I hadn't heard of Ernharth but he seems to have figured out this situation well in advance of most.

The socio-economic system has too many people who are socially (rather than productively) eligible for the gains of everyone's productivity.

you mean here? Maybe I'm one sheet further to the wind than I thought.

http://mauberly.blogspot.com/

though the story broke on a web forum for brokers, there is a presumably verified news account out there that I've seen, but this attempts an explanation you may understand better than I:

Currently there are about 63,000 700/1700 boxes open. Perper expects that once the September options expire, you will see similar boxes established in the December series. As to why the September 700 put has over 116,000 contracts open, Perper thinks a good portion of that was created from the prior rollover when April options expired.
The positions in question had option industry experts perplexed to come up with a rational explanation, which are far from the best or most efficient way to profit from what would be outlier events.
Those concerned about the worst-case scenario recalled that large put contracts were placed on airline stocks, notably American, a unit of AMR and United Airlines, in the weeks leading up to the Sept. 11, 2001 terror attacks.

http://www.thestreet.com/newsanalysis/optionsfutures/10377063.html

and from our friends at Military Times

Air Combat Command will have a command-wide mission stand-down Sept. 14 to review its procedures in response to the mistake. Even units without oversight of nuclear weapons will take part in the stand-down, Thomas said.

http://www.militarytimes.com/news/2007/09/airforce_nuclear_warhead_070905/

I'm raising my glass w/ ya

_{Turn back to the Constitution - and READ it.}

The article on the box spread explains the current trade as a financing proxy. It's a put at 1700 and a call at 700 which has an intrinsic value of 1000 and is selling at 997. For the seller it is explained as a short term financing: he gets 997 now and gives 1000 at expiration. For the buyer the reverse.

Did not see the trade in the context of the nuclear error. Sorry.

Many thanks.

http://mauberly.blogspot.com/

it's clearly a hedge to me. Maybe Numerian knows more, but that is what it looks like to me. It doesn't look like the phantom AMR puts (I say phantom cuz I've never seen real proof) before 9/11 that have been rumored.

^{"There is a principle which is a bar against all information, which is proof against all argument, and which cannot fail to keep a man in everlasting ignorance. This principle is, contempt prior to examination."}

the article made my eyes glaze over. what's the exposure on this trade? what does the trade stand to lose or gain when realized? that's about all I can understand, xdollars risked vs xdollars gained.
this horseracing business of options has never made sense to me, except as a hedge against a bad crop season, that I can understand, the rest is goobledygook.

if I read it right. On 997 over the term til expiration. Don't screw with it. Sell chicken. Mind the store. It's a better idea. Do what you know.

"what's the exposure on this trade? what does the trade stand to lose or gain when realized?"

http://mauberly.blogspot.com/

116,000 x $3? too rich a risk for my blood. I understand it takes a lot of dough to play w/ the big boys. I just try to preserve the little I have. and on that note....
thanks again for the info

Something that is done to benefit both the lender and borrower. It could also be a hedge if we knew something about the other positions these players may have.

As to the theory these trades are hedges against another 9/11 event, that is possible but these trades seemed to have been put on in the spring. Someone would need great foresight to do that, though even back in the winter there were published reports of a possible attack against Iran. If you've got enough discretionary investment dollars it is possible you would stash some away in this option position just as a hedge against disaster. Still, it is both expensive and not very discreet to do it this way, so I suspect there are more mundane explanations for these positions.

Kudlow, of all people, seemed a little nervous on his show tonight about the CP market and seize up in London, among other things.

If I heard it right, the profits of non financial S&P corporations are not increasing, and with increased labor margins etc., he sounded concerned about the general weal.

http://mauberly.blogspot.com/

Kudlow seems distracted occasionally on his show, and doesn't always focus on what his guest is saying.

S&P profits have been dominated for over a year by the financial and energy sectors; most everybody else is languishing. Maybe Kudlow is realizing what will happen to the stock market if profits from its biggest sector collapse. But as to his being worried about the "general weal", I have my doubts. His show is all about the corporate weal and the executive/billionaire weal. You have to move over to the Lou Dobbs shows to hear anything about the general public, and even then it is only in the context of illegal aliens stealing jobs from the middle class.

