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Crude Plunges

Tyler Durden's picture


Has the time, when the end of QE is ultimately priced in, finally arrived? Following another steep sell off in silver, matched only by the decimation in Chinese stocks, it appears margin calls have finally come to crude, which just plunged by $2 in seconds. And if the answer is yes, is this the expected rotation from the inflationary to deflationary mood which is so very critical for Bernanke to launch his third and final QEasing episode? Expect a major spike in real vol (not VIX) here if we have finally come to the inflection point.


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Tue, 05/03/2011 - 14:15 | 1235047 kengland
kengland's picture

Long treasuries and short with SMN as of FRI. I beleive Rosenberg went long, capitulated, last Wed. Eignhorn followed suit.

The top is here

Tue, 05/03/2011 - 14:16 | 1235076 nope-1004
nope-1004's picture

is this the expected rotation from the inflationary to deflationary mood which is so very critical for Bernanke to launch his third and final QEasing episode?


QE^n is coming.  Has to.  No way out, so this 'deflation' is part of the master plan.


Tue, 05/03/2011 - 14:35 | 1235192 j0nx
j0nx's picture

Careful. Mention the 'D' word around here and watch the hedgers go apeshit.

Tue, 05/03/2011 - 14:45 | 1235227 What does it al...
What does it all mean's picture

This chart is skewed.  CL didn't drop NEARLY as much as Silver!  

ZH, stop lying!  Silver dropped almost 20%, CL went from 114 to 111.

Tue, 05/03/2011 - 15:04 | 1235320 Hephasteus
Hephasteus's picture

Didn't know that. I don't think people are even watching it. It's kind of like the royal wedding of things going on in the financial market.

Tue, 05/03/2011 - 15:07 | 1235335 What does it al...
What does it all mean's picture

The chart is overlaying them on scale that is not relevant to the drop.  Very misleading...  Silver is now 40 handle.  I am actually not involved and really just angry at ZH for all the disinformation, people got hurt, and most likely big guys who DONT CARE about margins benefitted.  What a joke.

Tue, 05/03/2011 - 16:11 | 1235604 Sudden Debt
Sudden Debt's picture

I'm down 46000$ on this drop, but still up 53000$. I don't really care about this drop. I only started to notice it 3 to 4$ ago, and I'm like immune for it.

What does bug me is morons like you turning this site into A YAHOO FINANCE HILL BILLY GROUND!




Tue, 05/03/2011 - 16:54 | 1235726 What does it al...
What does it all mean's picture

You could have kept that 46,000, by selling near 48 and buy it now.  But hey, buy and hope.

BTW, it is just factual that the chart is misleading?  Bloomberg GP function allow you manipulate the charts and that is what this is.  Do you even know what you are talking about?  At a minimum, try google finance chart or if you are truly retail.  

The fact is that this chart is distorted ON purpose!  

Tue, 05/03/2011 - 16:55 | 1235735 Hephasteus
Hephasteus's picture

Bullshit. When gold drops they simply stretch the spread to all hell. There is no diving out and getting back in. If you guys would take some losses and not play the gumby over spot game people wouldn't stick to it like super glue. You can't even manipulate people's actions any more. You teach them to get out and stay out. You can't go and pick up any damn silver for 44 bucks right now. You're going to be paying 50 for it just like you were a week ago or you're going to be ordering physical and spending hours trying to pester whoever said they sold it to you to cough it up.

The silvers just fucking gone.

Tue, 05/03/2011 - 17:04 | 1235746 What does it al...
What does it all mean's picture

Huh, you are talking about the physical market.  (bid/ask spread wide enough to drive a truck through.)  I am talking about the SI future market, which is what spot is based on. And where the margin was recently raised for the third time.  

So, you are clearly wrong and naive.   Sell high and buy low clearly goes counter to your believe system.  

I guess you like to buy high, buy low, buy lower, and buy lowest... 

Good luck.


Tue, 05/03/2011 - 16:36 | 1235683 earnyermoney
earnyermoney's picture

You should direct your anger at the fascists running this country. Disinformation? People getting hurt? Not one fascists employee of a TBTF bank or their fascist enablers within the federal govenment have been indicted for rampant financial fraud.

Tue, 05/03/2011 - 16:52 | 1235731 What does it al...
What does it all mean's picture

Don't get me wrong.  I am upset with the govt, banks, Timmy G, Ben... and just about everybody but my friends and family.  But call a spade a spade...  Just be fair!

Tue, 05/03/2011 - 15:18 | 1235342 Ahmeexnal
Ahmeexnal's picture

Great time to buy physical PM's at great discount.

Silver at 40, than you JPMoron!!

Let the bankers play with they later turn to paupers!

And the USD is plunging next to the soaring CHF:

Can you hear the Austrian banks go *KA-BOOM*?



Tue, 05/03/2011 - 15:15 | 1235370 goldfish1
goldfish1's picture

Silver top 48.55



Tue, 05/03/2011 - 15:35 | 1235395 What does it al...
What does it all mean's picture

???  LMAO.

You are clearly retail... SLV doesn't count!

SI Future was at 49.79, now 40.85.  Get the pricing data right! (Both April/May/June are trading tight.)  

Come on, at least the physical folk has some point, they can take that metal and swallow it when the mobs come.  SLV, is totally fraudulent!

