Disclaimer: This is a conspiracy theory. As such, please read it with massive doses of salt. However, it does interest me a lot, and so, I'm blogging about it.
Story Arc #1
Someone is betting big that some massive catastrophe is going to happen by 21 Sept 2007. I'm not very familiar with the whole field of put/call options but it's interesting to read other's comments on it. And based on what I've read, I have gathered that someone is betting that the SPX 700 index will lose between 30%-50% of it's current value by 21/Sept. If it does, they stand to profit at least US$ 4.5 billion but if it doesn't, they stand to lose more than US$ 1 billion.
It seems to be a normal thing to bet on the volatility of a particular stock. But in order for the index to crash, it would mean that the whole market would probably have to crash. And the fact that nobody seems to know who is behind these put options, just adds to the air of mystery to this event. It could be that someone somewhere knows that something is about to happen. The last time something like this happened was prior to 9/11 when people were betting heavily on the stocks of certain airlines to crash, which they did after 9/11. That's why, this one is being called the "Bin Laden" options/trades.
There are some theories as to things that may happen to cause such a market crash:
- A massive terror attack before 9/21.
- China dumping all it's US currency after losing billions due to bad loans.
There are also conspiracy theories that say that the US government has ordered the media to sell the people the idea of a war with Iran, starting this week. The theories also state that the troops currently floating off the cost of Iran are being spun up into readiness. The theories also claim that plans are already in place to blitz Iran within 3 days, hitting more than 1,200 strategic targets.
Story Arc #3
The IAEA has been making a lot of very loud noises in recent days. They have generally gone out of their way to stress that there is no evidence that Iran is building a nuclear weapon. The last time I had heard the IAEA being so loud was on the subject of Iraq building WMDs. So, it is fairly ominous that the IAEA is once again, making their case heard.
I'm just making all of this up. This is a conspiracy theory after all. Some imagination is called for. On the anniversary of the 9/11 attacks, some massive terror attack will be launched on US soil. Maybe, these attacks will use some sort of nuclear weapon. The weapons will be traced to Iran. This will be used by the US administration to justify a pre-emptive strike. Then, all hell will break loose.
You draw your own conclusions. Personally, I hope that none of this is real. But the fact that someone is betting more than US$ 1 billion on something going terrible wrong in the US, worries me. And the fact that 9/11 is just a week away makes this all very surreal.