Archive - Oct 11, 2010

Ben Bernanke has privatized the upside of the global stock, bond, currency, commodity, energy, and precious metals markets, and socialized the downside, with his much publicized move towards quantitative easing. While former Treasury Secretary Hank Paulsen spoke about a bazooka in his pocket, Helicopter Ben is hinting that he has a 100 megaton thermo nuclear weapon.

• Asian currency tensions bubble as dollar falls.
• Asian shares rise on QE expectations; Yen hits 15-year high against dollar.
• China fends off pressure on Yuan, keeps gradual gain.
• Euro above $1.40 mark again after poor jobs data.
• Freeze on foreclosures could undermine recovery in housing market.
• Global finance chiefs fail to resolve exchange-rate spat as G-20 splinters.
• IMF can give Greece more time to repay loan if needed, Strauss-Kahn says.

Recent rumors of a hike in the Chinese deposit reserve ratio, were finally proven true, after earlier today China suddenly, and unexpectedly, hiked the deposit reserve ratio by 0.5% for 6 big banks for two months, to a level of 17.5%. As this is a modest liquidity-withdrawal move, it is a substitute to an overall rate hike which has also been rumored to be in the works. Of course, with the US about to embark on a "rate-lowering" equivalent move via more QE 2, it would be silly to believe China would actually follow through with this at this point, and put itself at a disadvantage. As such this modest stop gap overheating-prevention move makes sense. Whether it will be a catalyst to reverse the recent move higher in domestic Chinese stock market remains to be seen.

Although the Federal Reserve and therefore the fixed-income markets are closed for Columbus Day, we have the two Vice Chairmen, of the FOMC and the Board of Governors, both speaking today…

After a bad opening, there is hope for the middle game. After a bad middle game, there is hope for the endgame. But once you are in the endgame, the moment of truth has arrived. - Edmar Mednis (Grandmaster)

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 11/10/10

This daily report is designed to help traders find opportunities to trade against this group. The premise is very simple we are looking for 66% of retail traders to be trading either long or short a currency pair, we then look for opportunities to fade (trade against) this group. For example if 72.99% of traders are long the USD/CHF we look for opportunities to short that pair. The pairs that we feel offer the highest opportunity for success are described in the Shortand Long Zones.

To the tick tock and the market doesn't stop, as even though the jobs report continued to color the economy bad, the shit awful numbers signal that Benny B is going to come in and sex the market up with QE2, so rally on my friends, rally fucking on (and yes, the rally makes about as much sense as Money McBags' using a shitacular 1990s song for an extended metaphor, but alas, not every Money McBags analogy can end with Taylor Rain going 5-hole, or can it?).