Tue, 05/03/2011 - 15:40 | 1235467 Id fight Gandhi
Id fight Gandhi's picture

the Only reason for silver to fall down is an unprecedented three margin hikes in a week on varying global holidays too. If it really were a major issue, gold would have sold off too. It didnt.

Tue, 05/03/2011 - 17:06 | 1235760 What does it al...
What does it all mean's picture

Which is part of the game.  Exchange change margins.

Tue, 05/03/2011 - 15:45 | 1235506 Burnbright
Burnbright's picture

I dont think it really counts, they hit those number in asia over night when every market was closed. Price was between 48-49 as the high.

Tue, 05/03/2011 - 15:54 | 1235543 dark pools of soros
dark pools of soros's picture

I was able to sell some bars locally @ $48 last week..  he doesn't gouge either way so might be able to grab them back this week for a decent gain



Tue, 05/03/2011 - 16:59 | 1235736 What does it al...
What does it all mean's picture

NO!  learn your micro market sturcture.  SI future was trading in NY hours.  SLV is ETF and doesn't trade until 4am to 8pm.  

SI was entirely tradeable!  Even at the lower margin (pre the three reductions.)

Come on, if you are in this, you should know that the CME routinely raise margins... which is what a lot of ppl on this blog was saying.  Bubble was going to burst... you just didn't listen...



Tue, 05/03/2011 - 14:40 | 1235217 SheepDog-One
SheepDog-One's picture

If 'deflation' is oil at $111, we're fuked.

Tue, 05/03/2011 - 15:21 | 1235402 Pepe
Pepe's picture

master manipu-flation

Tue, 05/03/2011 - 14:21 | 1235104 Gubbmint Cheese
Gubbmint Cheese's picture

Rosie didn't go "long" - but acknowledged it could go higher.

Big Diff.

Tue, 05/03/2011 - 14:29 | 1235145 wang
wang's picture

correct he didn't go long

(probably because he has nothing left to go long with)

Tue, 05/03/2011 - 14:32 | 1235156 kengland
kengland's picture


Well, he didn't say he was buying but the implication in his statement is that he understands why folks would. Either way, that is capitulation from the ober bear.

Tue, 05/03/2011 - 14:54 | 1235280 Gubbmint Cheese
Gubbmint Cheese's picture

apparently you haven't read Rosie's stuff. Long utilities, long bonds (of all durations, but was eyeing longer maturities back in April 2010), long gold/silver..

so the advice has been just fine.

Tue, 05/03/2011 - 14:32 | 1235147 Hugh G Rection
Hugh G Rection's picture

This just in....


Peace breaks out in MENA region, 0bama announces new liberal domestic drilling policy, and Federal Reserve announces they will raise interest rates to instill confidence in the dollar.



Tue, 05/03/2011 - 14:47 | 1235237 6 String
6 String's picture

No QE3 for a bit means short everything, included in this is everything, EVERYthing, in Tepper's portfolio.

Remember, it is only the QE's that has brought everything up. The reverse will be true.


Tue, 05/03/2011 - 15:35 | 1235459 Boston
Boston's picture

Long treasuries

Exactly.  And well after the deflation sets in (this is just the beginning), look for hints from Bernanke that the withdrawl of QE is the "cause" of all this turmoil.  Look for confirmation pieces from Hilsenrath in the WSJ.  And then wait for the big QE3 speech from Ben.

Then exit Treasury longs and wait for technical confirmation to short....big time.




Tue, 05/03/2011 - 14:14 | 1235061 101 years and c...
101 years and counting's picture

tbtf just got the api and eia inventory reports.

Tue, 05/03/2011 - 14:17 | 1235063 Ancona
Ancona's picture

QE can't end. Period.

This "recovery" is anything but organic. When the fed removes the extra liquidity, the run on hte markets will begin, and we can't have that now can we?

Tue, 05/03/2011 - 14:21 | 1235106 Cassandra Syndrome
Cassandra Syndrome's picture

Exactly, if it does end, it resets back to the purpose it was first created for. The system is a monster that has built itself to a point were if you stop feeding it, it will collapse. Worse still, no one has a clue how the system works.

Tue, 05/03/2011 - 14:33 | 1235172 Holodomor2012
Holodomor2012's picture

It actually reached that point the moment they issued their first FRN at interest.  Principle in circulation will always be less than the principle plus interest owed back. 

P < P + I

Tue, 05/03/2011 - 15:15 | 1235361 Dr. No
Dr. No's picture

The FED mission of recovery is secondary to there misson of backstopping the biggest banks.  You are mistaken if you think the FEDs actions are to maintain a recovery.  They will try to engineer a recovery if it is in the best interest of the big banks.

Tue, 05/03/2011 - 17:47 | 1235896 Bicycle Repairman
Bicycle Repairman's picture

The Bernank will let everything collapse enough until all the critics STFU about QE.  It'll take a month, two months, tops.  Then QE resumes.

Tue, 05/03/2011 - 14:17 | 1235067 tekhneek
tekhneek's picture

Oh great. Too bad gasoline prices won't change.


Tue, 05/03/2011 - 14:33 | 1235177 CPL
CPL's picture

Just wait, we haven't hit the first summer time long weekend yet.  You know how this game works.

Tue, 05/03/2011 - 14:44 | 1235238 101 years and c...
101 years and counting's picture

rumor is, AAPL is working on an iCar that will run on iPads and iPhones.

