COMMENT: A mystery billionaire (individual or institution) appears to have placed a $1 Billion bet that the U.S. will lose its AAA rating.
Note that, among the possible executioners of this deal is PIMCO, the bond-trading subsidiary of Allianz, the giant German insurer which, like all German core corporations, is part of the consummately powerful, deadly Bormann capital network. (As veteran listeners know, this is the economic component of a Third Reich gone underground. It might be noted in this context, that it will be all but impossible to fully understand this website without assimilating the book Martin Bormann: Nazi in Exile by the late Paul Manning.)
This huge speculation on disaster is reminiscent of the short selling and market manipulation that occurred in the run-up to, and on, the day President Kennedy was assassinated and again in the run-up to, and on, the September 11 attacks. This is discussed in FTR #327.
Another consideration to be evaluated here is the Nazi wing of the GOP. How many members of the Tea Party/GOP faction are affiliated with the Underground Reich and evolved from the “children of Van Damm/Von Bolschwing.” Are they deliberately pulling the plug on the U.S. to benefit Germany and the Underground Reich?
EXCERPT: Someone dropped a bomb on the bond market Thursday – a $1 billion Armageddon trade betting the United States will lose its AAA credit rating.
In one moment, an invisible trader placed a single trade that moved the most liquid debt market in the world.
The massive trade wasn’t placed in bonds themselves; it was placed in the futures market.
The trade was for block trades of 5,370 10-year Treasury futures executed at 124–03 and 3,100 Treasury bond futures executed at 125–01.
The value of the trade was about $850 million dollars. In simple terms, if that was a direct bond buy, no one would be talking about it.
However, with the use of futures, you have to have margin capacity behind the trade. That means with a single push of a button someone was willing to commit more than $1 billion of real capital to this trade with expectations of a 10-to-1 return ratio.
You only do this if you see an edge.
This means someone is confident that the United States is either going to default or is going to lose its AAA rating. That someone is willing to bet the proverbial farm that U.S. interest rates will be going up.
I believe what happened is a debt-ceiling deal was done in Washington and leaked to a major proprietary trader. Everyone knows the debt negotiations in Washington have been an extreme game of brinksmanship between political parties, but now someone knows how that game played out.
This had the hallmarks of one of the largest bond shops in the world knowing something the rest of the market didn’t.
The number of shops or even central banks that can take on this level of market risk is extremely small. Some that come to mind are hedge fund manager John Paulson, Bill Gross’s PIMCO, and the U.S. and Chinese central banks. . . .