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Do You See What Happens Larry When You Ban Naked Shorting, CDS Trading And Institute A Transaction Tax With A 6 Hour Notice?

Tyler Durden's picture




 

With Merkel also about to announce a transaction tax, America is about to see its population of HFT scalpers, front runners, predatory algos and other binary mutants explode as all the German math Ph.D.'s come to New York. In the meantime, if you listened to Goldman earlier today and covered you lost, as usual. Santelli now sees EURUSD going to 1.20 promptly. Additionally, with tens of billions in sovereign CDS scrambling to unwind overnight with no prior warning, you will see some seismic moves via arb desks. When Lehman blew up, CDS traders at least got a heads up that Sunday. This crisis is rapidly becoming worse than Lehman.

 

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Tue, 05/18/2010 - 13:45 | 358532 Mae Kadoodie
Mae Kadoodie's picture

why the gold sell-off?

Tue, 05/18/2010 - 13:48 | 358548 LoneStarHog
LoneStarHog's picture

Goddamn! With TEN YEARS of data that has been published by GATA, how many times is someone going to ask this same question?????

Tue, 05/18/2010 - 13:56 | 358565 Kataphraktos
Kataphraktos's picture

Why the gold selloff?

(I couldn't help myself)

Actually, today is one day I don't see manipulation... gold is actually holding up very well today. If you see it head for 1200 in a rapid, violent move, then start suspecting...

 

And for God's sake, if you want to bet on long gold, use at the money calls, limit your downside against the Fed-backed JPM nitwits.

Tue, 05/18/2010 - 13:57 | 358578 LoneStarHog
LoneStarHog's picture

Gold does not have to plummet for there to be manipulation.  The best example is the 2% rule, which has been enforced for years.

Gold/silver are simply NOT free markets, yet!

Tue, 05/18/2010 - 13:55 | 358570 Internet Tough Guy
Internet Tough Guy's picture

Easy, Hog. Don't make me tase you, bro.

Tue, 05/18/2010 - 14:22 | 358673 John McCloy
John McCloy's picture

  Damn you hog. You just forced me to go watch that tool get tased again on Youtube. It never gets old.

Tue, 05/18/2010 - 13:54 | 358569 Sucks_to_be_Smart
Sucks_to_be_Smart's picture

moronic computers who don't know which way correlations go on an hour by hour/day by day basis? 

Tue, 05/18/2010 - 13:55 | 358571 sheeple
sheeple's picture

option week; surge protection team doing their things

Tue, 05/18/2010 - 14:41 | 358760 Pegasus Muse
Pegasus Muse's picture

Option expiration week?

That or "smart money" is bailing 'cause Cramer's on the tube pumping gold. 

Tue, 05/18/2010 - 13:46 | 358536 London Dude Trader
London Dude Trader's picture

Flash Crash #2 today?

The mother of all flash crashes?

Tue, 05/18/2010 - 14:01 | 358592 Pat Shuff
Pat Shuff's picture

 

    THE SECOND TOP COMING

    Churning and churning in the widening gyrations
    The fall guy cannot hear the Fabulous Fab;
    Things fall apart; the averages cannot hold;
    Mere algorithms are loosed upon the world,
    The red-inked tide is loosed, and everywhere
    The ceremonies of insolvencies are drowned in liquidity;
    The best are charged but avoid conviction, while the worst
    Are full of flash orders.

    Surely some revelation is at hand;
    Surely the Second Top Coming is at hand.
    The Second Top Coming! Hardly are those words out
    When a vast image out of CNBC
    Troubles my sight: a waste of dark pools;
    A shape with lithe body and the head of a man,
    A gaze blank and pitiless as the sun,
    Is moving its slow thighs, while all about it
    Wind shadows of the indulgent no-fat dessert ads
    The darkness drops again but now I know
    That twenty seconds of stony asleep-at-the-switch
    Were vexed to nightmare by a rocking ticker,
    And what rough beast, its hour come round at last,
    Slouches towards bell-ringing to be born?

Tue, 05/18/2010 - 14:20 | 358666 chet
chet's picture

+1  Nice work

Tue, 05/18/2010 - 14:24 | 358687 Rider
Rider's picture

+1 poethic

Tue, 05/18/2010 - 15:13 | 358846 mrhonkytonk1948
mrhonkytonk1948's picture

If we could only tie Yeats rolling in his grave to a generator, there would be no energy problems! Good job!

Tue, 05/18/2010 - 13:46 | 358538 The Rogue Trader
The Rogue Trader's picture

Germany is building a "roach motel"

Tue, 05/18/2010 - 13:46 | 358541 Cheeky Bastard
Cheeky Bastard's picture

Nothing good came out of Gottingen since the 30s.