Tue, 05/03/2011 - 15:54 | 1235534 Sudden Debt
Sudden Debt's picture

Hey, here in Belgium we're at 9,75$ a gallon...

sweet defaltion...


Tue, 05/03/2011 - 14:27 | 1235068 augie
augie's picture

bearish for prius'


lol i totally deserved that junk.

Tue, 05/03/2011 - 14:32 | 1235085 TruthInSunshine
TruthInSunshine's picture

If the markets forced a soon to be withdrawal of liquidity, either for economic and/or political reasons (Obama's 2012 chances of re-election, distress all over the world due to rising food/energy prices, tension with China), the deflation train will run long and hard - longer and harder than many acknowledge.

If not, it's all for naught anyways, because QE administered through POMO injections, alongside nurse ZIRP have done nothing for the organic economy but make things objectively worse, and have now shifted the burden of contraction to government workers (watch and see the tax rebellion grow -Jeetner is waking up to cold, cold reality, right now, because there are some holdouts in Congress who are laughing at his phone calls), along with creating the very kinds of irrational asset class bubbles that have always preceded and then caused (after popping) major economic dislocations, recessions and worse, in the past.

Bernank is a dead duck. He flew too close to the sun with wings made of pastrami. He sevened out. He sharted the bed.

He is a failure of an economist and monetary policy maker.

He's damned if he mounts a campaign (costly and resource intensive) to bring earnest QE back, full scale, and he's damned if he doesn't, but one of those avenues requires less stress, work and allows him to pass the buck to someone else - and I'll let everyone choose which avenue that is.

ZIRP long term was destined to fail as real catalyst to kick start a recovery. Bernanke was an idiot for not understanding this Greenspanonian Lesson In Fail.

But QE via POMO is all of Bernank's doing and his failure to own, forever.

Eat your heart out, Paul Krugman, you Keynesian Punching Bag.

Tue, 05/03/2011 - 14:21 | 1235087 spartan117
spartan117's picture

Why isn't the S&P down 100 if QE is ending?

Tue, 05/03/2011 - 14:24 | 1235107 uno
uno's picture

I'm watching the feds to see if they are changing the rules on speculators in commodities, the front running is too intense right now to be a CME margin raise.

Tue, 05/03/2011 - 22:02 | 1236661 Ned Zeppelin
Ned Zeppelin's picture

Simple. The las FOMC statement did not rule out QE3. the presumption is the Bernanke put will not tolerate a drop in equities, hence QE.x is a foregone conclusion. The market has been taught the lesson by the Fed and is reacting exactly as hoped. 

Tue, 05/03/2011 - 14:21 | 1235090 hedgeless_horseman
hedgeless_horseman's picture

Oceania has always had quantitative easing.

Buy this fucking dip you fucking proles.

Tue, 05/03/2011 - 14:27 | 1235120 tekhneek
tekhneek's picture

"chasing" a dip is much different from "buying" one... be careful here guys. I'm a huge silver bug, but this doesn't seem like it's going to return to its nominal highs just yet.

Tue, 05/03/2011 - 14:27 | 1235140 Blotsky
Blotsky's picture

"Miniplenty" has and will continue to provide.

Tue, 05/03/2011 - 14:37 | 1235191 CPL
CPL's picture

WTI isn't budging.  Still fixed in 26ish after the pop last week to 28.  It's been flat.


Look at the chart.  That's a dip.  Buy that dip.  Shit!  They actually pay dividends on this.  Going to have to eyeball this later.

Wed, 05/04/2011 - 08:25 | 1237471 SoNH80
SoNH80's picture

WTI is lower than Brent because of bottlenecks at the Cushing, OK trading hub.

Tue, 05/03/2011 - 14:19 | 1235095 Al89
Al89's picture

What about the markets pricing in renewed Japanese QE? 

Tue, 05/03/2011 - 14:23 | 1235099 vast-dom
vast-dom's picture

what is going on with SLV? Part of me wants to buy this massive dip more at crater and the other part is unsure of the gaping drop goes way the hell down to hell....

Tue, 05/03/2011 - 14:24 | 1235118 bob_dabolina
bob_dabolina's picture

Ah the excitement of it all. This comment perfectly expresses the duality of the greed/fear paradigm.

What to do? Buy/sell?

Tue, 05/03/2011 - 14:31 | 1235146 SheepDog-One
SheepDog-One's picture

Obviously the right answer is buy AND sell! Buy armageddon items, sell everything else that trades on a corrupt bid/ask fraud system.

Tue, 05/03/2011 - 14:30 | 1235159 vast-dom
vast-dom's picture

there is neither fear nor greed in my question -- it may be all a function of your projecting..... Anyone with productive insightful answers welcome. 

Tue, 05/03/2011 - 14:39 | 1235198 Smu the Wonderhorse
Smu the Wonderhorse's picture

Patience is a virtue.  I would wait till some of this dust settles and get back in.  Jim Rogers' comments that he feared silver was in a short-term bubble seem to have hit the nail on the head even if the current pop has been clearly manipulated.

Tue, 05/03/2011 - 16:25 | 1235642 earnyermoney
earnyermoney's picture

He mentioned one caveat to that theory, the dollar. Obama, Timmy and Ben have been saying, China's currency is undervalued by some percent. I've seen 40% thrown around in various articles. If China will not allow the Yuan to appreciate then Ben will devalue the dollar by 40%. From it's high back in 2008 that's in the 50 handle range.

