A Bear (and OBL) in the Wings?

CNBC’s website writing yesterday about the potential for a huge selloff in September…

So far, over $500 million in so-called put options have been purchased betting that the benchmark Standard and Poor’s 500 index will tumble anywhere from 5% to 11% in September. Some investors are even buying put options calling for 52% decline. A "put" option increases in value as the underlying stock or index falls.

To put it in perspective, a 5% drop in the Dow Jones Industrial Average would be the equivalent of 667 points. An 11% decline would equal 1,468 points. And a 52% drop? You don’t even want to know.

Add to this, the concern of Vice Admiral (ret.) John Scott Redd, who heads the government’s National Counterterrorism Center, who says that this summer’s al Qaeda "chatter" strongly resembles that of the summer of 2001. In other words, an attack may well be coming this time.

We’ve got this intelligence threat; we’re pretty certain we know what’s going on. We don’t have all the tactical details about it, [but] in some ways it’s not unlike the U.K. aviation threat last year. So we know there is a threat out there.

Looks like an "interesting" autumn coming (note refusal to use the word "fall").

Posted in Economy, Terrorism