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Central Bank Intervention Is Now Self-Defeating
While Erik Nielsen is free to provide Goldman clients with
a comfortably tabulated and bullish list of last week's events from the UK countryside, a
realistic appraisal of the key events over the past 168 hours really
boils down to one thing - central bank intervention. Whether it is
definitive SNB intervention in the Swiss franc or questionable ECB involvement
in the euro, the only catalyst that prevented an all out rout of
European currencies was outright and blatant market participation by
sovereigns and their printers. Yet something interesting happened on
the way to the stick save - decoupling. As the chart below shows, once
it became openly obvious that the SNB/ECB is intervening in the market,
the traditionally very tight correlation between the euro and US stocks
went up in a puff of ink cartridge smoke.
In their attempt to prevent a disorderly crash in European currencies, the central banks may have killed the only surefire way to push the market higher, which was tacit manipulation of the EUR pairs. This is no longer the case, and the euro may have now fully decoupled from a direct market linkage. This is certainly bad news for the correlation desks and programs that feed off the EURXXX signal to a far greater extent than any other inputs. The question becomes whether this will in turn impair momentum factors once corr desks are forced to seek fundamental/growth opportunities once again (an event that would likely result in further material market weakness), or if momentum will become market defining as an input factor of its own. In other words, will the market go up just because it is going up? With no real drivers left any more, this could easily become the case. However, just as the slow motion market meltup showed, any sustained low volume push higher always results in a sweeping plunge sooner or later. A transition to a complete momo market could just be the gating factor to an all out market wipe out in the months ahead.
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you need to draw the graph from further out. the data set is too limited. after all euro peak was last year, and the us maket peak was in april so far. there is usuall a lead and lag time to the association. this lag time is longer than the treasury lag time. so the analysis goes, currency (dollar/ bull or bear) to treasury to stocks.
I dunno. During the last couple weeks, I had a real time spy and eur/usd on my screen all day and the correlation sure seemed real. Tick for pip. The SPY never strayed for news or politics, it was all about the euro.
Now the euros "fixed" (double entendre intended") and the spy can just go back to crashing!
Seems to have 'coupled' again from friday and today's futures open.. ES_F and EURUSD
I reckon currency wars are on the horizon. One only has to look to see how the UK has been the first major economy to benefit from a weak pound. London is throbbing full of tourists, and wealthy foreigners buying up the best property.
Brits wont be doing much of europe this year because of the 20% appreciated euro (since 2007). So its cheaper for Brits to go to Turkey, or even stay in the Uk during the summer, therefore helping the UK economy even more.
Hugh Hendry made this point on CNBC recently, and compared the crappy value of greece or Spain based on the strength of the euro. Its funny because people keep talking about the weak euro...what weakness?
Its still 25% above par with the dollar, and i reckon the poor PIGS are going to have to struggle along with an overinflated euro just to appease politicial sensitivities of northern europeans.
EMU was a deathtrap for the PIGS at the first sign of crisis. Here we are. Euro-sceptics have been vindicated 100%.
Who knows how it will unfold?
Tourism is interesting. Where do the tourists going to UK come from? What is the state of their respective national economy?
What does helping the economy mean? Having nice figures as a result? What do these figures mean?
Brits are expecting in large numbers in South Africa due to the World cup.
Monetary approach is weak and reflects little.
From what Ive heard far less folks are travelling to SA than was expected. I heard a figure of about half a million off the estimates.
Not sure SA is that appealing right now even with the world cup.
More foreign tourists and property buyers is a big help to UK plc because its been so heavily reliant on financial sector tax revenues. So I dont understandf you rpoint about "nice figures". At least more revenue is more revenue, it all helps.
On the other hand, nations like Spain that really need those revenues wont get them because the euro is stupidly expensive.
More revenues in what currency?
How will less english tourists help the english airlines?
How will this unfold?
Devaluation should funnel activity toward Britain. As a counterpart, less activity on continental Europe. How could this end with more continental Europeans going to England because of its cheap currency?
