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Question: How Many Derivatives Gamblers Have Been Destroyed… Spock – Bears Chat

…as interest rates have skyrocketed over the past few weeks?

Answer: probably all of them.

For, as shown here:…df/r_qs1306.pdf

… (page 10, table 4,Interest Rate Derivatives)  there are approximately…are you ready for this number?:


… of interest-rate swap bets currently in place between the Pigmen gambling junkies. Yes, that is TRILLION.  With a “T”.

For those unfamiliar with this particular parlor, in a typical interest-rate swap, one P-man takes the “fixed” side (picking a particular, static, rate) and the other junkie places his bet on the “floating” (or variable) side. So, for every small move in interest rates—up or down—one side or the other takes a financial beating.

Lately, however, as shown in this chart, courtesy of Mish’s Blog:

Posted Image

…the moves have been anything BUT “small”, with interest rates across the board skyrocketing higher, destroying the “floating” bettor’s positions. (Then again, the “fixed” side had already been decimated when interest rates crashed lower over the previous few years, so now it’s the turn of their adversaries to take the hit.)

Of course, we are assured by the Pigmen—and their AlphaThug enablers—that all these bets are “only notional”, “perfectly hedged”, “offset”, and “insured”, but—as was demonstrated back in 2008 (when Fannie/Freddie/FHLBs failed, igniting a massive CDS Implosion), these derivative dens of iniquity can’t possibly be fully hedged.

However, as I posted extensively on this very board, including here:


…back during that frightening meltdown, the ISDA and Federal Alpha Thugs simply tore up and re-wrote all the contracts, picking winners and losers (the most-notable loser being Lehman Brothers), so I fully expect the same type of action this time around.

(Spock Conclusion): Again, under my “Age of Infinite Fiat” theory, it is proven that eternal “Wash, Rinse, Repeat” cycles are perpetrated by the AlphaPigs. For, five full years AFTER “The Great Disintegration” of 2008, the same speculative locusts are playing in the same (and now LARGER) casino, placing bets they can’t possibly pay off, and skimming God-knows-how-many fiatscos in the meantime.

Ya gotta love the modern-day Ponzi Monetary System that allows such games.

This Week Will Tell If The Bear is Really Coming Out of Hibernation

Last week’s selloff did less damage than it may have felt like. The drop stopped in the area of 3 crossing uptrend lines, ranging in length from short term to long term. Here’s what would tell us whether the uptrend is still in force, or signal that something evil this way comes.

I have added 8 new stocks to the swing trade chart pick list, including 2 shorts.

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These reports are not investment advice. They are for informational purposes, for a broad audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance. 

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