Tue, 05/18/2010 - 14:24 | 358688 Double down
Double down's picture

Agreed

Tue, 05/18/2010 - 13:49 | 358550 Yophat
Yophat's picture

Do your friends a favor. Tell them to "batten down the hatches" because there's a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don't need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won't recognize the country. They'll retort, "How the dickens does Russell know -- who told him?" Tell them the stock market told him.

http://www.businessinsider.com/dow-theorist-richard-russell-sell-everything-liquid-you-wont-recognize-america-by-the-end-of-the-year-2010-5#ixzz0oIumLLaK
Tue, 05/18/2010 - 14:01 | 358595 Internet Tough Guy
Internet Tough Guy's picture

Interesting. Has Russell ever had a freak-out before?

Tue, 05/18/2010 - 14:12 | 358637 John McCloy
John McCloy's picture

  My girlfriend is not thinking me too crazy now for forcing her to liquidate her 401k at Dow 11k last month. When she called the broker up he was saying to her, "I do not understand you finally recovered most of your losses and now you want to sell?"

I told her he would say something similar to that and told her to tell him this, "My boyfriend said to say I am no longer a willing participant in the ponzi scheme" 

Tue, 05/18/2010 - 14:45 | 358769 Dantzler
Dantzler's picture

Love it!

Tue, 05/18/2010 - 14:45 | 358770 TBT or not TBT
TBT or not TBT's picture

Awesome.

Tue, 05/18/2010 - 13:49 | 358555 koaj
koaj's picture

silly TD, central planners and central bankers know best

Tue, 05/18/2010 - 13:50 | 358556 Whizbang
Whizbang's picture

This is What Happens Larry! This is What Happens When You F*** a Speculator in the A**!

Tue, 05/18/2010 - 14:02 | 358600 wagefreedom
wagefreedom's picture

ha ha ha ha-- what is that from?? I can't find it in my Google!!!

Tue, 05/18/2010 - 14:08 | 358623 John McCloy
John McCloy's picture

The Big Lebowski

" Your like a child Angela.Like a child who wanders into the middle of a financial revolution.Angela you are out of your element!"

Tue, 05/18/2010 - 14:14 | 358647 ZackAttack
ZackAttack's picture

If you like that line, you will love this movie. Go watch it.

 

I'm not sure I can fully trust another human being who doesn't like TBL.

Tue, 05/18/2010 - 14:17 | 358656 faustian bargain
faustian bargain's picture

I keep telling myself I really need to watch that damn movie.

Tue, 05/18/2010 - 14:23 | 358675 Vecon
Vecon's picture

Won the oscar for best movie ever made!

Tue, 05/18/2010 - 14:23 | 358680 Kegfreak
Kegfreak's picture

and yes Donnie, we can go to In&out Burger after the crash!

Tue, 05/18/2010 - 20:03 | 358557 Mercury
Mercury's picture

These guys clearly don't know what the hell they're doing at this point but I for one do not have a problem with banning naked short selling per se. In at least some circumstances (in equities anyway) it gives the sellers' side of the market a mechanical advantage:  load up on puts/CDS etc. and give the order to essentially short the float at the market. BAM! Not a foolproof bear strategy but it can be hard for (an especially) smaller company to defend against. 

In the soverign debt/CDS arena I'm not sure you really can "ban" anything with much effectiveness.  If you put the squeeze on in one place it will come out another.

//////////////////////

Good Meredith Whitney interview from yesterday:

http://www.cnbc.com/id/15840232?video=1496578146&play=1

 

Tue, 05/18/2010 - 13:50 | 358558 DonnieD
DonnieD's picture

Why was the Euro ever valued 30% higher than the dollar in the first place?

Tue, 05/18/2010 - 14:09 | 358627 faustian bargain
faustian bargain's picture

Metric System.

Tue, 05/18/2010 - 14:26 | 358702 Double down
Double down's picture

HAAAAAAHAAAAA  +1/4, No, no, no +10 

Tue, 05/18/2010 - 15:05 | 358825 woolly mammoth
woolly mammoth's picture

excellent!!!

Tue, 05/18/2010 - 15:08 | 358833 jbowman
jbowman's picture

nice

Tue, 05/18/2010 - 15:17 | 358866 Mark of Zerro
Mark of Zerro's picture

+100

Tue, 05/18/2010 - 15:18 | 358867 Mark of Zerro
Mark of Zerro's picture

+100

Tue, 05/18/2010 - 15:23 | 358884 Mark of Zerro
Mark of Zerro's picture

+100

Tue, 05/18/2010 - 18:38 | 359253 Fazzie
Fazzie's picture

Funniest 2 word witty comeback award of the day!!