Etc...
Tourism is interesting.
Good riddance...Brit tourists are a pestilence I wouldn't wish on anyone but LLoyd et al.
well some Brits are crappy tourists and expats but i dont think the Spanish will be too picky when they are lining up for their paltry unemployment cheques.
They'll spit in their Fabada just the same. The ex-pats tend to be okay...it's the hordes of teenage monsters with whom I take umbrage.
Coldcall
Benidorm still in the black?
I think Benidorm is probably one of the most depressed areas since it seemed to attract the very worst class of Brit tourists. Very cheap, so i would have thought those tourists will find somehwere way cheaper this year because the euro would make Benidorm costly.
I always preferred the Spanish cities like Malaga, which i adore.
Benidorm is a horrible place. Concrete jungle, overcrowded beaches - which aren't naturally sandy, mixed with loud "party" beachfront pubs full of stereotypical British tourists "living it up" well into their embarrasing 40'es.
You're well advised to stay away.
How many wealthy people are that dumb ? What are those property value's in the UK going to do when interest rates go up ?
bang on my man - bang on!!!
Short of my going down to Billy Bob's Used Car Lot and haggling over a $50 spread in the price of a 1995 Toyota Corolla, is there anything regarding money/credit in this goddam country that the Big Guys of Wall Street don't have a thumb on the scale of? I'm tired of this and will do everything within my power not to play. I refuse to feed the beast.... and I don't expect any help from so-called independent thinkers to be found even here at ZH. You folks can't complain about how badly you are treated by the Banks (and they are not even real banks) and continue to hold even one share of even one stock (which, without a dividend is a share of nothing), have one dollar in a "retirement" account, or have a checking account with a bank that has branches outside its home State. Yeah, asking a lot? Not really. It should not be necessary for me to hold a doctorate in economics to make sound investments. When the terminology used rises to a level of having to use words created in the last 10 years there is something wrong with the "investment" vehicle. When the pages of disclaimer exceed the number of pages describing the offering, there is something wrong with the "investment".
i despise money and hate banks. More folks on utube want to take action, the gulf oil fiasco may be the straw that woke the sleeping giant. The masses are awakening at last
If by "money" you meant fiat credit, and by "banks" you meant credit expanders, I dislike these demons, as well.
Here's your sleeping masses. They like money...
http://www.youtube.com/watch?v=sZHCVyllnck
Harvey! Nice clip. Not my favorite movie but I find myself drawn to watch it when I trip over it during channel flipping. Yeah, I have a TV and I watch it. One has to know one's adversary in order to keep the edge. I watch CNBC as well. Not religiously, but there is enough there to help me keep a balance in news. Funny how ZH folks trash CNBC yet clips keep showing up. Go figger.
I go so far as to watch Infomania every week as part of my "research."
Oddly, I can totally watch mainstream talking heads on Bloomberg, MSN, Fox, etc and sort of feel like I just watching another (non)reality show. However, I can't stomach Democracy Now or NPR because these are too much like the idiots I personally know.
I'm starting to despise the propoganda arm of GE/Obama. I'm acutally glad network news ratings are low.
Okay Merehuman. I bet you don't despise the things "money" buys you. "The straw that woke the sleeping giant"? (You mean the "camel's back"). Dude, go back to watching Michael Moore videos or your flower girl 60's garbage.
Does your ego feel bigger now Pedro? Your point of view is much more enlightened and informed than his.
You have provided Pedro valuable information if he can receive it. There is the initial sting of the message landing, then understanding that all of us are doing the best we can with the lessons we have received, up to this moment in time. No need to internalize shame, just understand it for what it is, take the gift, and move on.
Thanks pan.
Exactly why I stopped blaming the big boyz. Just looking around me, I see much of the problem.
You rock.
rocky ,, a yes and a yes .. carry on lol
RockyRacoon
"It should not be necessary for me to hold a doctorate in economics to make sound investments. When the terminology used rises to a level of having to use words created in the last 10 years there is something wrong with the "investment" vehicle."