Tue, 05/03/2011 - 22:02 | 1236668 Ned Zeppelin
Ned Zeppelin's picture

The price of oil/gasoline at a 50 handle DXY will asphyxiate the economy. 

Tue, 05/03/2011 - 14:55 | 1235272 blunderdog
blunderdog's picture

Buy some now and cheap out of the money calls as a hedge for a really severe crash?

Tue, 05/03/2011 - 16:54 | 1235729 TSA gropee
TSA gropee's picture

Indeed, perhaps for some it is greed, but for the many others it is not and is more a question of "survival" (means diff things to diff ppl). For me, I start to get a bit antsy when I read that FEMA is conducting a Tier 1NLE for the month of May. In FEMA’s own words: “NLE 2011 will simulate the catastrophic nature of a major earthquake in the central United States region of the New Madrid Seismic Zone (NMSZ).”

Balance is needed because you can't eat precious metals. Little bit of gold, little bit of ammo, little bit of silver, non GMO seeds, etc.

Tue, 05/03/2011 - 14:27 | 1235122 ReallySparky
ReallySparky's picture

Darlng...SLV is a paper ponzi with nothing in it.  Do not play with SLV.

Tue, 05/03/2011 - 16:29 | 1235661 TSA gropee
TSA gropee's picture

Can you qualify that a bit more?

Tue, 05/03/2011 - 14:20 | 1235101 Voodoo-economist
Voodoo-economist's picture

on no volume whatsoever

Tue, 05/03/2011 - 14:24 | 1235108 LawsofPhysics
LawsofPhysics's picture

No shit, the Bernanke knows that deflation is good for the people, but bad for his masters.  The propaganda machines will go into overdrive to convince the remaining sheep that deflation is really bad for them and they will beg for more QE.  Everything, let alone the price of physical metals, is about to detach itself from paper.  ALL paper going worthless, hedge accordingly.  Possession remains 9/10 ths of the law.

Tue, 05/03/2011 - 14:29 | 1235132 apberusdisvet
apberusdisvet's picture

A lot of fakeouts lately; photoshopped certificates, weird assassinations.  The latest in mind control from the Ministry of Disinformation (FED branch) is "to QEn or not QEn".  Nice touch with the silver slam, but the PMs will go to the moon regardless; the economy and the USD are so dreadfully phucked.

Tue, 05/03/2011 - 14:27 | 1235137 FrankIvy
FrankIvy's picture

Can somebody elucidate for me?  Does this mean that QE3 is coming or does it mean that there will be no more QE? 

It seems that the end of all QE would cause a drop in everything.

Tue, 05/03/2011 - 14:43 | 1235228 Smu the Wonderhorse
Smu the Wonderhorse's picture

Christ is Risen!

Would seem that way, wouldn't it?  I expect that with the reinvestment program that (I think) Bernanke announced after the end of the $600B QE2 in June, there may be enough juice to keep the Apples and Amazons and Netflixes afloat -- and the Treasury market.  I fully expect there will be ongoing QE in some form behind the scenes anyway, some accounting sleight-of-hand.  Commodities may well be in for some serious short- to medium-term pain. I think the call word now is, "Patience."  If you're not sure what to do, do nothing. I bailed out of my paper silver (I own physical as well) after the day recovery from the pole-axed drop on Sunday evening.  Am now wait-and-seeing.

Tue, 05/03/2011 - 18:20 | 1236025 Rainman
Rainman's picture

... more accurately, QE recess means everything drops but the dollar and UST. Be prepared and don't underestimate the Bernank's need to dollar strengthen, poleax commodities and unscramble the equity bubble and squeeze down rates. Somebody's sniffing it can count on that.

Shorts need to wear body armor in any case.

Tue, 05/03/2011 - 14:29 | 1235138 EnglishMajor
EnglishMajor's picture

What if there's not enough room to stand up in the Volkswagon because we hit the Peak Oil ceiling when we try?  Let's just see how cooked the books really are.

Tue, 05/03/2011 - 14:29 | 1235149 TraderTimm
TraderTimm's picture

Off-topic, but I'm curious if any of the channel regulars can tell me what is up with the chat server? Thanks in advance...

Tue, 05/03/2011 - 14:39 | 1235201 fuu
fuu's picture

I have not been able to get into irc for a while now. Figured I farked something up on my end though. Sorry no help for you.

Tue, 05/03/2011 - 14:33 | 1235150 falak pema
falak pema's picture

US economic mayhem like OBL would never have been able to perpetrate in his WILDEST dreams; now an every day event concocted by the Oligarchy. Who is the greatest enemy of the US people??....

In the meantime...the silver quote

Tue, 05/03/2011 - 14:52 | 1235263 magpie
magpie's picture

Islam at its time of strength had a silver standard.

Tue, 05/03/2011 - 15:01 | 1235293 falak pema
falak pema's picture

Islam at the time of its strength had the philosophers, the 'falsafa', the physicians and the mathematicians...then they said God is all powerful and we can go to sleep! A bit like the US today!

Tue, 05/03/2011 - 15:05 | 1235314 magpie
magpie's picture

If you junked me, then i at least expect an essay on OBL's theory of monetization and economics.

Tue, 05/03/2011 - 15:28 | 1235437 falak pema
falak pema's picture

I didn't junk you! OBL had only one theory....Islam! and its medieval gobbeldy gook...

