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Maybe America became so great in spite of the Fed, maybe not... I have absolutely no factual basis upon which I can form a judgement about whether the Fed is good or bad for modern US society. A lot of people who are far far smarter than me have created a whole body of research that tries to...

No, time value works the same way for all options, regardless of what type of asset it is. What you're referring to is rolldown, aka slide (sometimes, not too accurately, IMHO, described as carry). Generally, I like to think of it this way. I start by assuming nothing whatsoever moves in...

It all started with the Bear funds in June 07. Then on the 9th of Aug 07, three BNP funds suspended redemptions. After that, arnd the end of August, it was the collapse of Coventree, the Canadian commercial paper conduit.

You made money and you're complaining? There's no pleasing young people these days :). It hasn't been pretty these past few days in the mkt...

Steepening everywhere... No matter what happens, front end is bid, belly of the curve has no friends. It's the pain trade du jour.

From what I can see, it's really just the theta that you've paid. You have benefited from the roll, but that's, unfortunately, fully offset by the erosion of time value that your option had at the time of purchase. Vol in these hadn't done much of anything, which is a little strange to me, but...

My view is also simple... Namely, insurance, as you have concluded, is overpriced, in fact, simply because people are structurally risk-averse. However, reinsurance, in spite of the aggregation/correlation aspect of it, is also overpriced. So you can't expect to make money by doing both legs...

Whatever, gents (I mean Anaconda and Lethn)... As I keep saying, there's no point in arguing with someone who is not willing to listen to what you're saying. I keep telling you something that is blindingly obvious, at least to me. In response you give me generalities that, clearly, make a lot...

It's not all above board and rosy... When did I ever say that? The only thing I keep saying is that it's silly to accuse the Fed of single-handedly causing all the world's ills. We're collectively to blame for the mess we got ourselves into. We all benefited, in one way or another, on...

Again, you're wrong. If you read the auditor's statement and Note 4, you will realize that. Firstly, the audits are conducted in accordance with the standards of the Public Company Accounting Oversight Board. Secondly, the differences between the guidelines provided by the FRB Board of...

Misthos, I see your point, but let me offer an alternative theory for your consideration, summarized by this chart (source US Census Bureau): Essentially, it's, predictably, too much money chasing too few productive assets.

I think it is you who hasn't understood. The audit that Deloitte (and before them PriceWaterhouse and Coopers & Lybrand) perform of the Federal Reserve Banks' financial statements is EXACTLY like the one that an accounting firm would perform when faced with a private organization's accounts...

All true, which is why I am going to try buying some cheap calls/call spreads. I'd be happy to write off the premium.

I am looking at buying some Aug10 FF upside...

I was not being disingenuous. I objected to the factually incorrect statement that the Fed bought 80% of the USTs issued by the US govt in 2009. Also, as I said, I am not completely disagreeing with Bill Gross. My only point is that, if anything, it's him that's being disingenuous by...

Right, this is not exactly specific, but I think you're looking for information on the Fed's balance sheet and the mkt interaction that FRBNY engages in on behalf of the FR system (OMOs etc). You also think that it's falls into one of the areas that currently are not accessible to the GAO...

Sorry, meant to respond to this a while ago... Define me a measure and we can talk about Pareto optimality.

Well, anything is possible, including my inability to understand. To help us both, why don't you be a wee bit more specific and tell me what areas you want to know about. Which particular aspects of the Federal Reserve operations do you want to know about?

Did you miss the part where I mentioned a private accounting firm performing an audit of the Fed's financial statements? Deloitte's signoff is on page 3 of the Fed's 2008 annual "report" that I have provided a link to in one of my earlier posts... Obviously, as we know, an auditor's...

Right, so I am happy that we have now established that the Fed has not secretly bought 80% of the debt issued by the US treasury. To further clear up the confusion that we seem to be having. As a result of the FOMC decisions: 1) The Fed bot $300bn US Treasuries (14.3% of the amt issued by...