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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (79447)	2/28/2007 11:57:11 AM
From: orkrious	Read Replies (1) \| Respond to of 110194

from Mish's site. trotsky [ PM ] February 27, 2007 04:54PM [hide msgs from this user] Registered: 28 days ago Posts: 63 i've seen something very unusual today - market-on-close bidding for index puts. i have a feeling this doesn't bode well for tomorrow. there must be a load of open derivatives positions that have suddenly turned sour. e.g. i noticed a big put seller getting active just before the plunge accelerated, apparently on a 'this is business as usual' assumption. maybe it is, but the odds chart-wise are that it isn't. also, this has the typical feel of a sudden turn in sentiment from totally complacent to full of fear - and the fear has not found full expression just yet. please note, market 'liquidity' is largely a psychological phenomenon. it is those sudden turns when liquidity evaporates the fastest. trotsky [ PM ] February 27, 2007 05:00PM [hide msgs from this user] Registered: 28 days ago Posts: 63 what the SARB seems to have done is simply shift some of its reserves. in order to do that with as little friction as possible, their method makes sense. i.e., they most likely sold the dollars to local commercial banks, and by buying gold directly from the Rand refinery, they avoided alerting the global market to their gold buying, which might otherwise have had the effect of raising the price right away (making it more expensive for them to buy).