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Nuclear Blast In Bond Pits


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Mother, that's ugly. I've watched so many boring days, and the one day I'm forced to pay attention to other stuff, the market falls down and stubs its nose. Damn it. Did John Law II utter something stupid in his "guidance" missive?

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On December 6, 1994, Orange County, a prosperous district in California, declared bankruptcy after suffering losses of around $1.6 billion from a wrong-way bet on interest rates in one of its principal investment pools.

 

[Robert Citron's] strategy depended on short-term interest rates remaining relatively low when compared with medium-term interest rates. But from February 1994, the Federal Reserve Bank began to raise US interest rates, causing many securities in Orange County?s investment pool to fall in value.

 

During much of 1994, Citron ignored the shift in the interest rate environment and the mounting ?paper losses? in his portfolio.

 

Carry trade calamity

 

Bob Citron was just an odd-lotter compared to the John Law II Hedge Fund. Try LTCM with a couple of zeros added ...

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What we may get is 2 months of slow grinding correction then one more Bonner run before the election. The way it was going it would have been burn and crashed scenarios.

 

 

Whole rally has more to do with election so don?t expect a crash yet. 1260 on spoon is still possible around September.

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So my very nervous, and now thoroughly yelled at Aermiscrew phone rep, tells me that the quote provider went down.

 

Denied it was on purpose.

 

Said it also brought down ETrade and Scwhab.

 

It's like GLOBEX all over again.

 

I told him that his supervisor needs to give me a call and that I demand to know exactly what happened.

 

If it was due to poor infrastructure to handle the volume, I will see about recovering damages.

 

But I suspect the plug was simply pulled.

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What we may get is 2 months of slow grinding correction then one more Bonner run before the election. The way it was going it would have been burn and crashed scenarios.

 

 

Whole rally has more to do with election so don?t expect a crash yet. 1260 on spoon is still possible around September.

Is a occurence like Jan-Mar 00 possible, when yield curve inverted, DOW stopped in its tracks BUT Nazquack bonered up for 6+ weeks before calling it quits?

 

At that time, if I remember correctly, the leg from May thru Sep was led by Telco's. This time too, Telco's broke out earlier this month. Will they lead the last leg up?

 

Will history repeat?

 

- Silky

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