 | Late last week – Thursday – I complained of the amazing lack of volatility despite the best start of the market since 1987. The sickening complacency lasted through Friday’s trade: it was WORSE than Thursday. The latest excuse for this putrid action is that another decision/bailout for Greece is on the table and therefore the market is waiting for the outcome. More specifically, a decision on another forced write-down of Greek debt is being rammed down the throats of bondholders…without allowing the process to be called a default. The so-called haircut (read: default) may come to 75% by this weekend. In this centrally planned global economy, however, a 75% forced default is not a default because that would trigger CDS (insurance) payouts to the bondholders who were smart enough to purchase said insurance when buying the Greek bonds. Who were the folks that were dumb enough to write the insurance for the Greek debt? That would be bankers, of course, looking for free money. And it may be free indeed, as the central planners want to let the banking mafia keep all of the (CDS) insurance premiums because they refuse to call the current scam a default. The group that makes these decisions is the ISDA – the International Swaps & Derivatives Association. In my opinion these jokers have been bought-and-paid-for by the central banksters due to the aforementioned refusal to call the Greek saga a default. Funny thing though, the ISDA did not have a problem immediately calling out Kodak. From the ISDA press release:NEW YORK, January 19, 2012 – The International Swaps and Derivatives Association, Inc. (ISDA) today announced that its Americas Credit Derivatives Determinations Committee resolved that a Bankruptcy Credit Event occurred in respect of Eastman Kodak Company. The Committee determined that an auction will be held in respect of outstanding CDS transactions. ISDA will publish further information regarding the auction on its website,www.isda.org/credit, in due course. Too bad for the writers of Kodak CDS instruments; isn’t it? That is to say – it’s too bad that Kodak isn’t a bank; otherwise those that sold the CDSs wouldn’t have to pay out. No worries though, if the Greek saga actually unraveled and was declared in default on its bonds, which would cause problems for the banking mafia – the Fed will save the day with in the announcement of QE3. That’s how they rig the game in this centrally planned market.
Trade well and follow the trend, not the so-called “experts.”
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters.
larrylevin@tradingadvantage.com
Trading Advantage
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Trading Signals from the Electronic (ES) mini-SP 500
- No “Secrets” signals today.
- Algorithm positions (2)
- “Reading the Tape” positions (3) …combined Secret’s, Algo, & “Reading the Tape” total… -0.75
Click Here to see the results of our signals | ES 1309.50 / 1306.50
POC... 1308.00
YM 12643 / 12600
NQ 2432.75 / 2427.25
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