Down goes the Dow

Shmema wrote:

Congress is reportedly near agreement on the debt ceiling. The sky's the limit for the Dow today. Hope you bought in yesterday, or last week.

Not so fast.

The Tea Party will likely stand firm - they are true believers.

So Boehner will have to break the GOP mafia pledge that legislation must be passed if and only if it receives a majority of GOP votes. He will have to let Dems vote to get this thru the House (which is necessary). It will be career suicide if he does this.

Will he be willing to commit career suicide? This guy is a career politician. I would say no. I think it will take a Wall Street bribe to him -- a nice quite one which is not out of the question -- to avoid what could be a terrific decline in the markets worldwide.

This shows just what an irresponsible place the market is. It in no way reflects actual values of stocks if indeed it ever did. Pure speculation. Good way to lose your shirt for those of us who are merely riders on the storm

K5 wrote:

This shows just what an irresponsible place the market is.

You contrive some crazy scenario as your "proof" that the market is irresponsible? What are you smoking?

Huh?? wrote:

K5 wrote:

This shows just what an irresponsible place the market is.

You contrive some crazy scenario as your "proof" that the market is irresponsible? What are you smoking?

I didn't contrive this scenario. This is what is happening. Just because you don't know about it does not mean it exists.

I can never understand why those who are so ignorant of the facts on a certain topic are the most arrogant in their opinions (and angry too). Must have something to do with under-development of parts of their brains.

I'm not angry, but if you expect me to believe that Boehner has accepted a bribe from Wall Street, then you need to provide some proof. Otherwise it will indeed be considered a scenario contrived by you. So put up, or shut up.

K5 wrote:

Huh?? wrote:

You contrive some crazy scenario as your "proof" that the market is irresponsible? What are you smoking?

I didn't contrive this scenario. This is what is happening. Just because you don't know about it does not mean it exists.

I can never understand why those who are so ignorant of the facts on a certain topic are the most arrogant in their opinions (and angry too). Must have something to do with under-development of parts of their brains.

Hey, I like your style. Start with sheer speculation on your part but post as if it is established fact. Follow up with bald face insults to ensure a response. Repeat.

You've got it down pat. Two thumbs up.

___

so coach d - is the straddle working? stocks are up a percent, but the vix has cratered absolutely - down 15%. JFC.

I don't understand options - you made money on the asset part of the option, but you lost on the volatility side, right?

[quote]The Style Council wrote:

[quote]K5 wrote:

[quote]Huh?? wrote:

Hey, I like your style. Start with sheer speculation on your part but post as if it is established fact.

What exactly am I speculating?

Other than where I am clearly guessing as to what I think will happen -- and I make it quite plain that I am doing so -- the basis for my comment is:

"Boehner will have to break the GOP mafia pledge that legislation must be passed if and only if it receives a majority of GOP votes. He will have to let Dems vote to get this thru the House (which is necessary). It will be career suicide if he does this."

Do you actually call this speculation? R U unaware of what has ben going on in the House recently?

Pointing out that someone is ignorant of the facts is not name calling. It is truth telling

Read more:

http://www.letsrun.com/forum/flat_read.php?thread=5369837&page=47#ixzz2huGmyCKh

Well done. You are well on your way to 1000 posts. And more impressively, you have out-flagpoled Flagpole himself with your constant distortions, half truths, selective inclusions and tireless efforts. Flagpole, the master of these methods has long since given up here.

Congrats!

How to avoid discussing the facts.

You guys can just never admit to your dishonesty.

Well done.

Boehner to talk at 3;00 PM. Presumably to announce the Senate deal will be voted on by the whole House. Now if he instead says no, GOP vote only, watch the bottom drop out of the market

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terrible econo-political call.

