Was this the biggest insider trade ever ?

T

trillenium

I have the impression that some of the big hedge funds and banks (that also pay S&P for ratings) knew about this downgrade at least since monday aug 1st. That selloff after august 1st. came after the US increased the debt level. It more or less came as a sudden surprise.

I almost think some big banks knew about the downgrade and went short like mad. Today they know margin calls come in and they cover their shorts. Really feels that way. Any opinions ?
 
if they had had insider information, would'nt
they have traded credit default swaps instead ?

I also remember the police raid against S+P
in Milan,August 4,
suspecting them of irregularities.
This was after they downgraded Italy,

http://www.guardian.co.uk/world/2011/aug/04/police-raid-milan-moodys-standard-poors


so, there was a series of negative ratings worldwide,
maybe all due last week according to S+P schedule.
The order in which they were published was maybe
even chosen so to reduce panic, the biggest fish at last.
 
But even several hours after the market close, official notice had yet to materialize


Standard & Poor's told the U.S. government early Friday afternoon that it was preparing to downgrade the U.S.'s triple-A credit rating but U.S. officials notified S&P that it had made a $2 trillion mathematical error.

The error was in the calculation of the U.S. debt-to-GDP ratio over time and was based on a misreading of what the correct congressional baseline was

On July 14, S&P put the government on a credit watch with negative implications, meaning there was at least a one in two chance the U.S.’s long-term debt would be downgraded within 90 days.
 
It seems to me most well connected knew about this, dumped before Friday, let some panic set in and rebought it Tuesday.

Perhaps shorts too, cover and reverse but I don't want to be too sick to my stomach.

FoN
 
I took it in this mindset. Pretend I work for the S&P. Assume I knew they were going to downgrade the US and had a position (my friends had a position or whoever). The government realizes there is a 2 trillion dollar error in my calculations and now i'm in trouble (i could lose my ass on this "risk free" bet i made). Instead of taking the needed time to figure out if the US truly deserves a downgrade or ****I screwed up somewhere else*** I say that the decision stands. That's a HUGE red flag that i've got money on the line and i'm not interested in quadruple checking my work. My interest is protecting the bet i've made on insider info.

Regardless the fact they made that error and came back 1hr later SCREAMS they had positions on.
 
Quote from athlonmank8:

I took it in this mindset. Pretend I work for the S&P. Assume I knew they were going to downgrade the US and had a position (my friends had a position or whoever). The government realizes there is a 2 trillion dollar error in my calculations and now i'm in trouble (i could lose my ass on this "risk free" bet i made). Instead of taking the needed time to figure out if the US truly deserves a downgrade or ****I screwed up somewhere else*** I say that the decision stands. That's a HUGE red flag that i've got money on the line and i'm not interested in quadruple checking my work. My interest is protecting the bet i've made on insider info.

Regardless the fact they made that error and came back 1hr later SCREAMS they had positions on.
More...

Smart thinking.

FoN
 
Quote from trillenium:

I have the impression that some of the big hedge funds and banks (that also pay S&P for ratings) knew about this downgrade at least since monday aug 1st. That selloff after august 1st. came after the US increased the debt level. It more or less came as a sudden surprise.

I almost think some big banks knew about the downgrade and went short like mad. Today they know margin calls come in and they cover their shorts. Really feels that way. Any opinions ?
More...


DING! DING! DING! DING! DING! DING!

You are probably right.

read this

http://www.elitetrader.com/vb/showthread.php?s=&postid=3265670#post3265670
 
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