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Did The Computers Blow A Fuse?
Something odd happened in the last half an hour of trading today: after the EURJPY had been keeping in intraday lockstep with stocks, which has been the case everyday for the past roughly 7 months now as ZH regulars know all too well, it appears this pair suffered massive decoupling failure once the market plunged on the BP news. This sudden plunge in stocks was not followed by the EURJPY pair, which in turn has opened a massive gap, with neither mutually dependent variable wishing to close. This is as close to a risk-free pick up of 70 bps as one exists: buy the ES and sell the EURJPY. Of course, this is all too glaringly obvious to the millions in SPARC stations operating thousands of gigaflops of correlation arbitrage market scans every millisecond. The fact that they have not closed the gap yet is very concerning, and points to some troubling undercurrents in the quant side of the market that we can not determine as of yet.
h/t credit trader
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clearly someone is smoking green shoots...
fascinating
Well, this is about Bernanke. This is about Bernanke. He has to be on that call. Forget the investors. The investors are gonna do- If Bernanke listens- Bernanke needs to open the discount window. That's how bad things are out there. Bernanke needs to focus on this. Alan Greenspan told everyone to take a teaser rate, then raised the rate 17 times? And Bernanke is being an academic. It is no time to be an academic. It is time to get on the Bear Stearns call. Listen. Open the darn Fed window. He has NO IDEA how bad it is out there. He has NO IDEA! He has NO IDEA! I have talked to the heads of almost every single one of these firms in the last 72 hours and he has NO IDEA what it’s like out there! NONE! And Bill Poole has NO IDEA what it’s like out there. My people have been in this game for 25 years, and they are losing their jobs and these firms are gonna go out of business and HE’S NUTS! THEY’RE NUTS! THEY KNOW NOTHING!
I have not seen it like this since I went 5-bid for half a million shares of Citigroup and I got hit in 1990. This is a different kind of market. And the Fed is ASLEEP! Well, Bill Poole is a shame. He’s SHAMEFUL! He ought to go and read the Accredited Home document, at least I read the darn thing.
You can’t get a darn loan if you’re rich like me.
come on trimmed hedge, its time to get a new posting! you have used this one everyday for the past week! while i do find this clip of Kramer very ammusing you are running the risk of becoming as shameful as Bill Poole
Thanks for that. I thought my mind was going. Like, haven't I seen this before?
Someone is propping the euro vs yen, and forgot to cover their tracks...
we had this great, you know, model of, like, how the market should look, like, you know, if it was, you know, really trading, with, like, real people buying, like, and shit, but, like the BP thing, you know caused some, like, hairball shit, kinda like, and real shit got, like, traded, and, ^&%!, the whole thing is naked, like for real, as a jaybird. Its so broken and everybody can see it. Even my fake hippie is gone. We had such a good thing going there and some ass had to price in reality on BP.
*****!!!!
Market is trading tick for tick with EUR/USD, I see this correlation still in full force.
That broke down when the ECB made it clear it won't let EURUSD below 1.21. Been tracking Yen since then
So few posts lately robo - maybe since (as you said yourself) you only post the hot girls on up days you could post less attractive girls on sell-off days. (FWIW, I just enjoy the posts, plenty of pictures of hot girls elsewhere on the internet, obviously :))
LOL, Huxley! Every 10 pt. SPX drop will be met with Rosie O'Donnell. Yak!
and futures are up as we speak. Well called, lets see what happens tomorrow when the real market opens.
"The fact that they have not closed the gap yet is very concerning, and points to some troubling undercurrents in the quant side of the market that we can not determine as of yet."
Someone planning a snap back raid off 1070? I find it hard to believe the algo's are phased by the news so, is someone stretching the spring?
cr?
So is the EUR/USD going to trade at par? Or will it even reach 1.20?
If you ask me the EUR/USD is going straight to 1.50.
Call me crazy and I might be, but when the sane person is placed in the loony bin he always looks crazy.
America ain't the safe haven that people "investors" think it is.
The USD/JPY followed the same trend. It didn't follow the Nikkei back to pre-resignation lows.
Well isn't this just a big fucking coincidence or what.
I mean, WTF; could they be any more obvious.
CB's won't allow par.
You Cheeky Bastard.
The U.S needs hyperinflation to pay off the debt. The economy sure ain't gona produce what it needs to pay off...well...infinite debt.
Not sure why shorting the eur/usd is such a good trade. I am tentatively taking the other side of that trade.
There WILL be inflation goddammit! -Ben "God" Bernanke
There are practical limits and unintended consequences associated even with the most rigged game.
One of the biggest risks is everyone and their brother knowing its rigged by virtue of the blatant huge rigging thats required to acheive diminishing retu3rns.
can someone explain it to me......i know that the US markets are following the EUR/JPY tick by tick..........but i can see that even the INDIAN markets are doing exactly the same thing .......how is that possible??...are there any computers involved in the BOMBAY stock exchanges??//
I've been holding YCS for ages, waiting for this day ...
it seems like forever that the knee-jerk reaction to a need for safety is to run to the yen.
Finally, someone has noticed that maybe Japan isn't all that safe, either.
Maybe they even read the headlines.
I've been wondering the same thing about the Euro.
Every one seems to be saying parity without regard for the game of relativism that is the forex markets, i.e. they all trade relative to one another even if the Dollar is (presently) regarded as the reserve currency.
If the Euro doesn't go under and given the parlous state of the USA I could quite see a big move up in Sterling and the Euro - let's face it, Sterling has been around a lot longer than the Dollar and I can remember as a child when the Pound was $2.40.
DavidC
Well thank God the BP news was yesterday and no longer matters today. Thats 'old news', now time to pump the futures. CNBC pretty breathlessly pumping a 'possible great unemployment news' to hit Friday...got to pump those markets CNBC ladies, in the oldest profession!