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$1 Billion Bet In July Of US Downgrade Brings Questions Of Insider Information

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posted on Aug, 8 2011 @ 03:49 AM
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Originally posted by topdog30
If I remember correctly, we all had knowledge of this $1billion bet prior to the downgrade right? I think there was a thread on here and other sources as well. If that was the case, we all could have participated and taken advantage of the heads up. I don’t feel there was any insider trading going on. This downgrade was talked about long before it happened and some people could see the writing on the wall and placed a bet. Good for them. Wish I would have placed mine. Next time someone makes a bet like that I'll be right behind them.


Yep we sure did. Its been over due for years. The person who placed the Billion $ bet probably didn't even raise a sweat over losing it. Hardly chump change but if you have 50 Billion more and it was as obvious to them as it was to others, then why not. It was probably a dare... knowing some insanely rich people it was more of an ego trip or recognition of manhood. Others have to make do by swimming a crocodile infested river.




posted on Aug, 8 2011 @ 04:02 AM
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reply to post by burntheships
 


Double Deja-Vu anyone??

Cast your minds back to pre 9/11 shares and fast forward a little too 2007 pre-crash...


August 26, 2007
$4.5 billion options bet on catastrophe within four weeks

Anybody have a clue as to what these 'investors' are expecting?

The two sales are being referred to by market traders as "bin Laden trades" because only an event on the scale of 9-11 could make these short-sell options valuable.

There are 65,000 contracts @ $750.00 for the SPX 700 calls for open interest. That controls 6.5 million shares at $750 = $4.5 Billion. Not a single trade. But quite a bit of $$ on a contract that is 700 points away from current value. No one would buy that deep "in the money" calls. No reason to. So if they were sold looks like someone betting on massive dislocation. Lots of very strange option activity that I haven't seen before.

The entity or individual offering these sales can only make money if the market drops 30%-50% within the next four weeks. If the market does not drop, the entity or individual involved stands to lose over $1 billion just for engaging in these contracts!

Clearly, someone knows something big is going to happen BEFORE the options expire on Sept. 21.


This is an enormous and dangerous stock option activity. If it goes right, the guy makes about $2 Billion. If he's wrong, his out of pocket costs for buying these options will exceed $700 Million!!! The entity who sold these contracts can only make money if the stock market totally crashes by the third week in September.

Bear in mind that the last time anyone conducted such large and unusual stock option trades (like this one) was in the weeks before the attacks of September 11.

Back then, they bought huge numbers of PUTS on airline stocks in the same airlines whose planes were involved in the September 11 attacks.

Despite knowing who made these trades, the Securities and Exchange Commission NEVER revealed who made the unusual trades and no one was ever publicly identified as being responsible for the trades which made upwards of $50 million when the attacks happened.

The fact that this latest activity by a single entity gambles on a complete collapse of the entire market by the third week in September, seems to indicate someone knows something really huge is in the works and they intend to profit almost $2 Billion within the next four weeks from whatever happens! This is really worrisome."


Link to source

It was reported on ATS back in the day but faded into the distance.

ATS link

On 9/11 someone made a lot of money but on the 29th September the markets did not tank as predicted. It might have been a guess with both or could be completely unrelated bets?

My gut tells me theres something up with this one though as it is so close (the time it was bet) to the actual time of it happening.


edit on 8-8-2011 by XXXN3O because: (no reason given)



posted on Aug, 8 2011 @ 04:19 AM
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Originally posted by LexiconV

Originally posted by topdog30
If I remember correctly, we all had knowledge of this $1billion bet prior to the downgrade right? I think there was a thread on here and other sources as well. If that was the case, we all could have participated and taken advantage of the heads up. I don’t feel there was any insider trading going on. This downgrade was talked about long before it happened and some people could see the writing on the wall and placed a bet. Good for them. Wish I would have placed mine. Next time someone makes a bet like that I'll be right behind them.


Yep we sure did. Its been over due for years. The person who placed the Billion $ bet probably didn't even raise a sweat over losing it. Hardly chump change but if you have 50 Billion more and it was as obvious to them as it was to others, then why not. It was probably a dare... knowing some insanely rich people it was more of an ego trip or recognition of manhood. Others have to make do by swimming a crocodile infested river.


Plus that,

this downgrade will probably trigger an interest rate hike.

aside from market fluctuations for bond prices, a rate hike will cause the bond prices to fall.

hence, a profit for short positions !



posted on Aug, 8 2011 @ 05:28 AM
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Originally posted by jam321
US should have placed a bet itself and used the money to pay on the debt.