Tue, 05/03/2011 - 15:41 | 1235475 magpie
magpie's picture

Heh, my copy of the Koran has been missing for over a week, now i'm stuck reading Carlyle on Mohammed.

Not fit to be printed these days...

Tue, 05/03/2011 - 15:48 | 1235524 falak pema
falak pema's picture

I dont read it so you'll have to go hunting elsewhere...but you could always find solace in the bible

Tue, 05/03/2011 - 15:01 | 1235302 magpie
magpie's picture

Oh please, and the USA, almost all of Europe, India and China had one too.

Junk enough, Sarcastro ?

Tue, 05/03/2011 - 15:33 | 1235449 falak pema
falak pema's picture

what's bugging you? Is it gold silver or the quest for that insufferable lightness of being?

Tue, 05/03/2011 - 15:43 | 1235484 magpie
Tue, 05/03/2011 - 15:50 | 1235530 falak pema
falak pema's picture

If you're a woman I can understand your question... he went without saying good bye to you personally...

Tue, 05/03/2011 - 15:59 | 1235562 magpie
magpie's picture

No, this is Mr. Magpie.

OBL probably never loved PMs, wasn't even long Crude. Only long DXY, and he might well be remembered as an artefact of the Dollar Standard.

Tue, 05/03/2011 - 16:12 | 1235606 falak pema
falak pema's picture

He and his saudi friends...Th big trend is not gold its oil ...up and up as it peaks..Thats why the USD is weakening. Can't have all these debts and stay reserve currency. Ben has chosen to inflate and that pushes up PMs as long as Oil keeps going up, USD down to compensate and PMs up to hedge fiat evaporation!


Tue, 05/03/2011 - 14:34 | 1235166 Sofa King
Sofa King's picture

Once the cat was out of the bag, that Sprott is taking profits, everybody else is jumping in the mix, if you believe Silver is ultimatly going higher, you can always buy back in...

It's traditionally a tough game and futures trading has been way too easy lately.  Time to bring back chasing a shot of Scotch with some Pepto.

Tue, 05/03/2011 - 14:34 | 1235168 mynhair
mynhair's picture

Looks like the annual migration of the lemmings to the Hamptons, to me.

Tue, 05/03/2011 - 17:51 | 1235909 aerojet
aerojet's picture

Sell in May and go away.

Tue, 05/03/2011 - 14:37 | 1235169 SheepDog-One
SheepDog-One's picture

'Expect a real spike in vol if we have reached the inflection point.'

I dont really see any volume anywhere.

And who knows what we may see by open tomorrow morning in this dawn of WW3, Israel bombs Iran overnite, oil opens at $120? Thing is, no one has any firm idea of what might happen in the next 24 hours and its way above 'QE to be or not to be'.

Tue, 05/03/2011 - 14:33 | 1235173 topcallingtroll
topcallingtroll's picture


But apparently only the troll can hear the deflationary monster off in the distance.

Tue, 05/03/2011 - 14:35 | 1235193 SheepDog-One
SheepDog-One's picture

Deflation in what? 

Tue, 05/03/2011 - 15:00 | 1235290 The_Euro_Sucks
The_Euro_Sucks's picture

We hit deflation if one uses real money (gold, silver) as measurement. Hyper/heavyinflation in fiat.

Tue, 05/03/2011 - 16:48 | 1235717 michigan independant
michigan independant's picture

No many more see it. Be patient.

Tue, 05/03/2011 - 14:34 | 1235188 dlsamg
dlsamg's picture

Ben will not let the markets drop. It's his only option. If the Fed has to buy all the ES long contracts to keep the market up he'll do it. The Fed in no longer manipulating the is the market. Assume the market is totally rigged to go up and you will make money. Don't fight the Fed. BTFD!!!!

Tue, 05/03/2011 - 14:40 | 1235204 SheepDog-One
SheepDog-One's picture

OK fine let him keep printing and monetizing everything in sight, dollar to 60 oil to $150.

Its not a question of whether or not Ben has to stop and let the markets drop, just depends on 'when'.

Tue, 05/03/2011 - 14:36 | 1235195 falak pema
falak pema's picture

math man's chuckle starts to rumble like that of danger time...

Tue, 05/03/2011 - 14:41 | 1235207 Sophist Economicus
Sophist Economicus's picture

HA!   I love this market!   We are living in a once, maybe twice, in a lifetime environment to make a boatload of fiat -- to be instantly converted into PMs, of course...



Tue, 05/03/2011 - 14:42 | 1235212 kito
kito's picture

i believe zh has been mocking bernanke for his call on commodities price increases being transitory. stocks have barely fallen, why would bernanke call on qe3 when he is beginning to prove his own point? market seems to have its own legs now. only if and when the 401k holders are biting their teeth will bernanke pull the trigger.

Tue, 05/03/2011 - 14:40 | 1235215 Internet Tough Guy
Internet Tough Guy's picture

Oil at 110 is a plunge. Now I know we are in trouble.

Tue, 05/03/2011 - 14:45 | 1235244 SheepDog-One
SheepDog-One's picture

Exactly, when people are calling oil at $111 a 'deflationary plunge', wow are we fuked!

Tue, 05/03/2011 - 14:51 | 1235261 What does it al...
What does it all mean's picture

ZH is trying its best to detract from SILVER, which dropped from 49.7+ to 40.8... over 3 weeks.  Nothing else moved that much!

