traditionally October is a bad month for gold. Conversely, November is a fantastic month for precious metals. Keep your eyes on Italian 10 yr yields. I don’t care how cheap stocks look. If Italian yields keep edging higher, we will collapse under a flaming vat of refined light sweet crude.
[youtube:http://www.youtube.com/watch?v=CDNdWFV2s2c 603 500] If you enjoy the content at iBankCoin, please follow us on Twitter
What is this? A center for ants?!
Steady ECB purchases of IT 10 years – is there anything else keeping the yield below 6%?
This furry chinch says no…
If they do not allow CDS to trigger when Greece defaults, Italian yields will go to 8%.
In other words all the sovereign debt money has to go into the equity / commodity markets.
Dow 250,000, oil $1500 here we come.
you are out of your mind. You cannot pay Italian govt workers with FCX stock.
I’m not paying Italian, Greek, Spanish, Portugese, et al govt workers shit. Those looking at 60% haircuts on their bonds should have done a better credit check.
The money isn’t going anywhere because the market would freeze up. Poof!
I thought you despised Gold and Silver. Now you are buying them? What gives?
I trade gold and silver. I’ve done it countless times this year. Are you new here?
Several months ago a German economist said that he bought Greek debt and expected to make 25%. He said that he was betting on the stupidity of German politicians to bail out Greece. A Greek haircut may mean that he loses.
Meatballs will soon be Italy’s currency.
or GABBAGOUL
Ha…I had to look that one up being from Texas and all ya’ll.
Gary Savage is planning on long precious metals in Nov. Totally different blog but pretty sharp nonetheless
How can they allow a default and not allow CDS’s the trigger. that would be out of the EU governments hands as I thought the trigger was the rating agencies calling a default.
Fly – do you buy the gold miners or the ETFs?
Major resistance on SPY at $125. If that breaks, all momo traders will chase to $132 or so.
no, resistance was at $123.50. we just broke out. wtf are you looking at?
no, resistance is at $128. You need to be looking at the 103 day, 4 hour and 37 second moving average…
Is that SMA or EMA?
http://www.tradeitdontdateit.com/margincall-movie/
Fly…here is that margin call movie you can watch online
The government’s tits are real, and the’re spectacular …
only if there named michelle caboosa cabesa
Indeud!
85lbs dumb-bell curls 3 sets
I’m ready for a Greek default
then your doing the wrong exercise, YOU SHOULD BE BENDING OVER SONNY !
Ah Zoolander!
Fly what do you think the odds are of the $100 roll for CAT? If things keep going through to Thanksgiving which one is most likely to roll?
CAT, EOG or V?
May be bailing on my short at the top here, but looks like $RUT MACD is strengthening again which means I will be selling my TWM position.
The internals have been incredibly strong the last 2 weeks. The NASDAQ ARMS index hit 3.42 on 10/17/11. The last time the internals were this strong was September of 2010. The NASDAQ ARMS index hit 3.43 on 9/15/10. From 9/15/10 until 2/18/11, the $RUT ground higher by 28%. The largest pullback during this time was a 1-day affair of 21 points / 2.6% to the downside.
I will lose money selling my TWM here but I take consolation in knowing history shows that internals this strong lead to big upside moves and I will make my money back on my currently underwater URTY position. And as a % of my assets, my URTY position is many times greater than my TWM position.
Dr. Copper is back bitches… back to back up 6%.
Bears need to do something…VIX below $30; Materials/Financials leading way… QQQ up 1.6%.
Treu dat (sic) on the $VIX. Some people on here talking about how volatility is going to come back in a big way but it’s just not lining up with what’s happening with the $VIX. $VIX appears to have peaked at 45 earlier this month and is coming down fast. $VIX is well below the 50-dma and next stop appears to be the 200-dma at 23. Will likely be only a speed bump on the way back down to the low teens.
Lets have a TV party;
http://www.youtube.com/watch?v=XGyOEWGtmRk
OPEN has ripped my face off
Fly, is there any chance that Italian and Spanish yields are already so high because people have already started bailing on their bond holdings knowing that their CDS insurance is most likely worthless? Just trying to play devil’s advocate.
And a basic question that google can’t seem to answer: What causes a CDS to trigger? Can anything less than a 100% default on an obligation trigger them?
It’s similar to the “less idiot” or “greater fool” strategy. There’s always a greater fool buying it. In this case, only the fear of default has to increase for a greater fool to buy it.
Unless they behave as european style options when you can’t exchange them prior to the event or expiration date?
Fly,
I know you don’t need me to tell you this, but Bingo. It’s the CDS that everyone is really afraid of, and those can’t be stage-managed…
The world is just full of good news this morning. Libya interim(?) leaders say they will follow Sharia law in all things……..Wonder if that’s priced into crude….
http://news.yahoo.com/libya-declared-free-gadhafi-death-questioned-192557748.html
In other news, Merrill Lynch says the US will more than likely lose its AAA rating from another agency by new years.
http://finance.yahoo.com/news/US-rating-likely-to-be-rb-2758513190.html?x=0
the bear market never happened, it was all an illusion, the rest of the world being in trouble and the sky falling does not matter. Stocks do not care anymore, they only go straight up. Gravity does not exist, and europe is no longer a continent nor does it exist on the map.