You're quite right. I'm sure Kudlow's eight figure equity is his fundamental, general weal, coincident indicator.

http://mauberly.blogspot.com/

But it does leave one to wonder, why?

He's only done business news most of his life, which involves regurgitating company press releases, interpreting economic data, interviewing CEOs, and prognosticating on the markets. Hardly fit training for actual reporting. The same can be said doubly for Neil Cavuto.

On the other hand, what examples do these people have to follow? Political reporters and commentators think they are covering sporting events, describing who's up and who's down, and treating elections like football contests. There's very little actual reporting done these days, especially on television.

Link

On Dobbs' show Monday, during a conversation with Romans, Dobbs said: "Following one of your reports, I told Lesley Stahl, we don't make up numbers, and I will tell everybody here again tonight, I stand 100 percent behind what you said." He later added, "And the fact that it [the number of leprosy cases] rose was because -- one assumes, because we don't know for sure -- but two basic influences: unscreened illegal immigrants coming into this country primarily from South Asia, and secondly, far better reporting."

... In the "60 Minutes" piece, Dobbs told Stahl, "Well, I can tell you this. If we report it, it's a fact."

"How can you guarantee that to me?" Stahl asked.

"Because I'm the managing editor, and that's the way we do business," Dobbs replied. "We don't make up numbers, Lesley. Do we?"

I do like what he has said about outsourcing.

http://mauberly.blogspot.com/

I'm not surprised that there is a command wide stand down. It really seems the smart thing to do.

unless Air Command is rebelling against something we don't know about, you know darn well we need a casus belli to go into Iran. and you know how this admin operates, there is no doubt in my mind that a war is just the thing to blame the impending financial meltdown on. The only thing of value for the next 30 years is oil, not inflated electronic bits of money, and if you want to own the middle east that "new Pearl Harbor event" is necessary to bring the population along. ask JPD about the July CFR article his sig line comes from, there are cooler heads trying not to have to do what needs to be done in our "National Interest". ...and look over there, OBL right on time.

the intention of all these bits and pieces of news may be only to disinform and scare our enemies, and most may have rational explanations, but all of it combined scares the shit out of me.
that and the fucking black helicopter still flying around Chicago.
at least there's only one, eh? ;>

I see it there was a major breach of protocol and I would expect them to have a stand down to go over procedures. I remember at least twice when we were at FT Campbell that they did the same(once) for all helicopters and another time concerning planes. In one case one helicopter landed on top of another during night training, it was interesting sound to wake up to. lol

I do find it strange that the nuclear 'mix up' happened in the first place and and don't discount with this bunch that more could be happening behind the scenes.

but I take it to mean ceasing of all normal procedures while reviewing facts about mistakes. I can understand that in the context of my own work, when the shit is hitting the fan, sometimes it's good to step back and re-assess. but command wide? now? and they announce it to the world? sumthin smells...

ACC orders commandwide standdown Friday

By Bruce Rolfsen - Staff writer
Posted : Monday Sep 10, 2007 5:59:34 EDT

On Sept. 14, flight lines will be very quiet at Air Combat Command bases.

The entire command — about 100,000 active-duty airmen — is standing down training flights and many other operations as part of a command-wide safety day.

Command boss Gen. Ronald Keys ordered the Sept. 14 safety standdown in the wake of the Aug. 30 nuclear incident at Minot Air Force Base, N.D., in which six cruise missiles armed with nuclear warheads were loaded onto a B-52H and then flown to Barksdale Air Force Base, La., without anyone on the ground or bomber realizing the nuclear weapons were on the plane. It was not until the B-52H was parked at Barksdale that ground crews discovered the cruise missiles were carrying real warheads.

Command spokesman Maj. Tom Crosson said wing commanders would determine how their units review operations and safety procedures and checklists.

Just how serious Keys takes the lapse of regulations at Minot is reflected in the fact that the safety stand-down is the first commandwide safety day in recent memory. In the past, the command has singled out specific types of aircraft for safety days and in 1997 the Department of Defense held a departmentwide safety review day.