Look at it this way we have a specialized class to govern us, "Politicians". Politicians have a specialized class " staffers" to do the heavy lifting for them.
We have a specialized class of "Lawyers" to handle our intereactions with government. They have a specialized class of "Paralegals" who act as intermediaries between Us and Them.
Now doctors have two sepcialized classes "Nurse Practitioner" and" Physician Assistant" as a layer of insulation between Us and Them.
We have accepted all these levels which divorce us from our needs, Government/Law/Medical. Why would investment be any different?
The answer lies in the one class of intermediary you neglected to mention: priest.
"Look at it this way we have a specialized class to govern us, "Politicians". Politicians have a specialized class " staffers" to do the heavy lifting for them."
More accurately, we are governed by congressional staffers. They write laws that congress-critters pass without reading. Think of politicians as the way staffers are selected to govern us.
"Short of my going down to Billy Bob's Used Car Lot and haggling over a $50 spread in the price of a 1995 Toyota Corolla, is there anything regarding money/credit in this goddam country that the Big Guys of Wall Street don't have a thumb on the scale of? "
Sorry Rocky, but all my credit documents are sent right to Goldman, Sachs & Co. 200 West Street, 29th Floor, New York, NY 10282 where they are mixed with a few Fannie Maes and a few Freddie Macs and "distributed". You can run, but you can't hide.
I can... and I have.
"You folks can't complain about how badly you are treated by the Banks (and they are not even real banks) and continue to hold even one share of even one stock (which, without a dividend is a share of nothing), have one dollar in a "retirement" account, or have a checking account with a bank that has branches outside its home State."
Check, check, and check.
Easy for you. Banks wont let raccoons open a checking acct anyway!
Well, you have a point. But when they start paying interest on dead cats and garbage I'll be there! Hey, wait! They do! (Darts off with cartoon exit sound effect....)
hey rock, i read this recently and i am darned to find it again. ten yrs ago wall st had a 14% stake in the GDP. today the figure is 83%. i cant verify the #. maybe others have discussed it. but in response to the post. no. it's a bigger problem than most let on. blood is in the water and the shark tummys are never full. heed the caution that is whispered.
Racoon face, please don't unleash your anger and frustration on us. Most of here hate big banks and are aware of their implications, constant market manipulation and corruption. We just don't dwell on it all day every day.
Read the cache or follow the sites postings for a few months before you go running your pie hole.
I was watching this between 9:00-9:30 pm est and saw somthing unfold...plain as day...CHF & Gold sold off to prop the AUD/NZD/CAD/EUR/ECT...
http://realitycheck.no-ip.info/media/Images/5-23-2010%2012-03-58%20PM.png
http://realitycheck.no-ip.info/media/Images/5-23-2010%2012-14-31%20PM.png
JPY TRIED to do something as well but it had fail wrote all over it...
Wonder who will fire the next intervention shot across the Global Chess Games bow?
HOW EXCESSIVE GOVERNMENT KILLED ANCIENT ROME
http://www.cato.org/pubs/journal/cjv14n2-7.html
Don't fear, because they fear you. The play book is in full view. We are reading future events and they are shitting their pants.
Another war is imminent. Detraction is the key in creating passage to one world currency and a new global financial system. Basel II has been told, many sheeple tend to ignore.
http://www.bis.org/publ/bcbsca.htm
Heed the warning
Ancient Rome was a series of ideas.. not a continuation of the founding of Romulus and Remus. Big government was a natural consequence of Rome after Actium , that is the end of the Republic and growth of an empire. An empire that as grew through advances in civilization , the need of war and taxation. It is wrong to say Rome fell because of big government when in truth Rome fell victim to attempting to take mankind where mankind had never been before.. under the ideas of Christ and humanity to man.
