3 Black Swans

Quote from Cutten:

These are off the radar for most of Wall Street, but I think they are more likely than people expect:

1) Oil approaching $200. It might not hit it, but I think there's a higher than expected chance it gets to $180-200.

2) S&P collapsing to 1000 or close to it, as the economy performs even worse than expected.

3) A major blue-chip financial going bankrupt.

These might not happen, but I would say they're worth a punt, because the payoff will be huge if they happen and they aren't as unlikely as the market is currently pricing in.
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the 5th largest investment bank in the US bear stearns has already gone bankrupt.other blue chip financial firms are expected to go bankrupt.

your 3 listings do not come even close to being black swan events . the fact that an event may happen that does not meet the consensus of the majority does not in itself constitute a black swan event.
this is the definition of black swan event:"a black swan is a large-impact, hard-to-predict, and rare event beyond the realm of normal expectations."
 
On a side note, talked to a realtor hear in Vegas that has worked this market for well over 20 years....they said EVERY deal they have closed in over the last 9 months have ALL been foreclosures. :eek: :eek: :eek:

All I can say is WOW!
 
Is there a reason why the US gov't along with other major gov't can't jump in and absorb the debt and losses? Yes, anther bailout, but this good for nothing fed chair is useless.
 
Quote from Comptalk:

Is there a reason why the US gov't along with other major gov't can't jump in and absorb the debt and losses? Yes, anther bailout, but this good for nothing fed chair is useless.
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Yes....for the same reason casinos do not reimburse losers.:)
 
Quote from zdreg:

the 5th largest investment bank in the US bear stearns has already gone bankrupt.other blue chip financial firms are expected to go bankrupt.

your 3 listings do not come even close to being black swan events . the fact that an event may happen that does not meet the consensus of the majority does not in itself constitute a black swan event.
this is the definition of black swan event:"a black swan is a large-impact, hard-to-predict, and rare event beyond the realm of normal expectations."
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If they aren't even close to being black swans, why are the premiums for CL $200 calls not huge, why are S&P 1000 puts selling so cheap, and why are C and LEH not in single digits?

Are you trying to claim that S&P 1000, oil $200, and Citigroup/Lehman or someone similar going broke are small impact, easy to predict, common events that are expected by most normal market participants?

That would imply that if you bet on them and they happen, you won't make much money. Is that what you think? S&P hits 1000 by late October and shorting or buying loads of Dec OTM puts would not make much? Ditto with oil $200?
 
Quote from zdreg:

the fact that an event may happen that does not meet the consensus of the majority does not in itself constitute a black swan event.
this is the definition of black swan event:"a black swan is a large-impact, hard-to-predict, and rare event beyond the realm of normal expectations."
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I tend to agree, basically.
 
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