| mrstickball said: Someone just placed a $1 billion dollar short on the US today. I believe it was none other than George Soros who just shuttered his business due to his worries about federal regulation. Also one of the few people that likely knows enough about America's inner workings to risk so much money. http://moneymorning.com/2011/07/25/the-1-billion-armageddon-trade-placed-against-the-united-states/ To understand what this means: Someone took $1 billion dollars and placed it on the US losing its AAA credit rating, which would likely come from a default or other source that essentially spells doom for the US (a loss in credit rating means we pay more interest out on our bonds as investors will demand more money for their riskier play). If whomever is right, they will win 10:1 against their bet, or would make about $10 billion USD from the deal. Scary stuff, because few people in the world would risk that much personal capital unless they knew it was going to happen. |
Bets would be an appropriate word here. Exactly what casino or bookie is running this game? Remind me again how being able to place bets like this is actually investing and not gambling. I kinda don't see how this quantifies as investing. Since when does hedging against events count as anything, outside of a game to make money? I understand diversifying one's portfolio to own assets that go against each other depending on market conditions. But exactly what assets are owned here? Heck, what debt is owned here connected to assets?
Oh, derivatives? Hmm... ok.
