Sunday, August 26, 2007

A September Surprise? OK, maybe not that much of a surprise

A couple of things have come up which mean that I won’t be making any posts for a week or two. However, my regular reader will be pleased to know that I will be leaving the blobfish on guard duty

One of those ‘things’ that came up had me seeing someone off from Heathrow airport earlier today. I haven’t been there for a few months and concrete crash barriers and other obstacles seem to be sprouting up all over the place like mushrooms; presumably a process that has been accelerated by the recent chilling (?) attack on Glasgow airport

The new look Heathrow Terminal 3

There’s a certain, um, Maginot Line quality about Heathrow these days and keen students of history will doubtlessly remember how stunningly effective that was in protecting the people who built it from their attackers…


Unfortunately, I won’t have enough time to get my head around a story and a couple of links posted by
anon under an earlier post but it might be one worth keeping an eye on...

There’s a distinct possibility that someone with a lot of money is betting very heavily that the US stock market will crash in September

I don’t propose to give a lesson in financial options trading here – it’s way too complex and it's not an area I claim to be proficient in but there seems to be some unusual activity going on with ‘SPDR’ options. SPDRs being an exchange traded fund directly linked to the value of 500 of the top US companies

The peculiar thing being the large volume of options being traded and their low exercise prices – in the range $60 to $95 – when SPDRs are currently valued at $146

So, taking the $60 options as an example (and keeping it simplistic), someone is writing options to buy $146 stocks for $60 and charging $86 ($146-$60) for each option.

Now the whole point about options is that they normally only make sense if there’s a chance the person you sell them to won’t exercise them – that way you pocket the money you sold the option for. However, the options in question are priced so low in comparison to the current market price it is virtually certain that anyone buying them will exercise them before they expire in September.

Unless, he can buy the same stock on the open market for less than $60

There are several possible reasons why someone might be writing so many low exercise price options...
  • it could be an indirect way to unload a large holding of SPDRs in one go without driving their price down by selling them directly on the market
  • it could be a particularly desperate ruse to raise a short term, risky and expensive loan
  • someone is extremely confident the US stock market is going to drop by 30%+ in the next month

It’s difficult to put net values on all this but the numbers involved are certainly much larger than the anomalous trades on airline stocks immediately before 9/11

There is already some talk that whoever is placing the bet may have advance knowledge of some ghastly terrorist incident that will panic the markets. However, as someone else commented underneath one of my posts...

You don't need to be much of a financial analyst to predict a market crisis in September. Every summer market shock in history has directly lead to a crisis in Sept/Oct because ... the big hitters get back from holiday.

This time around its as good as a dead cert. Just you have to get the day right to make a killing and it wouldn't surprise me if someone tries to tip the market over the precipice on purpose; it won't take much.

(see also: Mystery Trader bets markets will crash by a third)


Anyway, time to put the Blobfish on guard duty. Barring the complete economic and social collapse of Western Civilisation I’ll be standing him back down in a week or so.

Or maybe I should use a seagull instead...



Rory Winter said...

Write out 1000 times, "The State is the Enemy of the People," read and inwardly digest.

Their Maginot lines are living proof of this. All cosmetic of course but here's a thought: by turning our environment to look like military fortresses and camps the State is actually acclimitazing us all to accept this as the natural environment.

Good brainwashing technique, eh?

The State is the enemy of the people, keep repeating.

lwtc247 said...

Well said Roy. With aware people like your good self, hopefully the state will eventually fall. God knows I pine for that day.

brendadada said...

Haha, blobfish or seagull? We might has well have either of them in charge of the system: I dread to think what's coming next.

Stef, where the devil have you gone? Mr Power was asking me about you the other day. Drop me a line if you're lurking nearby somewhere, or when you get back.

SteveW said...

nah-the gulls cry"OMO"-and they'll steal your pacittos lemon top given half the chance,but apart from the power of flight,they got squat.(barefoot in the head-brian aldiss)
its those atlantic wolffish we need to impede.I'm tellin yer-that lowly operative workerfish was given shit for breaking rank and standing up on his haunches.
I've told everyone within earshot to be with the ones they love the most on October 13th.quabballah portents and all that crap-whatever-I got the local bookies to lay me a bet on a significant event on that day-I'm either mildly rich or a fukkin terrorist.

SteveW said...

i think its funny how people shit their trousers when their quaint ideas of resistance get swamped by unforseen circumstances.
Antag mate.I really hope you aren't censoring your YouTube Channel.Its worries like this that turns legit skeptics into raving conspiraloons.
"Hardworking cops" has got to be the funniest bullshit i ever spat my coffee out at.theres no such thing.they are all chavs in matter how swollen their eye is,they lie.they cheat.they steal.I'm just waiting for the perfect reason to punch my brother in law.a fat fuggin pig has been impregnating my sister for the past 20 years.he knows as well as me we are just waiting for him to slip up.he sweats like the proverbial when he sees me.hes a fukkin pig and he knows it.If you are a copper,youre a class traitor.hope and prey your tazer doesnt run out of duracel fukkin pig twat.
All Coppers Are Bastards -ACAB/dot dot dot dot on the knuckles of those who shiver when a black moria whines into view.
and im sorry.wont buy the funny seagull story.they are rats with bigger wings brains and teeth.If I had transport,that little twat would be dead.stuffed.with a big sniper rifle photo of me wiping seagull blood off my riot cop boot.send your 4 yr old daughter in there to "steal food".see how many scots laugh and bless the lil tyke.