 +10 banannas !!

Tue, 05/18/2010 - 23:36 | 359920 Hephasteus
Hephasteus's picture

LOL. They were always valued the same. America just couldn't do the conversion.

Tue, 05/18/2010 - 13:54 | 358564 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Silver just moved through 1st support at $18.88...what happens next will be decisive....

Tue, 05/18/2010 - 14:08 | 358624 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

There she goes.Silver to move to $22 overnight, watch.......

Tue, 05/18/2010 - 14:12 | 358638 geminiRX
geminiRX's picture

I hope so. Bought 30oz physical last week for just under 20 bucks per oz. Yah, getting in a little late, but the way markets have been reacting lately is a little disconcerning....

Tue, 05/18/2010 - 14:14 | 358646 faustian bargain
faustian bargain's picture

That will be interesting...it's almost 19. right now.

Tue, 05/18/2010 - 14:20 | 358667 GoodBanker
GoodBanker's picture

I'm holding you to that one LH! (I wouldn't hurt if you're right, but bold and daring need to be held accountable) Cheers!

Tue, 05/18/2010 - 14:41 | 358751 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Cheers!  And if I may, I will hold to breaking $20.92 in 24 hours, as that is the exact number I have been waiting for to start the fist leg of the break out ($20.92 is the old peak circa May '08).  Note, this breakout will end with silver moving to $330 an ounce in the next year or two, this while gold moves to $3300 an ounce ($3300/$330 conservative estamate, and high estamate at $20,000/$2000).  I have silver to gold at 10/1.  Not sure where the cross will land, variables are gold(platinum)/dollar/oil.  It could be $10,000/$1000 or $3300/$330 for example, but 10/1 is the end result.  I also have the Dow Jones on par with gold.  This is all on a two year time line.

Once we hit that top ($20.92), I think it will pause for a few days, capitulate violently, and then continue up.  I have been waiting for this moment, and I think we are now on the doorstep.

Tue, 05/18/2010 - 17:52 | 359153 Almost Solvent
Almost Solvent's picture

Let the $100 gallon of gas commence!

Tue, 05/18/2010 - 13:56 | 358574 dcb
dcb's picture

all for transaction tax. just enough to make hft not work. it is insane. they pay these fools to run hft on their systems, so in effect they are paid to trade on an exchange. it costs me to trade, it should cost them. charge them two bucks a trade and watch how fast trading for two pennies a share is gone. a merket may have to actually move based on some economic rationale. not momentum computer algos.

Tue, 05/18/2010 - 14:18 | 358661 Spaceman Spiff
Spaceman Spiff's picture

Support the transaction tax at your own risk with these jokers instituting it.

 

Like the PTB are smart enough or care enough to distinguish between the small trader and these hft.   Anyone who trades is a fat cat to be beaten for political expediency.  

Tue, 05/18/2010 - 13:56 | 358577 sheeple
sheeple's picture

1.2266

Tue, 05/18/2010 - 13:58 | 358583 dcb
dcb's picture

silver and gold move down because of deleveraging. when most of the money in the market is borrowed this is what happens. it is why margin, leverage, must be limited in speculative markets. having hft leverage up is a market disaster and one of the main reasons for the collapse

Tue, 05/18/2010 - 13:59 | 358585 Xibalba
Xibalba's picture

Das ist wunderbar!

Tue, 05/18/2010 - 14:02 | 358601 Captain Obviousness
Captain Obviousness's picture

What is wrong with banning naked shorting?  It's fraud per se.

Tue, 05/18/2010 - 14:16 | 358654 steve3828
steve3828's picture

Isn't it already banned?

Tue, 05/18/2010 - 14:29 | 358715 Double down
Double down's picture

Yeah, Do not like what you see, close your eyes.

Tue, 05/18/2010 - 15:33 | 358912 Popo
Popo's picture

Yeah, but now it's double-secret banned.

Tue, 05/18/2010 - 14:29 | 358721 mikla
mikla's picture

Yes, naked shorting is bad, and already banned.  However, in this case, the regulation shuts down the naked CDS markets, and you will no longer be able to hedge against EU bonds.

Ooops.

