Carry Bloodbath Resumes With Full Blown Liquidations Imminent

Tyler Durden's picture

After earlier we saw the decimation of the European currency, it is now Asia's turn where an impressive bloodbath is now raging. The AUDUSD is in freefall, having moved a massive 300 pips from yesterday's high to today's low. At under 50 pips from 0.855, the AUDUSD will likely breach 0.85 at which point the destruction at carry desks will become an epidemic, and full liquidations will soon ensue, coupled with billion dollar margin calls, forcing global asset liquidations at bulge brackets. With the carry collapse pervasive, don't look to futures to stage any miraculous Fed-inspired ramps tonight: Germany may have well called the Fed's bluff.

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M31Capital's picture

USDJPY to retest Flash Crash lows.

HFT1's picture

Those 87 XDA Sept puts look better everyday. I thought it would rally Pm and AM but hey sell baby sell. The 133 Sept XDE puts look even better, what a bunch of jackasses debating bills about the banks that put them in power.....we have seen the enemy and he is us. All i can think is i am pissed I cut the aud/jpy short at 7988, damn. Carnage is beautiful.

Nigaz's picture

Ah, don't sell the Fed so short just yet...

Crime of the Century's picture

Tyler dude, just stop it. You have Denninger arguing with himself and I think he is going to go Scanners. My popcorn isn't ready...

johngaltfla's picture

No way?! I've got to check that out.-:)

Mad Max's picture

Too funny.  I can't find him arguing with himself, but your description was good for some laughs.

Attitude_Check's picture

He has two articles in a row, one that rails against the German naked short sale ban as a liquidity nightmare, and the next that praises it as a shot against the casono gambling banksters.

 

I'm with the second point myself.  If you can't borrow it you shouldn'r "sell" it, and you shouldn't be able to "bet" that your neighbors house will burm down.

Attitude_Check's picture

He has two articles in a row, one that rails against the German naked short sale ban as a liquidity nightmare, and the next that praises it as a shot against the casono gambling banksters.

 

I'm with the second point myself.  If you can't borrow it you shouldn'r "sell" it, and you shouldn't be able to "bet" that your neighbors house will burm down.

Attitude_Check's picture

He has two articles in a row, one that rails against the German naked short sale ban as a liquidity nightmare, and the next that praises it as a shot against the casono gambling banksters.

 

I'm with the second point myself.  If you can't borrow it you shouldn'r "sell" it, and you shouldn't be able to "bet" that your neighbors house will burm down.

Hephasteus's picture

Psychotic Breaks. They aren't pretty.

johngaltfla's picture

GBP/JPY a disaster.

EUR/JPY looks like BoJ has surrendered and will let it rip.

AUD & Kiwi getting smoked.

Oh and the 10 year is creeping lower in yield.

6 month T is also dropping in yield, last I have it is 0.20%

Smells like a massive carry unwind with both the Yen and Dollar at the same time. Bad news for the US when this happens. Eventually all that funny money ends up back home...

Nigaz's picture

Hong Kong even dumping gold tonight.

(also, would have expected a screen of $67 crude somewhere here already)

Rusty_Shackleford's picture

Be nimble boys. 

This may be the last chance to get some physical gold on the cheap.

molecool's picture

Only 97% gold longs out there - sure - let's go for 99%.

johngaltfla's picture

I'd wait for the 1075-1125 area. Then again, I'm a realist about what the central banksters have to do about gold prices. They have to crush it one more time plus it is a very good technical move.

moneymutt's picture

agreed, CBers will crush anything people are using to retain a tidbit of wealth...

Rusty_Shackleford's picture

Hell.  I'm hoping for under $1000.

johngaltfla's picture

Don't see it Rusty. Absolute lowest support is $1040ish with $1064 strong. I figure a pullback to $1075 +/-6 or 7 bucks intraday and consolidation between $1150-$1225 until summer's end.

You'll have to be nimble to nab that. GLD performed better than physical today and that is bizarro land.

Rusty_Shackleford's picture

Yeah, you're probably right.  You never know though. 

 

Once chaos is unleashed...

Double down's picture

Noticed that, yesterday I apparently made something out of nothing  

jdrose1985's picture

Hell.  I'm hoping for under $1000.

