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Sunday, March 25, 2012



QUESTION: Why would a tracking ETN devised for traders to bet on rising volatility plunge 40 percent in 2 days while volatility rises sharply during the same time period?

Bogus Answer:  Something about the Net Asset Value getting out of line with the value of the underlying notes blah blah blah.

Real Answer:

UPDATE: Credit Suisse Resumes TVIX Issuance After Month-Long Halt 

Obviously, traders at the Big Banks were informed of this before it happened and used this inside information to massively short TVIX ahead of the announcement in order to steal millions of dollars from poor shlub day traders.

 Now, nobody does or should feel sorry for day traders.  They're gamblers.  Just as nobody really feels sorry for investors at MF Global from whom John Corzine and his buddies stole 1.2 Billion dollars.  They were gamblers too.

Here's the rub.  Everyone investing in anything: stocks, bonds, money funds - are also gamblers.  And soon, when everyone realizes that no money is safe anywhere in this rigged system,  all gambling - which is to say all economic activity - will stop.


How far away are we from this point?


Well, during this latest stock market "rally" over 70 percent of the volume was just Banks and their High Frequency Trading Programs running up prices - with money "borrowed" at Zero Percent from the Fed.


And over 90 percent of all new treasury issuance is being bought by the Fed.


 So maybe we're there.  And we just haven't realized it yet.


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