As far as Basel goes any one world currency is going to fail and is not possible. What I read from Basel is more idealist than substance. More dreams of a better world.
if you want to know what people are upset about at in time in Western history just see how they compared themselves to Rome and its demise..there a variou reasons for their demise given: loose sexual mores, softness/laziness/spoliedness, slavery, the list goes on...now its their monetary policy or in the case of your comment, too big of government...so I guess that's what we are upset about now..
There is nothing more satisfying than spending a lazy Sunday fondling your coins.
Sure there is.
<Fondles 100oz bar, smiling>
My dear, that would be called stroking.
Nice-ly done.
Whaszup with the icon? We took a poll and determinded the the smoking lady was the bomb. Who is the bald headed guy, and what has he done with the lady?
Isn't is obvious?She has been abducted by the dark lord.I say we take her back!
Who's with me?
All in!
Feels good to be rescued.
My ego? Perhaps, but I generally stick to something cylindrical for that (buh-dum-bump pishh).
When the mood strikes me I roll around naked on my silver! The bars hurt and the coins stick to you but it's all good fun!!!
Sounds eerily like King Midas and we know how that turned out. It is a fool who thinks his gold will make him rich or happy.
Better to be a rich fool in a folk story that has transcended generations than a poor fool without happiness or wealth.
Well, it appears that you've been there, done that.....next time call for reinforcements and we can all have some good clean fun!
He doesn't look a thing like Jesus but he talks like a gentleman, like you imagined when you were young.
Tune
I wonder if "they" undertand how things are connected. I doubt Geithner does, but others in Treasury/Fed must understand.
What do "they" think they value of the Euro should be? Looking at the macro backdrop any sane person would see that a much lower Euro is exaclty what the EU desperatly needs. Without that boost they stand no chance.
Yet they roll up their sleeves and spend money in support of the Euro. I am sure that Tim G will stand solidly behind this when he goes to Bonn this week. To me it is like a bad joke. Not funny.
Agreed. believe it or not, Spanish property is still at 2007 bubble prices for Brits because of the pricey euro. I;ve tried explaining this to Brits looking to buy in Spain and they are shocked that they would be spending the same in pounds as they would have in the halcyon days of 2007.
But NO! The euro must be strong at all costs!!! :-) The nutters are running the asylum.
Hi Bruce, I have to say, love your writing and your wit! Don't you think this is a controlled devaluation of the EURO? If they allowed the real most likely value of .85 near term rates would explode. Is that not true?
Your comparing apples to oranges.... I happen to like apples better than oranges, oranges better than pairs and pairs better than apples....
What that means is the holy rule of trading.... "Once a pattern is established, it will change.....
Best regards,
Econolicious
So use pears trading then.
Or pairs, an apple and a pear, and a pair of oraganes, and one pair.
I see you your kiwis and I call.
2 pears and some grapes.
"Jacks, Queens and Aces, their faces in wine, do lord deliver our kind" from Boys in the Barroom song by Robert Hunter former writer for the Dead
http://new.music.yahoo.com/robert-hunter/tracks/boys-in-the-barroom--623216
Implicit simplicit
It has come to this now. Comparing things to Oranganes.
Damn you, damn you to hell!
Since when has central bank intervention not been self-defeating? Central banks have tried to prop-up/devalue currencies for decades. The market always wins.
But why must it be after every available drop of blood has been spilt?
But why must it be after every available drop of blood has been spilt?
Because they know that the consequences of their failure are the repudiation of the central planning, government-controlled central bank economy in a big, public, and very very messy way. They will do everything they can to hang on, even long after they know they're doomed. THAT is why I am a gold bug.
Bingo.
MERKEL'S MAGICAL MYSTERY EURO:
http://williambanzai7.blogspot.com/2010/05/merkels-magical-mystery-euro....
I don't have any faith in Merkel, don't trust Merkel. How is it that it was West German money, and success through much hard work, after the war that saw a reunification between West and East actually happen, but only to have a young east german female communist party member , one who is childless, who runs on a family values platform, run the most powerful German state ever?
