Rumours aside, something big is about to happen

[MikeWB]

Rumours aside, something big is about to happen

http://bretthenebery.wordpress.com/2010/10/04/rumours-aside-something-big-is-about-to-happen/

Buckle up.
As I type this, a flurry of activity is taking place within security and financial circles around the world. Normally, this would signify just another busy day in the hard-working quarters of modern defence and finance, however this time there is good reason to suspect that the world may be about to witness something historic.
If not something violent, then certainly something spectacular.
I’m not going to waste time on a long, detailed post. Instead, I’m going to present the data, the facts and the patterns. Then I’m going to make you make up your own mind.
First are the financial movements that preceded the security movements, starting with the CNN Money reporton October 1st, which shows an unusual .15 yield on treasury bonds. Basically, investors are betting big time on ‘you know what’ hitting the fan shortly.
Digging a little deeper we begin to see  something interesting emerge. As of closing (again, October 1) on Friday, we see some unusually high option volume reported in Schaeffer’s Investment Research supporting this trend.
The S&P traders seemed to be on the bandwagon too. This video showing massive put optionson the S&P for October speaks for itself.
It was only today that it became clear to many that the world economy is actually decoupling from the U.S, fleeing the sinking ship while it still can. In that industry, you look out for yourself.
To top it off, the other global capital of modern finance, London, has even <em>worse</em> news. According to an economic think-tank and Sky News, the UK is on the cusp of a second banking failure.  
Now whether all of these events are pointing towards the same thing or not, the theme of something big happening soon is replete throughout the media lately. We should not be scared, nor should we panic. We must take a step back and look carefully at what is going on so that we can assess what, and where, the real danger actually is.
With the unusual activity happening in one place, we could be mistaken for missing the events unfolding in another.
That other place is Western Europe.
This week, the United States and Britain issued a strong travel warning to European-bound tourists. Without offering specifics, they said the threat was &#8220;high&#8221; and &#8220;imminent&#8221;, raising more questions than it answered. Yes, this happens from time to time and in most cases nothing comes of it.
That&#8217;s why whenJapan issued an extremely rare travel warningto its citizens, this developing story suddenly became a lot more interesting to me. An official at the foreign ministry in Tokyo said that the warning &#8220;was not prompted by any specific intelligence but by the previous British and American alerts.&#8221;
Make of it what you will, but the key phrase here is &#8220;unusually rare travel warning&#8221;.
So, in summary, we&#8217;ve got massive bets on a bumpy ride ahead by prominent investors on the back of warnings concerning imminent terrorist attacks in Europe. 
Surely one can&#8217;t be blamed if his ears prick up. We will hear of wars and rumours of war (or stock market crashes, terrorist attacks, etc, etc)
But rumours aside, something <strong>big</strong> is about to happen.

[Helphand]

Yahoo Finance just now: "FTSE hits five-month closing high, led by banks".

Was it around the same time in 2007 that there were reported massive put option positions being taken against the S&P/other US Indeces? Nothing immediately came of that but also the unauthorised flights/(missing?) nukes thing didn't develop (wasn't that about the same time? Have not checked, very dim recollection). Market low came in March 2009.

Gold up despite the FTSE rise. Given small size, generally recognised as easy to manipulate gold market.

Hard to know what to expect any more...

[Panoptimist]

November.

[CrackSmokeRepublican]

zioDenniger is talking about "Fuses" ....?





http://market-ticker.org/akcs-www?post=168279

Posted 2010-10-05 13:36
by Karl Denninger
in Musings

Is The Fuse Going Inside The Box?
 

It's not over for LPS folks.....

This is totally-unappreciated in the broader market today, of course.

Just as these detonations were in the broader market in early 2007.  Remember?

This is NOT a single-company story, although it sure looks like it on a day when the Dow is up 178 points.

Volume in this issue is now eight hundred percent normal, and the stock is down more than 10%.

The pile-on continues; as I noted last night, the problem I detected in a possible "good play on a recovery in price" is that someone put on $650,000 worth of PUTs two hours before the first collapse, implying strongly that they knew something.

The press release did nothing to dissuade people from pressing that bet - instead they doubled their efforts into it.

The pressing of bets has now turned into a bet on the firm's collapse.

Please be aware of this folks - this firm's technology and activities are a part of most of the servicers in the country - that is, the major banks.  If there is actually something here that results in the firm's collapse the impact will be extraordinarily severe and it will not be contained to them.

Remember the beginning of the "subprime" thing when it was "contained" and just "a couple of companies" like New Century?  It wasn't - all of the tentacles of that mess were intertwined with all the major banks, and as it unwound they were all mortally wounded - saved only with legalized accounting fraud in early 2009.

Again I ask and you need to consider this very carefully:

    What if "mark to model" is now coming unwound, as in point of fact the base-level secutizations have "problems" that are basically uncorrectable, this was intentionally hidden in the belief values would recover, the recovery did not happen, and now the cover-up is starting to wear thin around the edges and become exposed?

If that premise is correct then this is not only not contained it in fact can't be contained.

I smell smoke.

[Ognir]

Silver at a 30 year high and was up 5% yesterday alone :up: