THE END GAME 2012/13 - Ex Goldman Star - Trading Will Be Banned

zedDoubleNaught · Jun 1, 2012

I don't think they need "printing presses" anymore, they're not going to hand out cash. With debit cards and phone-to-phone electronic transfers et al, all they need to do is add a 0 or 00 to all accounts. Or a software patch quickly updates all accounts to the new currency, no need to try collecting all the old currency notes.

I hope they call the new currency "credits", that's what they used in Star Wars.

plyka · Jun 2, 2012

Quote from clightmarathon:

Wasn't LTCM an arbitrage operation?
Or were they doing different type arbitrage?

I actually read a book on LTCM but i've almost forgotten all of it by now, lol. I don't believe they were in arbitrage, from memory they had a number of different strategies, some of them extremely complex. They were overly levereged, things turned for the worse, and there they went.

In pure arbitrage, there can only be counter-party risk. Unless a clearing house goes bankrupt, i'm not sure how they can lose. As an example, let's say that the SPX futures for whatever reason are trading at a slightly more expensive price than the actual stocks in the index. This can happen for whatever reason, and usually only for a very short amount of time (due to arbitrage). Someone shorts the futures and buys the stocks/index in proportion. If we assume that we have factored out other things like interest/dividends/carry/whatever when they make the trade and there was a descrepancy, then they have already locked in their profits. It's similar to buying the ES and then selling the ES, there is no more risk to you, you are flat. If you buy and then sell the ES, this doesn't add to the total notional value of derivatives because we'll assume that the open interest in the ES first increased by 1 and then fell by 1. However, if you buy the ES and sell the actual stocks/index, this adds to the total notional value despite their being no real difference.

sculptor66 · Jun 2, 2012

Quote from THE-BEAKER:

Bonds will be stuck at 1% in the US, Germany, UK and Japan (for this phase).
The whole bond market will be dead.
Short selling on bonds â banned
Short selling stocks â banned
CDS â banned
Short futures â banned
Put options â banned

All that is left is the Dollar and Gold

So they ban shorting of futures but longs are still allowed? Yeah, right...

It's those little details that make you wonder how well all those 'experts' know their stuff...

RCG Trader · Jun 2, 2012

Quote from shopster:

1. Debts can be repudiated or settled for fractions, lessening the impact.

2. Fiat currency, one of the greatest and most successful inventions of mankind. It has allowed undreamed of growth and prosperity for billions.

Fiat currencies require a reset every now and then, this is one of those times.

Since Fiat currencies are notional (or paper) the reset can be quickly accomplished.

Start the presses on the new Dollar.

3. 100% of the countries on earth use Fiat currencies, and will continue to do so.

4. Economic disaster does not equate to social breakdown. Countries can withstand 25% unemployment.

So we are in for a period of dislocation, turmoil, false prophets, winners and losers will surface, then dawn comes for the next day.

in the meantime , strap in and wear a helmet.

damn, i luv forex..........

s

+50

Swan Noir · Jun 2, 2012

There are so few "real" arbs that do not include being in a position to capture spread the term has become almost meaningless. What most arbs accomplish is to put the equation so heavily in your favor the likelihood of making money is astronomical but the chance of loss, under certain circumstances, still exists.

Quote from plyka:

I actually read a book on LTCM but i've almost forgotten all of it by now, lol. I don't believe they were in arbitrage, from memory they had a number of different strategies, some of them extremely complex. They were overly levereged, things turned for the worse, and there they went.

In pure arbitrage, there can only be counter-party risk. Unless a clearing house goes bankrupt, i'm not sure how they can lose. As an example, let's say that the SPX futures for whatever reason are trading at a slightly more expensive price than the actual stocks in the index. This can happen for whatever reason, and usually only for a very short amount of time (due to arbitrage). Someone shorts the futures and buys the stocks/index in proportion. If we assume that we have factored out other things like interest/dividends/carry/whatever when they make the trade and there was a descrepancy, then they have already locked in their profits. It's similar to buying the ES and then selling the ES, there is no more risk to you, you are flat. If you buy and then sell the ES, this doesn't add to the total notional value of derivatives because we'll assume that the open interest in the ES first increased by 1 and then fell by 1. However, if you buy the ES and sell the actual stocks/index, this adds to the total notional value despite their being no real difference.

trefoil · Jun 2, 2012

Must be close to a bottom when you see lunacy like this being quoted. Climax of it all is gonna have to be after the Greeks vote on the 17th, after that everyone in Europe is gonna have to decide to either sh*t or get off the pot, finally.
Then everyone hits the beaches, new bull in the fall.

budcampbell · Jun 2, 2012

Watch the 200 day. Everything else is noise.

atrocious · Jun 2, 2012

Quote from sculptor66:

So they ban shorting of futures but longs are still allowed? Yeah, right...

It's those little details that make you wonder how well all those 'experts' know their stuff...

Yeah as soon as I read "ban short futures" I dismissed this guy as a lunatic, although apparently he has some cred on the street.

Whatever the case it's stupid to obsess over armageddon bets that will never get paid if they come to fruition. If we get to the point where the NY Fed is burning with mobs surrounding it, you can wipe your ass with your long treasuries at 1% or 500 SPX puts.

That's not to say armageddon isn't coming, but if this guy is implying you can find some magic asset to hide in a rathole while the world burns, good luck.

oldtime · Jun 2, 2012

Quote from atrocious:

Yeah as soon as I read "ban short futures" I dismissed this guy as a lunatic, although apparently he has some cred on the street.

Whatever the case it's stupid to obsess over armageddon bets that will never get paid if they come to fruition. If we get to the point where the NY Fed is burning with mobs surrounding it, you can wipe your ass with your long treasuries at 1% or 500 SPX puts.

That's not to say armageddon isn't coming, but if this guy is implying you can find some magic asset to hide in a rathole while the world burns, good luck. [/QUOTEyeah,I think that's what he implying. He wants you to go long gold. As far as armegeddon goes, how bout .38 caliber gold nuggets? At least then you could use them for something.

murray t turtle · Jun 4, 2012

Quote from budcampbell:

Watch the 200 day. Everything else is noise.

================
Good points, a 50 day ma can chop & slop & stop an investor out

I still like it, not that it takes the place of a 200day or 10 yr.

Also while GLD, gold is uptrending nicely;
a ban on short futures or puts seems very,very un likely .But with the war on terror, long oil/gasoline specs could & should be banned.Shorting or short covering sounds fine...

So the GS star coukld be partly right-long oil/gasoline spec-trading should be banned, not just in an election year.