I think the dollar has topped and all other currencies have bottomed.
The long dollar/short euro trade could come unwound with lighting speed.
Especially if margin calls continue to flow in.
Check these out:
http://clearstation.etrade.com/cgi-bin/bbs?post_id=9309374
Disagreeing views make markets. I think the Euro is in dead cat bounce and will soon continue its plummet.
Since when did trading on dead cats become de rigueur?
Isn't that the whole point? Trade, trade, trade. Doesn't anybody have a job that creates something useful any more? I'll sit in the bleachers, eat my popcorn, and watch all you guys scrum for dead cats.
Robo, love your writing as well! Seems like every time I write a response or a question I am forced to offer that by the shear quality of writing here on ZH!
I offer this, With the dollar nearing the resistance of 92 and the EURO not near the long term par value wouldn't you look at another currency in order to value the dollar at the level a.k.a the Swiss Franc?
we're all forex traders now.
We always were.
OK MsCreant, your avatar is weirding me out. Any chance you can change it?
I said that in a comment above /\. Good call on the inflation video.
Thanks. I can't take the avatar anymore, it just doesn't fit our msCreant..
Here is another great video
http://www.youtube.com/watch?v=thSTpGnWEAs&feature=player_embedded#!
Great video!! LOL
It's funny watching people try to make lies real. Always has been.
See above...we are going to take her back!
I hope so. Its been a very weird weekend. The Austrolorps started talking to me yesterday. Everytime I'd walk by this particular one, it said uh oh, clear as a bell.
I kid you not...
If I laid an egg every day, I'd be saying uh-oh all the time too.
I don't know why she keeps changing it and then people trying to get her to change it back.
Looks like we are going to have to send her some cash...
MsCreant is just so smart and funny. Plus she doesn't make you look at a strangers vagina while your talking to her. Anything over that is just gravy. But I think her hubby should make her a gold chain thong and a tin foil bra.
I'll tell him. Now you have changed your avatar. Is this a mouth? If so who's mouth? If I have it wrong, then do tell us more about your own experiment...
He looks like he is tripping on acid.
http://www.youtube.com/watch?v=9PR_rzF8ofw
couldn't resist.. I swear, I tried. lol
I am sure Lloyd agrees!
Centrals bank role is to take from the poor to give to the rich. How is that self defeating.?
Feeling bullish?
The Dow Industrials still are, up 71 points at 10,138.75.
So are the folks at MKM Partners, as they write in a note today. After an 80% run-up in the S&P 500, it was not surprising to see some backing away from equities — certainly, it wasn’t a “bolt from the blue,” though it may feel that way, Michael Darda, MKM’s chief economist, writes.
Based on the fact that the S&P’s forward price-to-earnings multiple on “normalized earnings is below what it was in October of 1990 and November of 1987, Darda believes that “There is more value in equities today — if one can deal with the volatility — than there is in investment grade credits, Treasuries, TIPS, commodities, and especially gold.
Indeed, the prospects for equities, in Darda’s view, sound like some kind of massive new secular bull market for stocks:
After a 10-year run of the worst returns since the 1931-1941, stocks are probably poised to do better than most believe during the coming five or 10 years. At 12.2x the five-year average for forward estimates of $87.6, the S&P 500 has an earnings yield of 8.2% against investment grade corporate bonds trading for about 6% and Treasuries yielding 3.2%. If inflation averages 1.9% over the next decade (as the inflation breakeven spreads suggest), long-term TIPS would return about 3.2% along with Treasuries. General obligation municipal bonds are trading at tax-equivalent yields of 7.4%, also below the earnings yield on equities, but not by much. This pretty much leaves real estate and commodities. With China slowing, however, the outlook for commodities is somewhat nuanced.
