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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (20486)	5/22/2009 7:52:45 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 71462

It is important to filter signals from noise, once more. Here, singnal come from the option spreads (though options can stay priced imperfectly for some time. It is not necessary that the stock price gives on although I am sure it will at a certain point. More important will be the softening of the curve pricing which comes once the market has more clarity about the terminal value. One sign could be that the calls begin to build time value again. To be sure, I checked the conditions of stock futures (in options things are pretty clear) and there is nothing special about corporate events but the usual adjustment rules. But as the tide goes on and depending on the balance sheet the position (short calls and buy futures or sell put spreads, could become a really big one). a bit over 2, a large block of GM stock lurks. I wonder whether this got eaten or is left untouched. All told it is a great arb but in some cases the balance sheets decide. We already know that the obama administration allows for lots of leeway and unclear timelines, as seen in chrysler and the first lapse of the GM ultimatum. This is what makes the situation dangerous even if the economic endresult is practically cast in stone. On another note, currency markets are simply ignoring the Moody announcement not to change the outlook for U.S. debt, which is perhaps result of a gag order. So far, the USX did not reverse on this, >>>>>>>>>>>> USD rating remains stable, new trend for greenback Thu, May 21 2009, 23:18 GMT fxstreet.com FXstreet.com (Buenos Aires) - The U.S. credit ranking remains at AAA Moody’s Investor Service spokesman said Today. Fears of a probable downgrade triggered a selloff of U.S. assets starting early in the American session, with Wall Street and S&P closing to the downside, and dollar falling to record lows against major rivals. Despite that, dollar is unable to recoup ground, and at current levels, dollar is set to begin a longer term falling trend. <<<<<<<<<<<<<<< Edit: I have received word that some institutional players (a.k.a hedge funds) have gained limited access to GM stock for borrowing; borrowing rates are at 25% to 30% (to the tune of 10 to 15MM shares). It depends on the price when they will sell but in any case they need volume! So, a bit of drumming up may be in order ggg.

To: Real Man who wrote (20486)	6/2/2009 6:15:29 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 71462

Government Motors has a nice shiny ticker now - (OTC)GMGMQ Btw, the arb worked its magic here. After that I hold only GM futures valued at 25c or so. The calls which I sold with an average of 75c or better, yes -I covered them at the open, at 6c. So I bought GM $1 puts for about 70c and shorted the calls as they recovered, to round out the stuff. That gave me some value of 45c which I could not realise by selling the futures into the market. I wish GM stock would become borrowable, just once. I would sell on the spot. On another note they just refuelled the Dollar trade. US dollar tried to recover (a little) so the EUR reached its yesterdays low, but that was soon met with new dollar selling. I guess, thats a good setup for the coming gapsky, like EUR running wild to 1.44