Tue, 05/18/2010 - 14:09 | 358629 geminiRX
geminiRX's picture

Ok, if there is a flash crash today everyone keep their eyeballs peeled for odd stock prices (i.e. the ability to buy P&G for 1 cent a share). At 1 cent a share, I am game. The whole "NYSE won't honour the trade" is a sham. I heard there may be a class action lawsuit from the last flash crash on P&G. Did anyone get the opportunity to buy P&G during the last crash?

Tue, 05/18/2010 - 14:15 | 358652 faustian bargain
faustian bargain's picture

It'd be funny if everybody put in orders for hundreds of stocks at 1cent.

Tue, 05/18/2010 - 14:28 | 358708 geminiRX
geminiRX's picture

I should put an order in for Apple at this price. Harry would be proud of me.....

Tue, 05/18/2010 - 14:28 | 358714 Duesco
Duesco's picture

Do you mean funny "ha ha" or funny "omg where the hell did all of my market cap go"?

Tue, 05/18/2010 - 14:15 | 358650 Hawkeye Pierce
Hawkeye Pierce's picture

Zerohedge RULES if for no other reason than constantly quoting Walter Sobchak.

Isn't LIBOR OIS a great confidence builder for us shorties?
SHHH don't tell anybody about it.  It's rallying.

Tue, 05/18/2010 - 14:32 | 358716 bob resurrected
bob resurrected's picture

EU leaders need to hire a better PR firm or they are deliberately tanking the euro. Since I prefer to give people the benefit of the doubt, it must be deliberate. If they devalue quickly they can sell bonds easier where it settles? Guess I'll be greedy and wait a little to trade dollars for euros.

Tue, 05/18/2010 - 14:34 | 358737 trillion_dollar...
trillion_dollar_deficit's picture

Anyone else notice that the 10 yr is now under 3.40?

Tue, 05/18/2010 - 14:46 | 358776 What_Me_Worry
What_Me_Worry's picture

I publicly rescind any prior comments I have had on the Euro.  I did not think it was possible to have worse PR than what the EU has done lately.

US may have horrible financial policies.  However, you have to hand it to Bernanke's crew for managing it in the PR forum so well.

Tue, 05/18/2010 - 14:56 | 358798 EireWhiteTrash
EireWhiteTrash's picture

What happened to gold exactly when Lehman imploded? Explain...

So if Euro collapses, capital will rush to USD correct? USD Index will strengthen because it's weighted heavily on the Euro. So wouldn't this drop gold and silver for awhile? Until entire world realizes USD is shit? World will finally wake up the fact the Bernanke printed money like it was going out of style...then BAM! gold - silver to the moon when those US bonds implode.

 

 

Tue, 05/18/2010 - 15:32 | 358910 Spaceman Spiff
Spaceman Spiff's picture

Merkel to push for international transaction tax... sigh.

http://imarketnews.com/node/13621

 

Tue, 05/18/2010 - 15:32 | 358911 Spaceman Spiff
Spaceman Spiff's picture

Merkel to push for international transaction tax... sigh.

http://imarketnews.com/node/13621

 

Tue, 05/18/2010 - 15:33 | 358917 Goods
Goods's picture

Hey leo remember this?

Thanks for quoting me, and as far I can tell, calm is restored and the markets are heading up again. Not good for gold.

Tue, 05/18/2010 - 16:03 | 358970 BlackBeard
BlackBeard's picture

He's probably too busy attending to his margin calls.

Tue, 05/18/2010 - 16:07 | 358973 BlackBeard
BlackBeard's picture

.

Tue, 05/18/2010 - 16:07 | 358976 BlackBeard
BlackBeard's picture

.

Tue, 05/18/2010 - 16:11 | 358978 BlackBeard
BlackBeard's picture

.

Tue, 05/18/2010 - 16:27 | 358979 BlackBeard
BlackBeard's picture

.

Tue, 05/18/2010 - 15:46 | 358947 BlackBeard
BlackBeard's picture

And to think that I ALMOST covered @ around 1.25 ish....

Tue, 05/18/2010 - 17:24 | 359134 Arturo
Arturo's picture

It is an "undercover" devaluation folks. We want 1 EUR = 1.1 USD.

Tue, 05/18/2010 - 19:19 | 359352 Buck Johnson
Buck Johnson's picture

I think the Germans smell another Lehman Brothers out there and are getting ahead of the curve.  Something doesn't feel right in the market and it almost has a feeling that somebody told the truth and others are getting whispers about the truth and are running to protect against Lehman II.

Tue, 05/18/2010 - 20:49 | 359510 boeing747
boeing747's picture

I'm thinking same like Eire but will buy Gold by the end of this year or start of next year, meanwhile I'm preparing a shopping list for German made tools now I may finally afford.

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