Here’s Boehner’s full statement:

“The House has fought with everything it has to convince the president of the United States to engage in bipartisan negotiations aimed at addressing our country’s debt and providing fairness for the American people under ObamaCare. That fight will continue. But blocking the bipartisan agreement reached today by the members of the Senate will not be a tactic for us. In addition to the risk of default, doing so would open the door for the Democratic majority in Washington to raise taxes again on the American people and undo the spending caps in the 2011 Budget Control Act without replacing them with better spending cuts. With our nation’s economy still struggling under years of the president’s policies, raising taxes is not a viable option. Our drive to stop the train wreck that is the president’s health care law will continue. We will rely on aggressive oversight that highlights the law’s massive flaws and smart, targeted strikes that split the legislative coalition the president has relied upon to force his health care law on the American people.”

"Boehner additionally confirmed that he would "absolutely" allow the whole House to vote on a plan introduced on Wednesday in the Senate"

Boehner got squeezed by somebody. GOP rules require a GOP majority before allowing a full House Vote

NYC guy wrote:

"Boehner additionally confirmed that he would "absolutely" allow the whole House to vote on a plan introduced on Wednesday in the Senate"

Boehner got squeezed by somebody. GOP rules require a GOP majority before allowing a full House Vote

not a rule - just a guideline. it is broken regularly, if not often. Four times in 2013 alone.

Clearly, Boehner knows when it is time to govern. The tea party guys get to go home and say they fought hard and voted no, but they died with honor.

Named for the former House speaker, J. Dennis Hastert of Illinois, the “rule” is more of an informal guideline in which the majority party typically does not bring bills to the House floor unless they have the support of more than half of the majority party’s lawmakers. Such votes are fairly rare: the most recent vote was the 36th time it has happened since 1991, according to a tally by The New York Times.

I'm making a killing today.

K5 wrote:

What exactly am I speculating?

"I think it will take a Wall Street bribe to him -- a nice quite one which is not out of the question -- to avoid what could be a terrific decline in the markets worldwide."

Klondike5 wrote:

What's the bottom?

I am betting sub 13,000

*golf clap*

agip wrote:

___

so coach d - is the straddle working? stocks are up a percent, but the vix has cratered absolutely - down 15%. JFC.

I don't understand options - you made money on the asset part of the option, but you lost on the volatility side, right?

If you don't understand options pricing, this is a link to the Black-Scholes model, which gives you "fair value" for an option at any point in time (there are several such calculators out there):

I am long volatility, and you expect the correct side to go up more than the incorrect side goes down (more or less like how long-short hedge funds work). And because we are close to expiration, very little time premium needs to be purchased, so there is potential to make "a killing". It's just that I figured that if the debt ceiling was breached, there could be a crash, and it doesn't get breached, it's probably lights out to the upside.

I was long both the 755 calls and the 730 puts yesterday.

Today the 755 calls are up 2.05 (from 5 yesterday) and the bid/ask is 12.10/16.60. The 730 puts are listed at 2.00, down 0.55, and I've closed that side of the straddle. The catch was that I was having trouble buying puts, because nobody wants to sell those (you can really only hedge with futures, and I don't think too many professionals wanted to play that game if they intend to survive). Assuming the deal is passed by the House and the market responds as expected, I will likely just hold the calls to expiration.

I don't really recommend this kind of thing. As I posted well above, options are really a game that's rigged against the buyer as you have to be right about the direction, magnitude, and time, thus more than 90% of options expire worthless. I'm almost entirely a seller of covered options when I do it at all (rarely these days). This was just a perfect set up for an anticipatory hedge, and I will jump in behind it with futures.

Where's the beef? wrote:

I'm making a killing today.

Yes great day. I moved my 401k to bonds for the end of play. Will put it back in growth when the market goes back to around 15,000 or 15,100 over the next week and net a few more % points. Up 34% YTD.

Finance109 wrote:

Yes great day. I moved my 401k to bonds for the end of play. Will put it back in growth when the market goes back to around 15,000 or 15,100 over the next week and net a few more % points. Up 34% YTD.

Ouch.

spade detector wrote:

Klondike5 wrote:

What's the bottom?

I am betting sub 13,000

*golf clap*

Keep your pants on, smart guy. This thing isn't over yet. I can feel it.