**$4.5 BILLION 'Bin Laden Trade' STOCK MARKET TO CRASH < SEP 21?** (Reminder: Today's doomsday)

LiveLeak ^ | 24 Aug 2007 | staff

[tlb]

THEY DID IT AGAIN. . . . ANOTHER HUGE SALE OF OPTION CONTRACTS ON $4.5 BILLION WORTH OF STOCKS BETTING THE MARKET WILL LOSE 30%-50% OF ITS VALUE IN FOUR WEEKS!

There are 65,000 contracts @ $750.00 for the SPX 700 calls for open interest. That controls 6.5 million shares at $750 = $4.5 Billion. Not a single trade . But quite a bit of $$ on a contract that is 700 points away from current value. No one would buy that deep in the money calls. No reason to. So if they were sold looks like someone betting on massive dislocation. Lots of very strange option activity that I haven't seen before. I've been doing this about 25 years.

The entity or individual offering these sales can only make money if the market drops 30%-50% within the next four weeks. If the market does not drop, the entity or individual involved stands to lose over $1 billion just for engaging in these contracts!

Clearly, someone knows something big is going to happen BEFORE the options expire on Sept. 21.

[Badeye]

Market opened ‘up’.

[chuckles]

There are literally tens of thousands of calls and puts expiring today at all strikes. Any group of them could be right for any reason. The calls could have been bought or sold 6 months ago. I would be more interested in puts bought within the last month or so. If a bomber was captured or backed out, the rags would be out a bunch of dough if they bought a long while ago. Most likely, If it were me, I would take a position when I knew everything was in place.

Move along, nothing to see here. Although, it would be nice to see the bastids loose their a$$ in the Bush market.

[listenhillary]

bookmark

[CDHart]

Between Glenn Beck and the hysterical stock market posts I'm about to have a nervous breakdown. My husband will be able to retire on Sept. 25, when he turns 62, but he plans on working two more years at least. He can't take out his 401K funds unless he leaves the company. So will our 401K bomb within the next two years? If that's the case, I'd rather he retired now and took the money. Also, does anyone know how 401K funds are taxed when they're taken?

Carolyn

[Just another Joe]

By The Way, I’d like to be the first to lament over the total loss of my 401K, even before it actually happens

Aw, heck, just ask Uncle Sam for a bailout.
If mortgage defaulters can get one I don't see why someone who was actually prudent couldn't. </sarcasm>

[chuckles]

You can take the money, roll it into an IRA and take out what you want periodically and pay JUST the tax on that amount without penalty after you are 59 1/2. Yes, IMHO, the US will probably have market troubles in the near future.

Is all his 401k in one company? Can he diversify to bonds, ETF's, etc? I would contact a financial advisor BEFORE doing anything. If you don't do this stuff for a living, YOU WILL MOST LIKLY TAKE A HIT!!

I worked at SBC for 30 years and took a lump sum. I make 16% a year on average because I have done this sort of stuff for 25 years. The guys that retired with me have mostly gone back to work. The "professionals" took their money and lost it. The money managers make money either way and they are not much better than car salesmen, IMO. They DO have more knowledge that the average joe though. Just remember you can't pay somebody to love your child, and you can't pay somebody to care about your money more than you do.

Much depends on how much you have right now and how much you owe, and how you expect to live retired. If you owe a bunch of money or you expect to live high on the hog retired, it will probably be short lived. Most people, not all, unless they have inherited money or win the lottery, don't have enough money saved to live like they want to live when they retire. All these decisions are yours, not anybody else's.

The best way to start is debt free. If you still owe money, you are starting in a hole. If you don't start in debt, you can see how it goes, then decide if you want to buy something or travel or whatever.

One thing to think about right now is inflation. IMHO, It is about to get REDICULOUS! We live in a global economy now and just because the US slows down doesn't mean the world will stop. If gas got high in the past, Americans would sit home and gas would go down. Now, if you don't buy gas, the Chinese will just buy more. The world won't go back to bicycles and mopeds. They are also eating food we used to have piled in silo's. Pork is up 500% in China. Corn, soy, and wheat are also skyrocketing. Cheap is over! Think about $3 loaves of bread and $5 gas. IMO, it's very close, maybe even shortages.

[CDHart]

Thank you for your views. Now I'm even more concerned. It's very scary not to know what you're doing.

Carolyn

[JFC]

I just checked my 401k and it has gone up from Monday - today to—— 2,100.00

[ctdonath2]

[yawn] I’m going to lunch. Ping me if anything interesting happens.

