noah way
Android Enthusiast
Investors: The $1 Billion Armageddon Trade Placed Against The United States
Someone dropped a bomb on the bond market Thursday
Someone dropped a bomb on the bond market Thursday
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$1 Billion Armageddon Trade Placed Against The United States
- Thread starter noah way
- Start date
A.Nonymous
Extreme Android User
There are always people in the market who bet big on things like this. Sometimes it works out for them and sometimes it doesn't.
copestag
Android Expert
well considering the S&P and Moodys arent the only ratings groups in existence..... they just happen to be the ones that are most famous........ and considering that several (4 at last I heard) ratings groups have ALREADY downgraded the US AAA rating...... Id say this was a pretty safe futures bet... since its the past/present/and future all tied into one......... theyre betting on a repeat of last nights ballgame.... theres no way to lose that bet
ElasticNinja
Android Expert
The US should not have an AAA rating. Moodys and the rest of them are a joke.
Sub prime was AAA, and Ireland has a lower rating then many a banana republic
Sub prime was AAA, and Ireland has a lower rating then many a banana republic
Isthmus
Android Expert
You guys are making it sound as if this was a bet in the sense that it was a guess. I assure you it is anything but. I work for a company that issues tons of securities back in part by treasuries. For the past month we have been working ungodly hours trying to figure out how best to restructure our investments so as to hedge against a downgrade. All of our research is telling us that while the US might be able to avoid a default on August 2nd (or a week later), but not a downgrade. We and our counterparts are all working under the assumption that there will be a downgrade. the biggest uncertainty is not whether there will be one, but when exactly. One could come as early as next week, or 6 months from now, but rest assured, it is coming.
On a separate note, part of the reason the markets aren't completely freaking out is because there aren't very many reserve currencies out there that large investors can invest large amounts of money in. What are the world's main reserve currencies? US Dollar, swiss francs, Yen, euro UK Pound, followed by less interest in Canadian Dollars,Australian Dollars, and maybe singapore dollars? That's about it folks, there really aren't a whole lot of other choices. Of those with the exception of the swiss franc, most of the major reserve currencies are currently stressed. maybe a us downgrade will make the canadian and australian dollars more attractive, but again, there are not a lot of options. It's not like any investors are going to start using Yuan or rubbles as reserve currency.
While the markets might remain relatively unstable, a downgrade is goingto have massive cascading effects down the system, forcing a reveluae of everything. This is not something the US wants or needs, especially in the middle of a recession. I agree that serious reform is needed in US economic policy, but this is not the way to go about it.
On a separate note, part of the reason the markets aren't completely freaking out is because there aren't very many reserve currencies out there that large investors can invest large amounts of money in. What are the world's main reserve currencies? US Dollar, swiss francs, Yen, euro UK Pound, followed by less interest in Canadian Dollars,Australian Dollars, and maybe singapore dollars? That's about it folks, there really aren't a whole lot of other choices. Of those with the exception of the swiss franc, most of the major reserve currencies are currently stressed. maybe a us downgrade will make the canadian and australian dollars more attractive, but again, there are not a lot of options. It's not like any investors are going to start using Yuan or rubbles as reserve currency.
While the markets might remain relatively unstable, a downgrade is goingto have massive cascading effects down the system, forcing a reveluae of everything. This is not something the US wants or needs, especially in the middle of a recession. I agree that serious reform is needed in US economic policy, but this is not the way to go about it.