And gold? It’s run on inflation fears has gotten out of hand:
Gold, which has become the asset class (and global currency) of choice, is unattractive in our view. Indeed, on a purchasing power parity basis (which would equilibrate gold’s purchasing power with the rise in prices since 1918), gold should be about $460/oz., which means there is already a tremendous amount of pent up inflation (or end of the world risk) priced into the yellow metal. To put this in perspective, gold is three standard deviations above purchasing power parity, the highest ever outside of the 1979-1981 period.
http://blogs.barrons.com/stockstowatchtoday/2010/05/21/three-cheers-for-equities-says-mkm/tab/print/
.....ugh....stopped reading when the term " normalized earnings " was used. Earnings cannot be normalized when propped by a Mount Whitney of mispriced hidden assets.
It's just amazing how we are told we should buy gold after it has risen vertically like a rocket. Now that it has dropped 70 points, we are told that it is unattractive. What gives?
Apparently they've discovered that past performance actually is indicative of future results.
I saw the televised interview on Bloomberg as well... I can't for the life of me understand how he can take this stance while closing his eyes to sovereign debt issues and government "stimulus" support/data manipulation. The old rules don't apply anymore.
And what happens to this argument if, instead of arbitrarily picking a starting point of after 1918, you count 1916's 7.9% inflation, 1917's 17.4% inflation and 1918's 18.0%? It's a curious choice to simply chop off half of an inflationary period.
Fantastic currency moves!
When the central banks are raining down money from the sky, it's our collective responsibility (even obligation) to run outside and collect as much of it as possible.
Happy trading everyone!
This washout has all the markings of forced liquidation. Many Hedge funds lack the skill to use paired trades, carry-trades, and still use excessive leverage. These funds are being raped by margin clerks. Banks and BD's are ready to hit the sell-button to protect themselves. This sell-off screams of fear. I think a rally is on. Central bankers will back stop the currency.
most astute and quite accuratel the use of pair trades goes one step beyond the "mine" or "yours" that the ex-prop traders of banks who are now employed on hedge fund execution desks are able to transact. The big picture will always be the sum of the little pictures and the ants/termites are well and truly feasting on the crumbs and the house.
I think we already have a new currency. Its called food stamps.
disclaimer: I am not a catholic (lapsed or active) but here is the demand for the new currency.
http://www.americamagazine.org/blog/entry.cfm?entry_id=2859
screw SDR's and most people can't afford or give change for gold. 40 million americans on food stamps? well, lets put them in a CDO squared and leverage that just 8 times to cover the whole of america and deal with the reality of not enough money to buy food for the poorest in society because we have paid it all to spin doctors, legislators and bank gamesters.
In the classic reference on Weimar German Inflation: The Economics of Inflation - A Study of Currency Depreciation in Post War Germany: Costantino Bresciani - Turroni writes of the decoupling of the stock market as the CONfidence game becomes obvious. If this is what is happening then we have a massive flow situation that is occuring and a really massive flow situation that is about to occur.
ForEx controls were placed in Germany at that time after those who could got into dollars (gold backed). The rest scurried for hard assets, any hard assets, toilet seats, paper, spitoons, whatever. Children accompanied fathers to work to run home with the day's pay so the wife could rush out and get something for it before its value evaporated. More and more time was spent in this focus on getting value and more and more of the country's focus became getting enough paper to make the currency for the next day.
In the age of electrons, we don't have the later issue, but the monetary dance we will still experience.
Many overlook the supporting 'black market' currencies when discussing the hyperinflation of Weimar and Zimbabwe, but where will it fly when it is the dollar's turn?
CAD?! CHF?! (still fiat, but less ugly than we?)
When it's the dollars turn it will fly to gold. Because when it's the dollars turn, it will become obvious to everyone who can fog a mirror that ALL fiat money is not worth the paper it's printed on no matter it's color or what monarch's head is pictured on it.
ya by the time it hits the dollar its all over anyways. Forget paper money.
Hi taraxis,
Part of me says it didn't have to be this way. They didn't need to make these choices. The other part of me says this is inevitable and history, it always happens this way.
