Someone might be expecting around a 150-point decline in the S&P 500 Index (SPX) this week, with the second largest open interest off all weekly options located at the SPX 1275 put strike that expires on October 26th. It is difficut to tell whether it is sell (to open) or buy (to open) volume that created the majority of this open interest, as the percentage that went off at the bid and ask were 45% and 37%, respectively on 10/19. On 10/17, 65% of the 3,202 volume went off at the ask, indicating that someone is expecting a sharp downturn.
No Third Term For The Chairman
Submitted by Tyler Durden on 10/23/2012 07:44 -0400
While the theater of the presidential election hits peak season, and InTrade odds for this candidate or that are approaching flash crash territory, the one person who truly runs not only the US, but the entire "developed" world, Ben Bernanke, is going nowhere. At least not until January 2014. At which point he may be going somewhere - retirement. Reuters cites the NYT: "U.S. Federal Reserve Chairman Ben Bernanke has told close friends he probably will not stand for a third term at the central bank even if President Barack Obama wins the November 6 election, the New York Times reported." In other words: the republican Fed Chairman who mysteriously became a Democrat president's bestest friend (and has been publicly threatened by every other GOP candidate, including Romney, although that would be merely to replace him with Bill Dudley, not Glenn Hubbard) that $4 trillion that the Fed will have in assets at the time of Ben's departure, and $5 trillion at December 31, 2014, just became someone else's problem. Good luck to that someone else unwinding a Fed balance sheet which as we explained previously, will at one point in the next 2 years hold well over half of the marketable US Treasury debt inventory. How the sale of this inventory will happen in a time of spiking rates (because that's what the Fed wants - inflation) is literally anyone's guess, because in practice it will never happen.
Nothing much to add here: when even the man who created this mess can't wait to get out, that's when it is time to finally lift the offer on that central European real estate in a quiet Tyrolean region you have been eyeing for some time.