I don't think we will find out who placed the bet.


That is like Pete Rose betting on his own team, except betting on them to lose. I wouldn't be surprised.



posted on Aug, 8 2011 @ 09:05 AM
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reply to post by XXXN3O
 


Oh, good one. Yes, its double deja vu!

I got chills reading that!



posted on Aug, 8 2011 @ 09:36 AM
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Originally posted by xuenchen

(posted on Aug-07-2011 @ 09:56 PM)
and as we speak,

the Asian and Europe markets are way DOWN!

so are the Dow futures !

LOOK for a big Dow-Drop Monday!

some are predicting a 500 to 1000 point massacre !!!!!



yours truely,


Mon 10:30am EST

Dow down -350 !!!!


edit on Aug-08-2011 by xuenchen because:




posted on Aug, 8 2011 @ 09:40 AM
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reply to post by xuenchen
 


S&P downgrades farm lenders, government-backed debt issued by 32 banks and credit unions - AP

www.cnbc.com...


edit on 8-8-2011 by burntheships because: (no reason given)



posted on Aug, 8 2011 @ 09:46 AM
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reply to post by xuenchen
 


Mortgage finance agencies Freddie Mac and Fannie Mae downgraded by S&P, following downgrade of US - @CNNMoney

money.cnn.com...



posted on Aug, 8 2011 @ 09:48 AM
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S&P Downgrades Fannie Mae, Freddie Mac

it's a turkey shoot !!

www.cnbc.com...


just ASK, we can help.



posted on Aug, 8 2011 @ 09:49 AM
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reply to post by burntheships
 


I see we are on the same frequency !

who's next?




posted on Aug, 8 2011 @ 10:12 AM
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Originally posted by xuenchen
reply to post by burntheships
 


I see we are on the same frequency !

who's next?



Love that pic!

Uh oh......

Obama to deliver statement at 1 p.m. EDT - NBC News

www.breakingnews.com...



posted on Aug, 8 2011 @ 10:21 AM
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reply to post by xuenchen
 


Oil plunges below $84 a barrel on credit downgrade
www.forbes.com...



posted on Aug, 8 2011 @ 10:24 AM
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Originally posted by burntheships

Originally posted by xuenchen
reply to post by burntheships
 


I see we are on the same frequency !

who's next?



Love that pic!

Uh oh......

Obama to deliver statement at 1 p.m. EDT - NBC News

www.breakingnews.com...


maybe along these lines

I thought the budget was shovel ready


YOU thought WHAT !



pssst.....I know something you don't know !



posted on Aug, 8 2011 @ 10:57 AM
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What I don't understand is that, who makes the calculations about bets like this.
Maybe I'm stupid, but I wouldn't bet with someone on what just happened because the US's credit WAS going down for sure.

Who was stupid enough to bet a 10% win on : US won't drop in credit rating

Who first takes this billion, who first said it was ok to bet on speculations like that, where does this money come from, why would we even agree to give money to this gambler, who accepted the billion in the first place?

I, do, not understand this system of betting, why is this legal anyway?
Who would be stupid enough to give 10 for 1 on an inevitable bet like this, who decides this amount?
Why must the money be taken out of the system and then charge the bill in interest on the people?

It's easy to say : Hey, you can win 10 for 1 in this bet! ...if the money doesn't even come from your pockets

Did I ever bet with someone knowing I would lose, and then get the money from someone else instead of my pockets?

This just shouldn't be legal.

I've play in casino's before and maybe I'm stupid but the odds of the credit rating NOT going down should of been the 10 to 1 bet? Not the other way around?!!

Usually, the horse with the less chances of winning has the most win value.

WHO THE F%^@ IS STUPID ENOUGH TO GIVE 10 FOR 1 ON A BET THAT IS NOT DANGEROUS TO MAKE?!?!

I don't understand this world, isn't it obvious the people up there make the rules about how much we get f#@%ed in the a$$ while betting on our freedoms being taken away.

Stop this madness, say no the money's value.



posted on Aug, 8 2011 @ 11:12 AM
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Originally posted by User8911
What I don't understand is that, who makes the calculations about bets like this.



Welcome to the futures market.

This chart should enlighten us further.