Hell I'm hoping to go sub $800 / sub $8 as the SGR blows wide open to 100

Have I been hoping for too much since I sold PM's in favor of FRN's late '09 ? Methinks not...

 

 

Hephasteus's picture

Hope and $1214 will get you an ounce of gold.

Cognitive Dissonance's picture

Agreed. Once you are fully committed to the insanity, everything is on the table and all strategies MUST be implemented in order to prove to the world you are sane. Since the ONLY thing holding the world together is confidence in a system that can not maintained much longer in it's present condition, and everyone knows this deep down, the only road they can take is complete and utter insanity.

They simply cannot admit the system is insolvent because that will be the final straw that signals destruction. They are committed to the abyss, which speaks to the insanity coming down the road and around the corner. Someone needs to hit BB and the Fed with some Thorazine darts before this goes thermonuclear.

I'm not kidding in the least bit. They WILL go down with the ship and they will take everyone with them.

Double down's picture

Methinks a grassy knoll is around the corner for some of these people.  Long befoe we break someone important will.  

tip e. canoe's picture

"Someone needs to hit BB and the Fed with some Thorazine darts "  ha!  though i would personally dip the darts in a strong brew of Ayahuasca instead to get the DMT flowin...

CogDis, think you hit the core with that 1st paragraph.  watch for the gusher and make sure you don't have any leaks.

Willzyx's picture

Yup, hammer the gold right before the options expire.  Same old, same old

Itsalie's picture

Funny how americans have forgotten the action in the days following Lehman Day, this is exac replay - hedge funds' margin calls forced selling of every profitable (or not) trade, especially gold.

Folks, for your own financial and mental well being, please stand aside when Europe opens today (assuming you are not asleep or already up, depending on where you are in the US).

Cursive's picture

Lehman?  Whut?  It's different this time!  You think "they" are going to let the market go down?  You think the PPT is just going to step aside?  They wouldn't do that!  Uh, or would they?  This won't end well for the Harry Wangers of the world.

mephisto's picture

In such cases there is usually time to walk, not run, to the lifeboats. The trick is to know when is the time.

This is the time.

Rusty_Shackleford's picture

Oh didn't you hear? 

The exchange you purchased the lifeboat futures from has elected for cash settlement. 

Here's your cash. 

Good Luck. 

Damn that water looks cold.

snowball777's picture

And deep too. ;)

(apologies to anyone who doesn't know the joke that goes with this punchline)

mikla's picture

+1 HAHAHAHAHAHAAAAA!

That's some funny stuff there, I don't care who you are.

Apocalypse Now's picture

Rusty, that's some great material there.  You should be writing for the Daily Show.

Rusty_Shackleford's picture

Thanks man.  I love your stuff too.

Psquared's picture

Since we live in an FX world, with all these currencies plunging something other than the dollar must be rising? Or is everyone in the world trying to buy dollars?

Sounds like a short dollar opportunity coming soon.

HFT1's picture

Yen is a safe haven currency as well. Or seen as, I dont think anything is safe but its tradeable. Once the ECB tries to intervene the Euro will plunge and the market will Bitch slap it to parity. IF the Japanese are intervening, which I seriously doubt, they will be met with willing sellers as well. Too big to bail....

Double down's picture

SHIT did not even think about that?  Maybe the print is just the latest ASK? 

Sad Sufi's picture

Does this mean my real estate is going down?

Unemployment high, available money low.

Have I go a mortgage for you!

buzlightening's picture

 

Watch this: http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=dxy&sid=0&o_symb=dxy&x=45&y=15 

White bright death star flames out over America!! Moon shot to oblivion!! EURO! The bow breaking on the world wide TITanic paper ponzi implosion!  Taking refuge in the stern as it breaks apart is no financial life preserver!  All paper is chit and backed by thin air promises returning to it intrinsic value!  Zerooooooooooooo!

 

Cognitive Dissonance's picture

Strange how all this is going on while the CONgress is debating putting some teeth in the Financial FRAUDULENT Reform bill.

Let's see if the Fed and the banking cartel can get them to roll over and beg like they did in 2008 with the bailout bill. Stupid pet tricks anyone? Play dead until it comes alive.

http://www.youtube.com/watch?v=DalB-CvO7Qc

Alienated Serf's picture

Dollar from reserve currency to one world currency?

jdrose1985's picture

+1

Backed by convertibility to oil, gold.