All Carry Unwinding Fast - General Collateral Hits Unprecedented 1 Basis Point

Tyler Durden's picture

While the sell off in stocks and commodities following Goldman's latest two-ply hit job had left the FX carry alone, it appears that even the funding desks have given up and are now dumping the core carry pairs, sending the JPY once again back to the intervention border. As the chart shows all FX carry pairs just got trampled, which in the perverse vicious loop that the market has become courtesy of peak leverage, means further weakness across all assets is likely imminent.

As for that other source of funding that we have been talking about for a week now: the GC-Repo rate, forget about it. General Collateral just hit an unprecedented 1 basis point!

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ak_khanna's picture

The market operators ie banksters are driving the USD index down and pumping up everything else. This process will continue till there are no long positions left in the USD index and no short positions in any of the commoditie­s, stock or currencies other than the USD.

The operators are then likely to take the long position on the dollar and short position on everything else. They would then use their money power to move the markets in the direction which would get them the maximum profit while screwing all other traders / hedge funds / investors.

The stock, commodity and currency exchanges have been reduced to gambling dens whereby the more powerful traders with deep pockets move the markets to maximize their own profits at the expense of the remaining not so powerful players. The big boys have enormous money power to move the markets in the direction which results in maximum profits for themselves­. They effectivel­y use the media to lure the other players in the market to a position where they would incur maximum loss.

The markets will fall only when the banksters have eliminated all the short positions and only they themselves have positioned themselves to profit when the market falls


When an unexpected world event catches the banksters with their pants down and the softwares they use to rig the markets go berserk beyond their control.

baby_BLYTHE's picture

Silver is below $40 :(

spartan117's picture

It's ok.  It happened at $25, $30, $35, and now $40. 

slewie the pi-rat's picture

s'ok, baby_Blythe!  the sun is in the heavens!  some nice unwinds and a some random walks, too.  the FED looks to raise rates 1/4%, who the fuk knows what will low fruit will fall?  PPT trying to rein in a gazillion algo's!  orderly markets eveywhere!  corn/gold ratio plummets!  call yer best boy friend and tell him whatcha need, here, kiddo!

treemagnet's picture

The elites want a predictable return - no QE3 or a rate hike or whatever...they'll get the memo and then swooosh.  Ride her down and back up.  Besides, that way the Fed will be begged to resume whatever the hell it was they were doing before all "this" happened, order linen and ink, hit reset, resume. 

saifstolemythesis's picture

Bank reserves to be neutralized by higher general collateral rate. This is de facto Fed exit strategy from QE2 without all of the disruption to equity markets...they hope.

SheepDog-One's picture

Exit strategy is just raise rates? That will be the biggest face-plant of all time.

StychoKiller's picture

The phrase "clothes-lined" springs readily to mind...

lolmaster's picture

Is this Aug 2007 redux? Mega arbs abound eg SLW vs SLV but it kooks like every stat arb fund just went BK

Boilermaker's picture

REITS are actually UP today...

Classic...really, beyond ridiculous.

Cdad's picture

I think that REIT trend is also starting to fall apart, boiler.  That is one very long in the tooth contrary trade that has long since stopped making sense...all things real estate considered.

Pick yer most hated and sell it on an up day, brother...or just flip SRS on a day trade.


A Man without Qualities's picture

It's funny - when I what to illustrate to people how screwed up the market is, I just point them in the direction of REITS.  There is no better indicator of how detached from reality the markets are...

My guess as to what's driving it is the banks have sold this stuff to local govt pension funds etc, and there's been background deals to protect their positions as nobody wants the bad publicity that would come if the truth came out.. 

MakeMineADouble's picture

Did anyone see this yet?


Rolling Stone magazine writer Matt Taibbi unveils unfair investment practices by wives business bigs

Read more:

Cursive's picture


Thx. Suns up 21st century Amerika very well. Send to TD's tips box. Tiabbi's memoirs should be a great read two decades from now.

treemagnet's picture

Truth is, nobody will see the bullet coming.  The MSM will blame it on a symptom of Ben's master plan. 