I think it just involves the Air Force and not the Navy or Army pilots.

of the NORAD training exercises held 9/11/01? like I said i hope it's all disinfo. wasn't '97 the year PNAC was founded? I feel like the guy in "A Beautiful Mind"
http://www.newamericancentury.org/RebuildingAmericasDefenses.pdf

read it again w/ seven years of hindsight and paranoia ;>

and a little nervous

you then. ;) Actually a good diary at kos 'Odd News from 6 years ago.' it is full of forgotten nuggets.

who sees it like I do (that could be bad as you are new here, for all I know, you're an agent of disinfo ;> )
do you really think holding it in US dollars is OK? I worry about the inflation preceeding the deflation, but I guess were already there, eh? I'm not so sure I trust FDIC insurance at this point either.
but I'm hedging a little and only pulling a third from my bank stocks, I figure they still have the most pull on policy and will stand to profit if they get their way/r. just the third was double ROI. crap, the blood on that money doesn't wash off easily, hard to have a conscience and be in the market. "fuck'em all, save yourself" as my trader friends say.
German energy has been very, very good to me as well.

but I'm considering throwing a case of eggs at the CBOT 'cuz their killing me w/ corn speculation. ah, maybe that's where I need to be, or maybe it's too late in that game? strangely, meat prices are stable but the secondary products such as diary and eggs are horrifying as they catch up. maybe I should be a corn farmer.

But the central banks will act in concert, if they have to, to keep the system moving. The advice given above is sound, but don't be surprised if the banks keep things afloat.

If you can find a way to split your short funds into many currencies, that would be better than putting them all in dollars. But I don't know a way to do that easily for a small investor. Maybe someone knows a multicurrency money market fund that is not deep in bad commercial paper.

http://mauberly.blogspot.com/

(I only know enough to be dangerous to myself) Is it cash on hand?
can't I just go to the bank and have them give me paper Euros or kugerands or sumthin? what's today? the 10th? aw, fuck...
trying to be a reponsible business owner, prudent investor and tin foil hatter all at the same time will keep a person busy..and I'm late for work again!

http://mauberly.blogspot.com/

yen is falling a bit. There will be softer talk from the big talkers to coax this higher.

"Here kitty, kitty."

http://mauberly.blogspot.com/

She is the missing Brigham Young Univ. student whose body was found in a Utah canyon on the weekend.

See this CNN story: http://www.cnn.com/2007/US/09/09/utah.student.body.ap/index.html

She even merited an article in the NY Times, though not on the front page.

For some reason I thought it was a guy that was missing. I'm not always too alert on US news. Thanks

EOM

I think your Dad's stories describe exactly what the problem is becoming: the removal of credit from the economy. It is not so much the problem of getting cash, since neither business nor the consumer relies heavily on cash anyway. It is a problem of the sudden absence of credit, because lenders get spooked about the increased prospect for defaults.

This is already happening to the consumer in the mortgage arena. We are back to 1995 when the only mortgages available had to qualify for purchase or guaranty by Fannie Mae (or alternatively the bank extending the mortgage fully expected to hold on to it, not sell it off as a security instrument).

Suppose installment credit becomes hard to get, or worse still, banks stop issuing new credit cards, and dramatically cut back on the credit card lines now available. This is how a recession turns into something really bad.

I also wouldn't be surprised if the Fair, Isaac scoring system for consumer credit turns out to be not as good a predictor as the banks had thought. There has been a lot of abuse of these credit score numbers - for example to deny availability of auto insurance - and it is certainly plausible that the credit score turns out to be a poor prognosticator of consumer defaults considering how many purposes the score now serves.

Always a bad idea, talk to any good programmer! Reuse of any algorithm must be through specific polymorphisms or you run the risk of breaking your system in hard to predict ways should the algorithm need to change. A common enough mistake but poor analysis on someone's part.

Its almost an urban legend among programmers but there is the case of the Australian Military Helicopter Simulator. It seems some realism was added to simulate Kangaroos scattering as a Helicopter descended toward an LZ. It seemed to work at first; the helicopter pilot would see the realistic looking Kangaroos and Wallaby's scatter as the down wash from the Helicopter's prop fanned the grassy terrain but suddenly the animals stopped running, turned, aimed their assault rifles, and fired at the helicopter!

It seems that the programmer had cut corners modifying the simulation by having the Kangaroo class inherit from FootSoldier because there was no other available, more appropriate, abstract class to inherit from.

EOM