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It's the result of the 6 day FTO, which together with the LTRO result from yesterday, filled people with optimism about the EUR banking system...

OTC, most definitely. NB, vol, at least in EURCHF, has gone a bit bananas recently... Not that it's that much of a shocker.

Have you seen the CAD GDP number today?

No, I reserve this label for things I understand very very well... Means I can see through the bullsh1t spewed occasionally by clueless people with relative ease.

Are you kidding? There's all sorts of people accusing the fed of blowing up another asset bubble etc etc... Hoenig represents a view of a particular constituency.

Only reason would be that it would be a matter of political necessity/expediency. Haha, that's a good description of the sort of thing I normally end up doing...

Daal, I don't have an issue with Hussman... I just don't really read anything by him. Furthermore, I don't see the value of a model that's based on mkt prices of US treasuries, as it feels like circular reasoning to me. I definitely have an issue with Rosie, who has been saying the same thing...

Er, no... Or, rather, I should say that I disagree with this overly trivial analysis.

Awwww, come on, GoC, this is a poor argument... What percentage of the world's output were the Asian tigers at the end of the 90s? In contrast, what percentage of the world's output do the major Western economies that are at risk today represent? The whole point about creative destruction...

There was never any dollar funding crisis... It was a completely bogus story to begin with.

Whoa, this is getting exciting indeed... Emanuel Derman is a "he" and, for some additional spice, he used to work for the Vampire Squid.

I will repeat my favorite saying... US is still the best-looking horse at the glue factory

Why? Japan has been and still is running a reasonably large trade surplus. IMHO, US, in a fundamental sense and based on numbers alone, should be much more of a concern to you. [B] As soon as I start classifying a participant of any mkt I trade as a manipulator, I go on holiday. I just...

I sense a bit of a contradiction here. You know what will happen and that's why you've made out like a bandit on your gold and silver. Well done! Seems like timelines don't matter to a savvy investor like yourself. So why not go short JGBs today? Or go short JPY (on a trade-weighted basis...

See my response here: http://www.elitetrader.com/vb/showthread.php?s=&postid=2868620&highlight=Japan#post2868620 Moreover, the debt as 200% of GDP is a very misleading figure, as it's 200% gross. If you take into account the various holdings of bonds by branches of the Japanese govt, the...

As I have remarked many times on Japan, this is a rather common "received wisdom". On what metric is Japan "getting close"? What do you make of the fact that people have been warning of Japan "getting close" for about 20 odd years now?

While I sorta disagree with Krugman, there's really very little logic in your statements above. Japan and Zimbabwe are two outcomes that are about as diametrically opposed as they could be. So how exactly do you argue that Krugman's advice leads to both conditions?

If you do the FF flattener (rates, I mean), you will have very little downside, but the real downside on these trades is the roll, as you have correctly pointed out.

To be honest, I am not sure I want to participate in this strange endeavor, MaW. I am really confused about the exact purpose of the discussion. As far as I can see, tj is, basically, demonstrating to us the marvelous power and self-consistency of BSM. Or should I say the power of Louis...

Because you have not specified any assumptions... For example, if in this hypothetical market of yours all assets are worth either 0 or 42, I have a great method of pricing options on these assets. The beauty of BSM is that it's well-specified and internally consistent.