Abnormal Trading Markets Redux
September 17th 2008 02:29
On September 10th in Abnormal Trading Markets, I wrote:
The good thing I see, for those of us with a mortgage, is the diving 10 year Treasury! Rates have dropped here from 4.27% to 3.62%. Won't be long and maybe I'll be able to refinance that 5.3/4 30 year mortgage for a 4% 30 year mortgage and take out some money.
Today the 30-year treasury bond fell to it's lowest level in years (See Chart). Both the 2-year and 10-year were lower, but not at new lows.
Meanwhile, if you are bullish on the market, the transportation average continues act stronger than the DJIA, by failing by a wide margin to confirm the weakness in the industrials. That's called divergence!
Did you catch Jim Sinclair at Mineset? He wrote:
Aside from the fact that derivatives revert to notional value, The FED must have discovered that the securities that AIG guarantees, plummit if AIG fails, thus the takeover of AIG by the FED.
The good thing I see, for those of us with a mortgage, is the diving 10 year Treasury! Rates have dropped here from 4.27% to 3.62%. Won't be long and maybe I'll be able to refinance that 5.3/4 30 year mortgage for a 4% 30 year mortgage and take out some money.
Today the 30-year treasury bond fell to it's lowest level in years (See Chart). Both the 2-year and 10-year were lower, but not at new lows.
Meanwhile, if you are bullish on the market, the transportation average continues act stronger than the DJIA, by failing by a wide margin to confirm the weakness in the industrials. That's called divergence!
Did you catch Jim Sinclair at Mineset? He wrote:
1. The quoted amount of OTC derivatives on Lehman's books are not notional value, but some silly mark to no market. The real number is trillions. When either party to an OTC derivative fails the value of that derivative instantaneously become the size of what was previously called notional value. With one quadrillion, one thousand one hundred and forty four trillion (BIS) in notional value, there is NO means to stop this financial cataclysm.
2. The s--t has hit the fan because trillions of dollars of OTC derivatives failed Monday.
2. The s--t has hit the fan because trillions of dollars of OTC derivatives failed Monday.
Aside from the fact that derivatives revert to notional value, The FED must have discovered that the securities that AIG guarantees, plummit if AIG fails, thus the takeover of AIG by the FED.
Shares in AIG-backed exchange traded commodities issued by ETF Securities (ETFS) have plummeted after the US insurer was hit by a rash of fresh ratings downgrades yesterday.
Among the worst-hit products are ETFS Livestock, which has plunged 81.06% since yesterday's close, while ETFS precious metals and ETFS petroleum have dropped 50.68% and 51.01% respectively.
Among the worst-hit products are ETFS Livestock, which has plunged 81.06% since yesterday's close, while ETFS precious metals and ETFS petroleum have dropped 50.68% and 51.01% respectively.
If the issuer of an exchange traded note goes bankrupt, investors holding exchange traded products (ETFs And ETCs) backed by these notes will join the ranks of other creditors hoping to get their money back.
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