Tuesday, April 14, 2009

Updated Basis Trade Thoughts

Early Zero Hedge readers are aware that I have often discussed the benefits of the basis trade in the context of an improvement in overall market liquidity, especially at the pronounced mid/late-January negative basis initiation. I would caution readers who have established this position to be very careful in the coming days with any established bases, and prudent readers may do well to trim exposure here, and take the 200bps average pick over the past 3 months. As DE Shaw had put it poetically "selling puts on market liquidity" via basis participation, given recent Zero Hedge disclosures, has very unappealing risk/return parameters. There is likely easier money to be made elsewhere. Sphere: Related Content
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Anonymous said...

Oh brother!

Hey I bought SDS on March 9th on the close @ 115!

OMG! Should I sell it here!!? What's going to happen in the future?

Anonymous said...

GoldmanSachs666 is a dis-info site put up by Goldman, to tell us all the obvious facts, that we already knew, thereby distracting us from the

real conspiracy of GS along with others to crash every market in the world. Why would they do this? Many reasons:

There is much more money to be made in volitle market. Especially to the down side, and if you are in on it. Money isn't lost in the market. It is

just moved across the table or the world. In addtion, the FEDeral Reserve Bank, decided the the CDS market had gotten way to big,

and it was time to bring in all the chips, I mean dollars back to the nearest Fed Bank.! GS wanted a shake-up of the banks, eliminate their compeption,

marginalize the rest, and get the FDIC to shut down the small ones and feed those deposits up the food chain. I am sure they made

trillions of dollars shorting the world in 08. Just where did they stash the money? Of course, they are going to declare

a measly loss for 08, but where did they stash the money? The trillions that GS and their clients made crashing the market in 08.

I am sure it will show up soon, but in the mean time here is why I think Goldman Sachs, along with others is the main conspirator.

In 2007, GS shorts the ABX(subprime) index and makes about a Billion dollars.

Yet, one year later Hank Paulson who is now US Treasary, tells Bush and Congress that "he didn't see it coming." (the real estate thing)

even though he was just CEO of GS one year prior to GS's bet against the subprime real estate market. PAulson was CEO at GS

for a long time and had 5-10 year vision. Paulson most certainly knew that subprime would tank way before he went to be a public

servant as Treasary. In fact, I bet that he knew, and the bailout plan was already in his pocket before he got to D.C. Any Joe with a brain knew

that subprime would blow-up, but we didn't know that Wall ST had been collaterizering it all these years. I think Goldman new that heavy shorts on

ABX subprime index could be enough to get the avalanch started. If not in the markets, then at least in the media, get the topic of subprime outthere.

Flash forward to July of 08, and a we see a hugh sell off in the commodities markets with the media blaming it on a slowing economy. It was really Goldman

Sachs, telling the Exchanges to rasie requirments for everybody, forcing many out of the market. Some even believe Goldman even cornered the oil market.

Goldman publicly announces OIL foracst of $200 but are shorting it at the same time. Principal/Agency principal mean nothing to Goldman!

GoldmanSachs former employee Cristopher Cox, headed the SEC for the last many years. Made sure that regulations were very lax, encouraged employees

not to follow cases, and would rasie the margin requirementts after the market was falling.

Hank Paulson took Lehman to a private room in the White House, and put his head on a platter. I'm pretty sure Hank new that this would rattle the markets.

Just as he wanted! And the perfect excuse in side pocket, "didn't have the legal authority to do." Now that I am a public servant and all. And if it wasn't enough,

he would have his contact at Moody's cut AIG's rating. His contact is Warren Buffet who owns 20% of Moody's. By cutting their rating, AIG was forced to

find Billions overnigth. A bit much, even for Wall ST. Not a chance!, Oh wait Here comes the government to save the day. Yes! Is that HanK Paulson over there

with a $700 billion plan? Hank, That plan looks worn out like its been in your back pocket a few years? It sort of is has says Hank. "You can barely read

the part "to big to fail." Enough with the jokes.

Hank knew that there would be this tug-a-war between the markets and DC while he pitched his plan. After the market had fallen to Goldman's likening,

it was time for Hank to really press urgently and threathen Congress to pass it. They do. The market rallies for 900.

Then you have Jim Crammer from Mad Money, after watching the market crash for 11 days in a row, tell the American Public to sell everytning. Did I mention

Crammer is a former Goldman partner. If the market rebounds this year, then you know he is "in" on the conspiracy.

It also would hold that Crammer is just a tool for Goldman to abuse the public, because he never makes any sense when he talks.

Since AIG slipped through the biggest loophole ever, not to be regulated by the CFTC and SEC because they are an insurance company, that loophole was

well known 5 years ago, which leads me to belileve that AIG was hank picked to be the fall guy at the inception of this conspiracy 5 years ago. It was their

mission, and with Goldman advising them, to get so big, as to be "to big to fail." Possibly Citigroup also. When you look at how large Citi got relative

Goldman, Morgan and others, 10 times as big, it makes it seem they are a fall guy. If the smarter guys(GS) at the table new way in advance about subprime, they

probably were force feeding it to the dumber guys(Citi) and others at the table. Rubin, former GS, sat on Citi's Board. Maybe as a Trojan Horse? Goldman has a

habit of looking at others books and then reneging on either a merger deal, like with Morgan or straigth up fucking you if you are in the he oil market.

The reason I feel that this was conspired 5 years ago is that is when subprime was invented.

It's highly possible that Freddie Mae and Freddie Mac were also made to be fall guys. What if they were influenced by the bankers to get as big as possible.

We all know Indy Mac, specialized in LIARS or Ninja Loans. Still investigating this lead. But check this out to all the quants..

What are the odds that the 2 most eventful (events) in our lifetime(s) happened on the 1st and Last years of the President's watch? (that would be 911 and the Credit Crsis).

If the 1st one didn't convince you the second one will.

Looks like Bush was made to be a fall guy too!

Brian said...

Wow, that was some awesome crazy. Thanks for that!

Anonymous said...

Did GS also placed the stain on the blue dress as a diversion to push through more deregulation?