6 Comments

1. 

   Andy on January 22, 2015 at 8:09 pm

   Good interview Andy
   Unfortunately Kerry isnt the best interviewer, but we are all grateful for his efforts.
   I have a question Andy (Yet another)
   We have seen the SNB bail out of the Euro Peg last week, this must have caused an FX shorts implosion along with many peg related derivative bets.
   Oil continues to slide, and Iraq just came out with a comment that they also were not going to curb production, this must also be forcing many energy related derivative bets to go bad.
   There are multiple other events now almost too numerous to mention anymore preying on the instability of the derivative markets. What I want to know is, how long does it actually take for these bets to show that they have gone bad? Is there some kind of lag between events and where the bet comes due? Or is it an instantaneous thing that has to be settled imeadiatly?
   The reason I ask, is that is seems strange that this many bets must be imploding, yet nothing is obviously happening in the markets. Is it the PPT hiding it? Or am I missing something?

   • 

     Andrew Hoffman on January 23, 2015 at 8:20 am

     As Bill H. said, people/institutions/sovereigns are already dead. And now oil and the Euro are STILL plunging, with massive volatility, among other things – like the Euro gold surge, for example.

     It’s all about obfuscation and money printing, but it shouldn’t belong before everything collapses.

2. 

   Andy on January 23, 2015 at 9:39 am

   Thanks for your reply as always Andy, I know you are busy, so I will keep it brief.
   I’m sure as you say many people, businesses institutions and even sovereigns are indeed dead.
   But unfortunately it didn’t really answer my question of how the derivative bets come due.
   Is it there and then the moment they breach a line in the sand, or is there some kind of end of the month balancing with them? You see I really don’t know, and I still don’t understand if a bank has eg: €1bn derivative bet that blows up is that imeadiatly settled? Because if this is the case how can the bank continue trading if they don’t have the capital to pay it? Surely they would just be declared insolvent there and then like Bear stearns and Lehman were.
   Actually I’m sure I am not the only one out there that would like to understand this, and you are so generous with your time and expertise Andy maybe you could find a moment to clarify it for me and everyone else who doesn’t really understand these exotic trading vehicles that well.

   • 

     Andrew Hoffman on January 23, 2015 at 9:45 am

     Andy,

     Appreciate your questions, but I am very busy and I’m not sure why you think I know everything (though I’m flattered that you do). As I said, EVERYTHING is obfuscated these days – and likely, back door bailed out – which is the only explanation of how far more serious losses than 2008 can not yield the same derivatives meltdown.

     My view is that 2008 took TPTB by surprise – which is why they “vowed” to not let the same things happen again. I have written of this incessantly, and spoke of it yesterday on my audio blog. This is why markets are “managed” 24/7 (how about the gold smash at 10 am EST today?), as well as stocks, etc. But they are losing control of nearly everything – with the notable exceptions being stocks and PAPER PMs.

     But have no fears, Economic Mother Nature will eventually overcome ALL their best efforts.

     a

3. 

   Andy on January 23, 2015 at 10:30 am

   I really appreciate you taking the time Andy.
   Actually I never thought you know everything, just more than anyone else I can think of.
   I will try to keep from taking to much of your time in future, as I know you really are up against it now. I wish you good business until you run out of metal. Then I will wait for the debrief.

   • 

     Andrew Hoffman on January 23, 2015 at 10:46 am

     Thanks, have a great weekend.
     a