Tue, 05/03/2011 - 14:58 | 1235286 SheepDog-One
SheepDog-One's picture

Silver dropped due to what? A shift in sentiment or FED policy? Or a 40% hike in CME meddling over the last 2 weeks?

Tue, 05/03/2011 - 15:06 | 1235317 CrashisOptimistic
CrashisOptimistic's picture

People, silver is not the lifeblood of civilization.  

Oil is.

Y'all need to recalibrate where you focus your attention.

Tue, 05/03/2011 - 15:21 | 1235388 What does it al...
What does it all mean's picture

Silver has value, that is undeniable, but 49 isn't it.  All these hype and the subsequent bubble bursting.  (20 points round trip is impressive!)  It is more significant given that at 40, it is like you bought it at 20.  It's just math.

Tue, 05/03/2011 - 16:04 | 1235574 Sudden Debt
Sudden Debt's picture

Silver-Zinc batteries when oil runs out? :)

Tue, 05/03/2011 - 14:45 | 1235245 citrine
citrine's picture

+ 1 lol

Tue, 05/03/2011 - 14:40 | 1235219 10044
10044's picture

Au/ag/crude are getting ready to explode when the elites meet in greece to sell the country, flash crash 2.0

Tue, 05/03/2011 - 14:40 | 1235220 monopoly
monopoly's picture

A tough 4 days to be sure. But since I am not on margin, just going to sit and watch. When gold turns up, look out.

The dark side is on the winning side at this point.

Tue, 05/03/2011 - 14:43 | 1235221 falak pema
falak pema's picture

It is now ironic to hear the gold-silver bugs now pray that Ben pumps quickly the asset bubble with QE-3 so that the PMs stay buoyant, instead of saying..come on deflation...we can handle you as we believe the PM rise is independent of all ST economic trends. Its the ultimate fiat currency hedge which stands on its own two legs; as fiat is DEAD!

Tue, 05/03/2011 - 15:17 | 1235380 Sophist Economicus
Sophist Economicus's picture

There is no need for prayer.   The FED's owners are bankrupt from the lense traditional accounting standards.   Liquidity injections through debt purchases and POMO vigs will continue.   Wanna know why?   Because it is the FED, the banks, the GSEs, the pension funds, the insurance carriers, and our esteemed federal, state and local governments that 'CANNOT STAND ON THEIR TWO LEGS' without suspension traditional accounting rules that would apply to any other NON-FINANCIAL entity.

Add to this that Treasury will continue to sell bonds and spend, all the while not defending the fiat dollar, and the dollar collapse will come...

As for the 'come on deflation' battle cry -- there is no need to 'wish' it.   Take any of the major stock indexes, or bond indexes and map them to GOLD.    Let me know if you don't see deflation....   I sure do

Tue, 05/03/2011 - 15:54 | 1235546 falak pema
falak pema's picture

Unless the FED decides it'll be mega-deflation...its their call...but I agree for political reasons I don't see it (deflation) before 2013! Dips yes, but more roller coaster types.

Tue, 05/03/2011 - 16:25 | 1235624 css1971
css1971's picture

Oh my god. This is a certainty. Deflation - Never.

Without a gold standard it will never happen. Just look at the purchasing power of a dollar over the last 100 years. Look at the last 40. Y'know what, it'll have a bloody half life, an exponential decay curve[1]. Worst you'll get is a crash and a recession for a year or two while the banks reset.

Gold anchors a currency. It enforces deflation because god damnit people want those coins when they get paid back. Without an anchored currency, you just get inflation, stagflation, inflation, inflation, inflation, stagflation because it can just be printed.

I tried to explain that to the spods at the automatic earth & oil drum, but y'know, everybody knows best (including me).


Tue, 05/03/2011 - 16:33 | 1235664 falak pema
falak pema's picture

right now those who hold USD fiat don't want gold standard. This will take time...

Tue, 05/03/2011 - 16:42 | 1235694 Sophist Economicus
Sophist Economicus's picture

The FED may have its hands tied.   There is an unholy alliance between the Government and the FEDS.    Even if the FED wanted to let all of its members fend for themselves and face liquidation (IMO, that type of internal canabalization is hard to believe), Treasury is going to need to sell bonds to pay for INCREASED social spending (welfare, medicare, State and Local bennies, etc) as well as of those great NEW programs our esteemed bumbling senators and congressmen will come up with to 'stop the suffering of the people'.   Those social programs will put FRNs in the hands of non-productive people and activities and they will bid for the basic necessities -- putting a dollar floor on those items


If the FED says "we're not buying your stinking bonds, not printing anymore FRNs", to the federal government, do you really think that Treasury will rollover and continue to give them a monopoly on currency creation?   I don't see it happening.   


So, the FEDs shareholders and Treasury will make sure the 'printing will continue' and that will create the dollar devaluation.   Of course, the peole will be under a constant deflation cloud.   Trying desperately to keep up with the rising costs that the dollar devaluation brings...

Tue, 05/03/2011 - 14:45 | 1235241 gwar5
gwar5's picture

I've been waiting to see if crude would pause along with PMs. I guess it did. So, nothing happens if Bernanke is perceived to be stopping QE 2?  That pretty much confirms Bennie is the most powerful man in the world.

How pathetic are we as a species to allow this to happen?

Tue, 05/03/2011 - 14:48 | 1235259 SheepDog-One
SheepDog-One's picture

VERY pathetic. All smart people sit and marvel at their captors in Stockholm Syndrome USA, and they call it normal.

