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View Diary: $1 billion bet against US last week. Who is it? (39 comments)

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  •  Which? That the trade was made, that it (0+ / 0-)

    was a trade against downgrade, or that it was made this week vs. last (I fixed title).  Thanks.

    •  It's an $18.6 million futures trade (0+ / 0-)

      That's the total investment. It's a hedge. It is not a billion dollar bet in any way, shape or form. The author of the sourced article is ignorant at best, totally incompetent at worst.

      To make a billion dollars on this futures trade, the value of the US Treasuries would have to go to zero. This isn't going to happen even if we default.

      In the futures market, somebody else is making the very same bet on the upside of the Bond market.

      Trades of this size happen many times a day in the US Treasury Futures market. This one is a little large for one single trade, but it is not unusual. There are thousands of investment groups who can afford to purchase such a hedge.

      "All people are born alike - except Republicans and Democrats" - Groucho Marx

      by GrumpyOldGeek on Thu Jul 28, 2011 at 01:20:26 PM PDT

      [ Parent ]

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