SheepDog-One's picture

Its fun to Google things like 'DOW crashes 777 points' all the stories from that day express their total shock and how all experts and analysts were caught completely by surprise! In other words, they never give warning of the crash at all.

treemagnet's picture

I still remember Cramer's face when his beloved financials were getting shithammered.  The tough talker finally advised people to just sell - he was all emotional, practically ready to cry - he looked like a broken shill man.

oogs66's picture

I felt like I was missing out on the laughs and had to turn on CNBC - I almost forgot how comical it is.

trav7777's picture

OMG a ONE percent selloff!!!!  RUN FOR THE HILLS.

Silver is down to FORTY dollars, gold at 1450, WTI 106...Apocalypse Unfolding.  Yen is up .84% against dollar...OMFG.

What has been a one-way trade is taking a retrace; chill the fuck out

Muir's picture

I think you guys miss Robo's sense oh humor. 

I mean he just points out the ridiculousness of it all.

slewie the pi-rat's picture

not slewie! i'll say it again, muir: if you and robo's avatars ever get a room together, slewie's in!

SMG's picture

He's not trying to be funny.  Most likely he's a paid shill, there are several others here as well.  Tentacles of our master the vampire squid.

Highrev's picture

Not even close. As Muir said, he's ridiculing the shills and their sheeple.

Or is there anyone here who really thinks he recommends LULU?




FranSix's picture

The dollar and commodities selling. And bond prices advancing. 

So if you have to sell your forex based in whatevs, there's two places to go, the Swiss Franc and the Yen.  I wonder whether holders of Swiss Francs and Yen are thinking about bullion.

slewie the pi-rat's picture

bullshit!  stewie "graceland" thomson sez, this very morn:  worried about anything?  cash out----in gold!   Apr 12, 2011 Silver Profits: Silver Profits: USD Fry Pan vs The Golden Jumping Bean! Stewart Thomson 321gold ...s

i think, ok?  you get that too from him, here?  how the hell could any mere mortal really understand this guy?  jeeeez!

FranSix's picture

Just look at everything written about the subject of the market following a script as entertainment.

A carry trade unwind is due to the fall in the U.S. discount rate(IRX) below Japan's and Switzerland's 3-month treasury bill rate.

Gold prices should be the beneficiary of the same due to bullion lease rates narrowing with the discount rate.

slewie the pi-rat's picture

you look at things however you wish, friend.  i certainly don't need yer advice as to how to look at things.  you seem to have a compulsion to "explain" everything in terms or what is really quite limited propagananda.  why not just pull the comcast cable or dish wire outa yer ass for, like, forever, and stop pretending either you or the "markets" are entertaining? 

there are no more markets, only interventions.  tyler sez it, now, in one way or another, while introducing nearly every piece, here, on zH. 

please be advised, ok, friend?

FranSix's picture

Using a narcissistic grandstanding effect must curry favour with the people around you.  Of course, a sock puppet would resort to that kind of thing.

Atchman's picture

The recent run up in oil, food and gold is just 'transitory' inflation so this pull back is inevitable, dont know what all the fuss is about - The Fed has the USA's back, nothing to worry about.  

Bastiat's picture

The Bernanke needed a demonstration of the "transitory" nature of current inflation and the strength of the UST Bond market.   As Erin said, the US is a rich country . . . so raise the debt limit, will ya!!!

Note to self's picture

Dollars to donuts says the DOW end up positive for today.  Low volume.  No positive news.  But the DOW will be up again.  WTF?

Cdad's picture

Ummmm....don't think so.  You are just seeing the afternoon magic fuzzy lifting trade brought on by the those whacky criminal institutional equity holders @ 1:31 on the Roach Motel [SPY].  However, they have been doing this crooked kind of trade for so long now that I think even the manipulation trades are worn out.

But...go long LULU if you must.  Robo will champion you.