...I’m increasingly considering starting a website that aggregates all these TEOTWAKI/SHTF/BOHICA predictions and rates the prophets thereof.

[RightWhale]

DJIA up 90 on ‘Black Friday’.

[chuckles]

A good rule of thumb would be to take the value of your savings, multiply by about .07, and see what that gets you. Then take any other income you might get and add it on, like Social Security, or pensions. If you figure you can’t live on that, then I might still retire, but look for another job. You could then get your 401k out and diversify it, but just let it build for a couple more years. There are some reasonable ways to make 7% without unreasonable risk, but not in CD’s or bonds. I trade options and stocks, so I do take on more risk, but the rewards are greater. I hate to tell people about that though because many feel they can do the same as I do without any experience. CAN’T BE DONE!!! I take hits along with the gains. Some can’t stand the pressure. Much of investing is knowing yourself. If you have a fit and lose sleep over losing $1k, investing to make a living probably isn’t going to work. You have to be able to make $30k-$50k consistently to live even moderately today. As an example, I LOST $30k last month. I was stupid, it's my fault, but I know I will make it back and then some. I knew we were overdue for a 10% pull back, but my particular investments were worse than that. If I lost sleep over it or froze up, then I have to get out and go back to work. You have to be able to function under pressure and realize not every month will be a winner. The month before, I had a good month and even made over $10k in one day. It all has to average out. All this comes with experience, reading charts, knowing option calls and puts, and keeping up with current trends. I watch about 3 hours of finacial TV a day and read many letters just to keep up with what the "talk" is. I've been in the market since Carter and 22% interest rates, I've seen the crash of "87,( I was hunting in Colorado then), and the tech bubble and 9/11. There isn't too many ways to protect against such things.

Take into consideration any other income you might have and you can see that you may have bought your last new car, taken your last vacation, etc. People that are used to living on $60k-$100k per year will have a rude awakening unless their net worth is a couple of million. There are some that have it, but many don't. The biggest bugaboo in retirement, (For me anyway) is medical. If you are in good health, count your blessings. If you have even minor problems, they can become major when you retire. Even with insurance, I'm going broke. My mother in law is paying $800- to $1300 a month for prescriptions. My father in law is about $300 a month. Their retirement is $1800 a month. Guess who makes up the difference. My mother is going backwards now and refinancing her house to pay her bills. Soon, she too will probably be on my expenses. My daughter is going to college and has no job right now. She also has Crohn's. I have a bad back, tachycardia, and high blood pressure. Needless to say, doctor bills and drugs are a MAJOR problem for me. When I retired, I wasn't aware that all these families would be on my money, but they are. There is much to think about and analyze when you decide to stop working. My biggest goal now is to move out of my 4 bedroom house and get something more mobile. I may even rent for awhile. If you live in a city, chances are your taxes are high and going higher.

Everybody has their own situations and requirements. I live a very frugal life so I don't mind giving up some to help others in need. Many of my friends however can't afford a car breakdown without refinancing their home. Everybody is different.

[CDHart]

Thank you for the advice. I've printed it out and plan to discuss it with my husband.

Carolyn

[abb]

So. Are we all gonna die today, or what? The market’s been up all day and is now up 77 pts with less than 2 hours to close. I have my mattress standing by in case it needs stuffing...

[tlb]

Just a thought to all. At the time of this thread we did not know or appreciate the importance of the Sept 6th Israeli airstrike on the mystery Syrian (WMD?) site.

“That was confirmed to The Spectator by a very senior British ministerial source: ‘If people had known how close we came to world war three that day there’d have been mass panic. Never mind the floods or foot-and-mouth — Gordon really would have been dealing with the bloody Book of Revelation and Armageddon.’”

http://www.freerepublic.com/focus/f-news/1906548/posts

Had there been no Israeli strike on Sept 6, one wonders if the financial markets in the days leading up to Sept 21st would have been so uneventful.

[ctdonath2]

Since 9/11 we’ve had several “doomsday dates”, which have come and gone with nary a whimper.

Methinks a lot of people just _want_ a prediction of grand destruction to come true.

[DocRock]

BTTT

[Badeye]

‘Since 9/11 we’ve had several “doomsday dates”, which have come and gone with nary a whimper.

Methinks a lot of people just _want_ a prediction of grand destruction to come true.’

Yep, especially those living in mommy’s basement.

[RockinRight]

Like certain Freepers?

[Badeye]

I haven’t run into one that I’m sure lives in mommy’s basement here at FR, but its a statistical certainty there are a couple registered here.

[RockinRight]

Eeh, there are a few...