Art of defusing large traders

Hope US authorities have written the script before the play. Skilled but not wise traders made record profits at the cost of others. It was a moral meltdown, all the way. Another Enron, but larger, one could say. Now these traders turn into huge weapons of mass destruction themselves. Middlemen at the heart of global financial flows turned out to be rotten. Current issues with Greece couöd be peanuts compared to recent campaign started by SEC.

Obama administration is brave to start with the surgery in the form of SEC actions against institution of former statemen and respected gamblers. Gently they start. It could be a lenghty mess. We already saw market jitters due to first accusations.

What will happen if there is a more severe story that meets the daylight? Main traders play significant roles in government bond issuing of much larger countries than Greece. Bond markets play key role in resolving the aftermath of the past crisis. Once trust becomes destabilized, paralysis in the markets could follow. Without skillful tactics of authorities, we are at the brink of the financial crisis, part two.

The real challenge is about defusing traders without causing market meltdown once their role becomes profoundly questioned by the global financial community. When exclusion of an institution takes place, it will be fast as we have seen. The script for the play should be published before actions take place. That is the art of defusing traders while ensuring operability of the global financial system.

So, what would be the ultimate trading strategy of the ultimate insider? To start with shorting traders and then even shorting US treasury bonds. Who are the ones who short traders? Traders themselves? That would be a rational move of a technically skilled trader. It makes markets efficient, doesn't it. And that would be the end of an era.

I really hope to see the script published before the play. Alternatively, nationalization of the institutions with strategies of ensuring stability could prevent the meltdown.