Tue, 05/03/2011 - 15:07 | 1235318 falak pema
falak pema's picture

What's consoling for the Oligarchy and Ben is that the world is even more pathetic...there is no visible plan B to their ongoing that even when it splutters there is no fast downturn. Things will just chug along at their own momentum under the deadweight of accumulated debt, debt, ever rising debt...King Canute, like Ben, sits by the ocean and tells the waves to Ben does to ever creeping debt 

Tue, 05/03/2011 - 14:52 | 1235266 Phillips Capital
Phillips Capital's picture

And no "Silver Plunges" headline, even though the (albeit paper) action in silver is almost 4 times greater than that of crude. I see what's going on here. You and Max. Never give silver drops much attention whatsoever.

Tue, 05/03/2011 - 15:17 | 1235360 css1971
css1971's picture


You did read their disclosure policy didn't you?

Zero Hedge is about many things.  One is certainly the connection between skepticism and personal responsibility in matters financial.


You should assume that at all times we are so totally just talking our book it would shock and awe you like the unexpected, early-morning arrival of a cluster of BGM-109C Tomahawks (were you a believer in the importance of "optics" that is).

And Max is working for Russian TV. Come on, they're commies out to end The American Way and bring the country to it's knees. What do you expect?

Tue, 05/03/2011 - 15:22 | 1235409 Phillips Capital
Phillips Capital's picture

Oh I know.. I know a super biased environment when i smell one, i'm just blowing the whistle. Can't let anyone get away with BS without throwing my 2 cents at them. 

Tue, 05/03/2011 - 16:06 | 1235590 css1971
css1971's picture

They're all super biased, they all have agendas. What makes ZH special is it's much more fun! And you get to find out stuff nobody else has.


Tue, 05/03/2011 - 16:18 | 1235626 Phillips Capital
Phillips Capital's picture

Yeah, absolutely! The info really is pretty awesome. These dudes could pull up data on the moon being made of cheese and it would be heavy enough to make you start a dairy company with NASA.  

Tue, 05/03/2011 - 16:38 | 1235681 css1971
css1971's picture

You are so right on that. In fact, since the O[s|b]ama thing, I have fashioned my very own ZH tinfoil hat. I now wear it while posting.


Tue, 05/03/2011 - 17:03 | 1235743 Hephasteus
Hephasteus's picture

LOL. I really love the attempts to discredit max.

Sorry the dollar died. That shit happens when you don't care of things.

Tue, 05/03/2011 - 14:50 | 1235268 Yossarian
Yossarian's picture

I don't understand the Silver obsession except that it is appealing (even if true) to those generally sympathetic conspiracy theories (not saying they are 100% false- I don't know). I want to own Gold as insurance against the erosion of the purchasing power because it has always been money.  Although Silver has more economic utility, that is not my reason for owning PM's and I am not convinced about SLV's monetary merits.  That being said, if the inflation trade is over these will all be falling...

Tue, 05/03/2011 - 14:54 | 1235277 SheepDog-One
SheepDog-One's picture

I dont get the call...'inflation over' due to what? Theyre done printing money? I dont believe it.

Tue, 05/03/2011 - 15:17 | 1235369 Yossarian
Yossarian's picture

We know that the natural course of events is highly defaltionary and that they are not going to suddenly allow for that to play out.  But by the inflation trade being over I am more worried about the next 3-6 months- if you are very long commodities, even if sitting on large paper gains, a 25% pull back will not be pleasant and, when it's over, it will be difficult to buy more because the crowd will be shouting about the great short opportunity.

Tue, 05/03/2011 - 15:26 | 1235431 mayhem_korner
mayhem_korner's picture

We know that the natural course of events is highly defaltionary

Who's "we", and how do we "know" these things.

Last I checked, despite the scrum and hype about asset classes rising and falling, the dollar is still barely treading the 73 line.  Everything else is smoke, and there is no deflationary pressure on that thing right now.

I can wait out a 25% pull back in commodities.  Gravity always wins out. 

Tue, 05/03/2011 - 17:58 | 1235931 aerojet
aerojet's picture

Oh gawd.  Look, credit is money and we have recently gone through some serious credit deflation that only the Fed's vast QE, aka money printing, has been able to slow, not stop, but slow the deflationary process. 

Tue, 05/03/2011 - 18:51 | 1236161 mayhem_korner
mayhem_korner's picture

Credit is money?  You just confirmed your sub-50 IQ with that.

Credit is the source of the inflation.  Only when the fiat dissolves in an inflationary crack-up will true values re-emerge.  Then you'll have some nice low prices (your deflation).  But if you think credit is money, you're not going to have any currency when the fire sales are on.

Best wishes, aero-head.


Tue, 05/03/2011 - 14:52 | 1235274 SheepDog-One
SheepDog-One's picture

So oil off $2 means QE end signal and wild calls of 'deflation' confirmed? I think everyone may be a bit too skittish and jumping the gun here in markets that are 100% manipulated looking at a $2 drop in something being a signal of mass reversal shift in FED policy? Come on, simma down now.

Tue, 05/03/2011 - 14:57 | 1235281 Catullus
Catullus's picture

SPY puts, long physical silver trade. Too simple. But it's working. I hated the flation debate. It was always going to be "there will inflation so long as they print and deflation if they don't." Print or die. Hint: they won't choose die.

