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TZ, is it too much to ask you to please keep the discussion civil and not resort to insults? Everyone is entitled to have an opinion... Please...

Ivan and Misthos, IMHO and with all due respect, you're being woefully naive here (or I am being excessively cynical)... I just don't believe that any action by any politician has anything to do with the true wishes of the American people (assuming they could be formulated, that is). My view...

Well, it's not like GBP has a sterling reputation these days. :) At any rate, I used today as an opportunity to get into a couple of positive carry, "risk-on" trades (GBPJPY being one of them, with an added 'Japan fiscal disaster' bonus). Hedged with a wee bit of a DXY long.

Very possibly true, but how is a politically motivated Fed audit going to improve things, i.e. make the Bernanke Fed less, rather than more, political?

You, pedro, fall foul of survivorship bias here, methinks... Just what percentage of your 'cockney lad' sample that went in actually succeeded in the trading/investment mgmt arena? You should compare that to the same record demonstrated by PhDs/academics. And please let's not use good old...

And you're basing these grand pronouncements on precisely what, pray tell?

Well, it seems that people believe that yen is still very much a safe-haven currency. I don't think it's anything other than a bout of risk-aversion. BTW, I very much disagree and I went long GBPJPY at 147.

Well, you know USDJPY also depends on what happens in that other insignificant little ccy? Sometimes they call it the Japanese Yen, I hear. Seriously, the weight of JPY in the dollar basket (DXY) is only arnd 15%. Why would you expect such a strong degree of co-movement, given the weight?

Just for the record, I am 100% with Daal on this...

Well, we'll have to disagree on this then, rather than continue this discussion ad infinitum.

But, pedro, this just tells me that you don't appreciate how scientific method works... The fact that a particular theory has been shown to not work in certain settings doesn't mean that it has no merit. It certainly doesn't mean that its authors don't deserve their accolades. Or do you...

Negative household wealth/balance sheet effects and the adverse feedback loop resulting from the 'financial accelerator'...

No and it can be illustrated by a simple counterexample. In a mkt that's slowly trending down, for instance, the strategy you describe cannot be insured by buying OTM puts. That's just due to the way options work...

Kaletsky is occasionally worth listening to... However, this article of his is one of those cases where, in my view, he is talking bullsh1t.

Indeedy... However, the OP wanted a 'put option that has the highest delta'. I aimz to pleeze. As to the stimulus, it's a well-advertised fact that a large chunk of the current stimulus is to be disbursed to various recipients (mostly local govts) throughout next year.

Options are a different kettle of fish entirely... There's absolutely no reason to believe that par calls can't be worth a few ticks. That has happened before in both Eurodollars and Euroyen (in 2001, if memory serves).

Can I just ask the OP one question (and note that I don't mean to offend)? You address your post to 'Newbies', implying you're not one of them. Given that you have been trading for less than 2 years, what would you call yourself?

Negative LIBOR has happened before, in Switzerland and Japan. Moreover, with a negative CB depo rates, anything is possible. Finally, don't confuse LIBOR with the actual rates at which the banks fund themselves. In answer to the original question, no, I wouldn't buy 'em.

Haha, you damn me with faint praise, amico...

Rightie, so you're making a few distinct points here... Please correct me if my summary below is wrong. Firstly, we seem to be agreeing that quants, whatever their other faults might be, are NOT to blame for the calamities that mkts periodically experience. Ultimately it's only the people...