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It's not a binary option. However, as a rule, I only buy/sell things that I am happy holding to maturity/settlement and whose fundamental value I have a view on, regardless of my view on what happens before we get there. According to your logic, everyone should have been happy to invest...

Yeah, but what does "Capital Management Arbitrage" actually mean? Are you running a fund of funds or smth? And what's WCTA? Western Canada Turfgrass Association? Washington Clean Technology Alliance? Winnebago Cooperative Telecom Association? Westmoreland County Transit Authority? I...

Indeed, but I, personally, am happy to stay out of this particular game and leave sov CDS to other people...

Right, so I have listened to the interview and, while there are some things that Bass said that I certainly agree with, there's not much detail and it's, obviously, him presenting his side of the story. So, in order to find more detail, I have gone and re-read one of his famous investor letters...

IIRC, isn't there a story that this is pretty much what Kyle Bass has done? Not for properties in Japan, but that's the idea...

Sov CDS is not worth owning even at 1bp per annum. Japan, with most of its bonds held domestically, is easily capable of engineering a "voluntary restructuring" w/o triggering sov CDS. In that case, the real cost of owning this contract is the PV of all the litigation expenses, rather than 1bp...

But surely you'd agree that in the world of finance you can construct arguments that appear sound that support diametrically opposing views? As to facilitating trades that perform well, it's unfortunately impossible to know a priori whether the argument will do that or not. Absolutely...

Yep, I am happy with either term really and I understand what you mean. [B] I think Monti does have a credible-sounding plan for growth. However, as always in these things, execution is the hard part. I think at the very least they deserve a chance to try to do whatever they're trying to...

I think you're wrong as well... I think our friend bwol is so far ahead of us in this finance space that we just can't comprehend the beautiful complexities of his various endeavors. "Proprietary capital management arbitrage" is the new cutting edge activity that will catapult bwol to the...

There are no options on the Eurex Euro-BTP contract at the moment.

What on Earth is "proprietary capital management arbitrage"? Did you just find 4 random vaguely financial terms and string them together in random order? "Risk management trading systems" sounds a little better, but not by a lot.

I think it's very difficult to make any assumptions about the relationship between Italian debt and the Euro. As to buying straddles, I don't know whether that's a good idea or a bad one, since it will depend on what vol's like. In general, EURUSD vol is pretty high, so your straddles probably...

Hahaha, you can't resist having a dig, can you? I don't mind really. Although, not sure what you mean by a "sober look". [B] I had a tantrum? I said I don't like people like Bass and I have explained why. In what alternative universe is that classified as a "tantrum"? I am not a fan of...

Oh no, here we go again...

Not a straw man. I am asking you to help me understand your objective criteria for calling someone "an investing giant" using an example, someone everyone is familiar with. From what you say above your definition appears purely subjective, i.e. an "investing giant and a great mind" is someone...

Could be... I am not sure about gold, but yeah, it's entirely possible that bonds of all sorts, including USTs and Bunds (although it's a lot less likely for Bunds), will lose their "risk-free" status. I think we're seeing a little bit of that already. After Lehman, JGBs rallied arnd 40bps in...

Absolutely and I agree 100%... My point isn't that it's not gonna happen, but that, for this trade to make sense, you'd better have worked out the specific timeline for when you expect this Japan blowup to happen. And that's the trickiest bit of this particular trade, really, which I haven't...

Come on, ralph, don't be absurd... And you know all this stuff how, pray tell? How do you know that your heros do all these "insane amounts of research"? Have you had a chance to ask them questions to poke holes in their reasoning and to gauge the true depth of their knowledge? Have you...

Well, I beg to differ... The whole point of everything they're doing is to create growth eventually. Specifically, if you look at the measures that Monti is actually proposing, they're only half about austerity. The other half is all about growth. Whether or not it's credible is your...

Because people on TV, in many cases, aren't much better than your grandma's banker. They always present their case, based on cherry-picked evidence. Furthermore, you can't challenge their views, so these people can get away with all sorts of shoddy reasoning and sometimes just outright...