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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: GROUND ZERO™ who wrote (77758)	11/24/2007 8:04:31 AM
From: Real Man	Read Replies (1) \| Respond to of 94695

Yep. And everything is tied together in ways unimaginable.

To: GROUND ZERO™ who wrote (77758)	11/25/2007 6:00:05 AM
From: Real Man	Read Replies (1) \| Respond to of 94695

That firecracker is a hydrogen bomb, a fusion bomb that has a small fission (plutonium) bomb inside that ignites it. If you think about financial derivatives, then the situation is that not so small ($30 Trillion?) part of the bomb, the credit derivatives, has just detonated, and the fire squad is on the scene trying to put out the fire. -g- They might be able to do that, as, surprisingly, the big bomb is very resilient to small fires by design. However, every small detonation leads to a big pile-up of fusion material -ggg- This is not a small fire. Stocks are a relatively tiny part of the bomb, but a very critical part. In some sense stocks ($9 trillion derivative market) are the fission bomb - if they detonate, the whole thing blows by design. That is, because asset prices are critical to credit availability. Since it is so small and so critical, the protection team gets there first -ggg- Moreover, by tuning this little fission bomb (asset prices), the fire squad was able to stop the fire in the past. -g-

To: GROUND ZERO™ who wrote (77758)	11/25/2007 6:22:48 AM
From: Real Man	Read Replies (2) \| Respond to of 94695

Now, another peculiar feature of the derivative bomb is that most of it sits off the exchanges, and traded over the counter. Since they stopped the trading last week, now everyone can mark up the values of their portfolios to a model, which means everything will be fine, as long as they don't re-open trading on November, 26 as promised, but keep that troubled market shut down until year end. We'll have a Santa rally then -g- Don't ask, don't tell. If a contract trades between 2 parties, both parties are interested in keeping their mouth shut. However, the latest fight has not been victorious for the PPT, as various parts of the credit derivatives market keep detonating. The big bomb grew to be very large, and it's now reaching the critical mass at which the whole big bomb detonates in uncontrollable fashion. -g- In other words, this market is very resilient to small fires, but the risk of a huge fire is actually growing exponentially with the size of the bomb. The huge fire is a total systemic meltdown, and the Fed will viciously fight that until the big bomb reaches a critical mass and blows up the Fed.