It is all worthless now for sure. Trust is gone. The only question that remains is should we have ever placed it there in the first place? If so, we need to do something different this time.
LB, How do you balance your viewpoint with the expected market run-up in the posts directly above yours. I am just trying to understand.
Which is why I agree with SuddenDebt's post below.
We are all in a sort of "prisoner's dilema."
Something like this from Is the Fed an Inflation Fighter or Creator? - Frank Shostak - Mises Daily http://mises.org/daily/1947#ixzz0omKjXyPh
"However, one could argue that a rise in inflationary expectations will cause the lowering of the demand for money...."I think the S&P will make a giant jump up in the comming weeks. I went long on friday and covered most of my puts.
___
Yeap.
Odds favor this.
Caveat: breakout of hostilities with NK, Iran, Pakistan/India....
(Never a sure thing, that's what makes it interesting.)
I would be grateful for an explanation. The sovereigns print up a boatload of confetti money and "overvalue" their currency in relation to equities and therefore, equities are going to chase the overvalued currency to the moon? I am not being sarcastic. Just honestly trying to understand.
+1
My best reply is underneath your reply to LeBalance.
Mises has been arguing this point for some time, i.e. could you "force" a populace/market/economy to buy with the "credible threat" of inflation.
But acedemia aside, isn't easier to think of a stock clerk at a supermarket with a price gun just going around and repricing all canned goods?
Maybe the concept of a "basket of goods" would help.
Again, not to get to acedemic, because it really isn't needed, we all see this every single day.
Think of what a basket of stocks (a 100 shares of this and that in the 40s or 50s etc) could have been traded for in the same time period you held it.
What "basket" of goods (eggs, lumber, a tire) could you have gotten for the basket of stocks?
You'll find that except for two time periods (late 20s and early 2000s) what you would have gotten in 1935 pretty much the same stuff in trade that you could have gotten in 1950, 1951, 1952...
Guess you could quibble that tires where better in 1952 than 35 or something like that, but the point holds.
The DOW going up 200 points or down 500 is neither "good" or "bad."
And from what I can tell, all we are seeing is just the markets' (and our's) very confused attempt to price itself in terms of something other than itself.
Anyways, that's how I see it.
Is that like "A tisket, a tasket, beheaded banksters noggins in a basket".
I will take a stab at an explanation. History has shown, even in Zimbabwe, that during high inflation/hyper-inflation, the stock market takes off. One theory being that the corporations will maintain their profit margins at all costs and will reprice their goods to keep pace with inflation. If Marc Faber and others like him are correct, we should see high commodities prices and high stock prices....wait, this is what has been happening....gold going up and stocks "over-inflated" hummmmm.
MM et. al. I do not know whether the air continues to enter the HFT arena. Since the major player is FED pumping I think it might continue to inflate. My comment was directed as sort of an "for your info" type of thing. On the whole, if the PTB wish the market to run up, then it will. Flowers will sprout from oil slicks and CNBC vomit will be taken to the FED and exchanged for paper gold. We are all well aware of 1984. It is here and it has always been here. It is the curse of knowing. It is a paradox, not intended to drive you insane, but intended to make you grow. Its like the existence of time, or good and evil. Its a puzzle. Solve it and laugh alot.
As Sudden Debt indicated "breath in the futility." A good insight.
nice read but the aud/jpy has a 94% correlation and the eur/usd is around 73% since Jan 31st. So I did say Thursday not to use eur/usd anymore for correlation the desk have been onto the aud/jpy for a while, just because I would think they are smarter than me....
They are panning for gold. Panning with currentseas, equities (they lobbed trillions out of equities recently). It is disgusting. It is so dark and malicious, this bleeding of the middle calsses of the world.
Euro already under pressure again right off the fx open.
Try USD/JPY vs ES, more of heads up than EURO
Ewwww! The new ass ay ! Rolling in and stroking your metals
The March 2009 lows won't hold.
Updated DOW daily and weekly charts:
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1