Tue, 05/03/2011 - 14:55 | 1235284 oogs66
oogs66's picture

ES down 2 days in a row, in spite of OBL getting killed, the first day of the month positive bias, and POMO.  Hearing smart money pulling out of the market with QE3 unlikely.  Are stops being hit?  And we haven't yet seen a Greek default, which I expect by the end of this month.

Tue, 05/03/2011 - 15:00 | 1235288 unclebigs
unclebigs's picture

Silver Bugs getting Corncobbed again today.  LMFAO!!!!!  Maybe you Idiots should buy more physical at Apmex.  LMFAO!!!!!!

Tue, 05/03/2011 - 15:02 | 1235309 css1971
css1971's picture

Silberling appears to be the place to buy physical precious metals online in Germany. I'd never heard of it a month ago.


Think about that.


Tue, 05/03/2011 - 15:05 | 1235328 SheepDog-One
SheepDog-One's picture

No I buy more physical at my local dealer.

Tue, 05/03/2011 - 15:58 | 1235561 jomama
Tue, 05/03/2011 - 17:59 | 1235936 aerojet
aerojet's picture

I warned them, but tulipmania...

Tue, 05/03/2011 - 14:58 | 1235291 mayhem_korner
mayhem_korner's picture

DXY straddling 73 all day.  That's the bellwether. 

We're going to see extreme vol on everything as the Complex looks to scare everyone without a perspective out of their holdings and into Ts. 

This is the next step up in the panic at the Fed, the Morgue, et al.  This will intensify into undiluted wrath.

I'm more than comfortable to hole up & wait these scumbags out.  And then, I'll proclaim my favorite Eastwood line, from Pale Rider

Are you through

Tue, 05/03/2011 - 15:01 | 1235301 gwar5
gwar5's picture

I just love Thomas Sowell...


"...When the Federal Reserve System started creating hundreds of billions of dollars out of thin air, they called it 'quantitative easing' of the money supply.

When that didn't work, they created more money and called it 'quantitative easing 2' or 'QE2,' instead of saying:  'We are going to print more dollars-- and hope it works this time.'  But there is already plenty of money sitting around idle in banks and businesses.

The policies of this administration make it risky to lend money, with Washington politicians coming up with one reason after another why borrowers shouldn't have to pay it back when it is due, or perhaps not pay it all back at all. That's called 'loan modification' or various other fancy names for welching on debts...."

-- Thomas Sowell, IBD, May 3, 2011.

Tue, 05/03/2011 - 15:44 | 1235488 Cruel Aid
Cruel Aid's picture

+1 for Sowell

Tue, 05/03/2011 - 15:01 | 1235304 ivars
ivars's picture

The oil COULD correct to Brent 105-110 during first half of May. But that is short term. And nowhere near what will be seen in silver. This correction of oil was also present in my Feb. 6th graph. 2 peaks, 2 throughs.

But look what comes afterwards, in July: Brent 140-150. That will kill any QE3 if it ever starts.

Tue, 05/03/2011 - 15:05 | 1235311 SilverDoctors
SilverDoctors's picture

3rd and final? Its only final if the dollar collapses completely before qe3 is up. Theres no stopping QE until the dollar reaches 0.

Tue, 05/03/2011 - 15:08 | 1235337 falak pema
falak pema's picture

The name of the Oligarch's game is to scare the shit out of every one, nothing is stable? every thing up for grabs : mega roller coaster ride for eighteen months ahead!

Tue, 05/03/2011 - 15:23 | 1235400 Quinvarius
Quinvarius's picture

Surely Obama's war on speculators includes a margin hike on crude.  Of course they had to deal with the important things like silver first.

Tue, 05/03/2011 - 15:42 | 1235489 Calmyourself
Calmyourself's picture

Took a late lunch look at Denningers.. Bad habit I know I will probably go blind but only do it till I need glasses..

They are up in arms about the short bond dropping as a safe haven play.. If this has been discussed please ignore, otherwise anY bond guru's hanging out that can offer some color..

Tue, 05/03/2011 - 15:57 | 1235556 Drag Racer
Drag Racer's picture

ION:workers at Fukushima to enter reactor #1 on thursday for the first time since it exploded.

Tue, 05/03/2011 - 16:13 | 1235610 Troublehoff
Troublehoff's picture

Hey, remember Mish? :)


His time is near, when he can finally say 'I told you it was deflation' least until the Bernank Bazooka is loaded up again.


I might have a look over on his site, see if he's calling it.... he's been busy expressing outrage over the union wreckers for a good long while now since asset prices went bat-shit crazy..


I ask everyone one question? Who is going to buy the T-Bills without the Bernank? Nobody.. so it's QE infinity sooner or later - hold onto your gold/silver



Tue, 05/03/2011 - 16:15 | 1235612 Troublehoff
Troublehoff's picture

dupe - what is this, Drupal?


can somebody put an id or timestamp on this form already? the number of duplicates we get here....

Tue, 05/03/2011 - 16:26 | 1235650 lolmao500
lolmao500's picture

QE3 is coming... in August.

Tue, 05/03/2011 - 16:28 | 1235657 falak pema
falak pema's picture

hedge the PMs in the interim.

Tue, 05/03/2011 - 18:43 | 1236128 Non Passaran
Non Passaran's picture

Right.  And you know... how?

Did uncle Ben told you that?

If that was certain or even likely, PMs, oil and stocks wouldn't go down today.

Do NOT follow this link or you will be banned from the site!