I would agree, bankrupt morals.




posted on Aug, 8 2011 @ 11:19 AM
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Can anyone explain in layman's terms how the bettor stands to make a profit off the US downgrade?



posted on Aug, 8 2011 @ 11:30 AM
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Originally posted by canselmi
Can anyone explain in layman's terms how the bettor stands to make a profit off the US downgrade?


First, lets start by understanding that this was
$1 billion of real capital at hand, "bet" aka called a "put" in the futures market (where people can
bet what happens in the future (stock) markets... the "put" was someone confident that the United States
was either going to default or to lose its AAA rating which in turn ...that U.S. interest rates would be going up.

I dont know if that is layman enough for you, does that help?
edit on 8-8-2011 by burntheships because: (no reason given)



posted on Aug, 8 2011 @ 11:51 AM
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reply to post by burntheships
 


Was it a "bet" like a horse race? Someone puts money down that a certain event will take place (Horse #3 comes in first place) and it that happens, someone else pays him?
I don't think this is the case, but the way the articles are written, it implies that. Although I assume they are written that way just to use terms people are familiar with.

I assume that the "bettor" actually purchased something, that as a result of the downgrade, will end up being worth more. If this is the case, how does it end up being worth more?



posted on Aug, 8 2011 @ 12:49 PM
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Great topic and contributions, however as I am reading the replies, I find myself somewhat confused and disappointed in a few of them made by a "gold level contributor" who's posts and contributions I have respected and appreciated in the past.


Originally posted by Xcathdra
reply to post by burntheships
 


REspectfully you do realize the National Examiner is a tabloid magazine with questionable journalistic intent and ethics who have been called out before for sensationalism in reporting?

Are there any other sources carrying this story by chance?
edit on 7-8-2011 by Xcathdra because: (no reason given)


I felt the same way after checking the first link, and was waiting a reply, since no need to ask again.


Originally posted by burntheships
reply to post by Xcathdra
 


Hello,

You deny the U.S. lost its AAA rating?

Check the second link, and the related thread.

The futures bet was placed, check eft daily link

I have a hard time taking your post seriously, seriously.

edit on 7-8-2011 by burntheships because: (no reason given)



Originally posted by Xcathdra
reply to post by burntheships
 


Wow.. you completely misread that. I pointed out that the source you chose is not known for accurate reporting. I didnt question it, I simply asked if there were other sources covering the same story.

Quit jumping to conclusion when people ask a question.



Originally posted by burntheships
reply to post by Xcathdra
 


Address the issue, not the poster or the source.

How can you deny the reality of the downgrade?



Whaaa??
I checked the reply again and saw no denial of any such think, merely a question of source. Really makes it hard to take your post seriously, seriously, when you reply rudely, defensively and dismissively. The poster was not attacking you, he was questioning your source and you attacked him, IMNSHO and he did so politely, considering.

Ok, so instead of risking your wrath, and obviously you are not going to answer the question anyway, I decided to do some research myself, so I checked the second source link...

The 2nd link was to an article on ETF Daily and (supposedly) written/contributed by Money Morning contributor Jack Barnes. He does not list his source in the article on ETF. When you do a search on Money Morning for the article by his name on ETF daily, you will not find it. It is not posted on Money Morning, nor on his own blog Confessions of a Macro Contrarian. How curious.


So, I google and find repeats of the article, nearly word for word on various other sites and blogs and source references back to the Examiner article.

The examiner article was written by Kenneth Shortgen, Jr. I googled this name, and found absolutely nothing impressive about his credentials AT ALL. I'm not going to waste my time posting those links, as you can google them yourself, as my only interest is in finding a REAL and verifiable source of the OP's article.

So exactly how do we get a real source for this trade having taken place?



posted on Aug, 8 2011 @ 12:59 PM
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Originally posted by canselmi
reply to post by burntheships
 


Was it a "bet" like a horse race? Someone puts money down that a certain event will take place (Horse #3 comes in first place) and it that happens, someone else pays him?
I don't think this is the case, but the way the articles are written, it implies that. Although I assume they are written that way just to use terms people are familiar with.

I assume that the "bettor" actually purchased something, that as a result of the downgrade, will end up being worth more. If this is the case, how does it end up being worth more?


The other issue with the "bet" deals with which crediting agency would do the downgrade. S and P is not the only agency dealing with the credit rating of nations, as moody's is also in that arena among a few others. So if a "bet" was made, not only would they need to know a downgrade was coming, they would need to know which credit agency would do it.

Im not seeing that in the article anywhere.
edit on 8-8-2011 by Xcathdra because: (no reason given)




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