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Midnight Run To Cover

Tyler Durden's picture




 

It is early in the Asian morning session and the mood is decidedly like that in late September, early October of 2008, when every day felt like it could be liquidity's last. And while we have long discussed that the "liquidity"situation in equities is laughable, with May 6th confirming our concerns, tonight we are seeing, for the first time, the evaporation of liquidity from the FX market, where tight bid/ask spreads are needed for proper market functioning. The EURUSD and EURJPY as well as various cable pairs are plunging, taking out massive 10 pip steps lower with every block, something unseen since the Lehman collapse. Furthermore, with funds anticipating something, anything out of Europe this weekend after the major move down in the euro last week, and the disappointing silence out of both Brussels and Luxembourg, the EUR will likely test the next support of 1.18.

The much more critical for American stocks EURJPY pair is also getting trounced as "risk off" is now on.

And with realized vol exploding to weekly changes not seen in over one year, last week's rumors of massive carnage as the key FX desks are becoming ever louder. We would not be surprised if tomorrow we discover that a liquidity crisis has struck at some major hedge funds and prop desks. Surely, the implosion of a TBTF FX desk would only make the Volcker case that much stronger.

It appears that tonight the LBMA is too busy with putting out other fires than to worry about a surging gold. At last check it was back on its way to retest $1,250. So the very same conditions that pushed gold higher today, were responsible for it plunging on Friday... The intervention (and lack thereof) is just getting far too blatant.

As for index futures, we won't bother you with those as we expect the Liberty 33 night shift to take over around 3 am and to make a spirited attempt at a green open. However, for now everything is solidly 1%+ down. So much for that 1,000 point/limit up bounce on the European "bailout."

 

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Mon, 05/17/2010 - 00:44 | 355804 HFT1
HFT1's picture

About 15 pips from flash crash levels in AUD/USD. No fat finger trade here, just short risk accross the board. The last 3 or so Sundays have seen a gap up in risk not so today. I agree team PPT will be active in the early morning hours...

Mon, 05/17/2010 - 00:48 | 355809 geminiRX
geminiRX's picture

I am glad I'm out of this mess. I don't have the stomach for it. I hope they can save these markets - because if they don't, it will be mass slaughter. I would love to participate in markets again, but I won't until governments get their spending in check and valuations become more realistic

Mon, 05/17/2010 - 00:52 | 355815 Implicit simplicit
Implicit simplicit's picture

Remeber the anti-Cramer "short, short, short"

Mon, 05/17/2010 - 01:05 | 355827 chumbawamba
chumbawamba's picture

Anyone who's in gold and silver is "out of this mess".

Good luck, All.

I am Chumbawamba.

Mon, 05/17/2010 - 01:48 | 355872 ConfederateH
ConfederateH's picture

Not only are they out of the mess, they are doing their part to put an end to farce.  Gold, the one true WYSIWYG.

Mon, 05/17/2010 - 02:59 | 355926 Gordon_Gekko
Gordon_Gekko's picture

Yup. Gold holders are almost chuckling as they watch this circus play out.

Anything you don't have in physical Gold will burn. 100% physical Gold is the ONLY way to go.

Mon, 05/17/2010 - 04:05 | 355961 akak
akak's picture

No silver or platinum at all, Gordon, not even a little?

What can I say --- I like white AND yellow!

(Although admittedly, platinum is more grey than white.)

Mon, 05/17/2010 - 04:40 | 355974 Popo
Popo's picture

Gold and Silver holders are "out of this mess"?

Please just stop the preaching.

Disclaimer: I hold a significant amount of gold and silver.

I have been a gold and silver investor for almost 20 years, and what *terrifies* me right now is the number of newbie investors in metals who think they've found a surefire answer. Only a fool would rest his laurels on the metals market. Am I long metals? No way. (I do like gold and silver very much however). I am the definition of loose hands, and that doesn't come from lack of conviction. That comes from experience my friend. The powers that be are very big, very dangerous and very, very scared. The only thing more dangerous than a starved, caged dog, is a room full of starved, caged, 1200 lb. gorillas.

Metals are a dangerous, slippery beast. And if you think you "know" the short term vector within 50% percentage points, you are by definition a 'neophyte'. There are way too many people clinging to gold and silver out of a quasi-religious belief in their 'power'. It's important to recognize that 'power' frequently comes with a white-knuckle ride that tests the metal of even the most seasoned investors.

A drop in liquidity is a deflationary event. It does not, in any way bode well for metals in the near term.

Will I bail out on my gold and silver? No. Not yet. But is a collapse of 30% of the PoG possible? Hell yes. Extremely possible. Is a spike also possible? Hell YES. Also extremely possible.

Recognize the danger people. If you're not a seasoned investor, Gold and Silver are *NOT* safe havens. Go look at a historic chart and just try to call that massive volatility "safe".

I like metals right now. But there are way too many noobs here who will either hang on too long, or get crushed by the riptide of unexpected short term drops.

You're hardly "out of this mess".

My 2 cents...

Mon, 05/17/2010 - 05:04 | 355982 Noah Vail
Noah Vail's picture

Your comments identify you as a speculator, not an investor. metals won't go to zero, currencies can and will. If you are happy in paper, great, the rest of us are terrified of it.

Mon, 05/17/2010 - 05:25 | 355985 Popo
Popo's picture

Right. That sounds suspiciously like an ad hominem attack.

By the way, I never, at any point said I was "happy in paper". Did you make that up?

I'm also glad you responded with your "the rest of us are terrified" comment. It's nice to be engaged in a dialog with the person who apparently speaks for the entire board. ...Or is the groupthink here really that dense? (Don't answer that... I know. Hence my concern.)

You're attempting to place me on the opposite side of the gold silver argument because my beliefs don't sync perfectly with yours. As I said, I like metals.

My point -- my sole point -- is that volatility is guaranteed to be *massive* within metals prices in the near term. I don't think most new investors realize this.

By the way, the term for one who buys and sells is a "trader". Your comments identify you as someone who will be taken to the cleaners the next time the big fish do the latter.

Mon, 05/17/2010 - 05:40 | 355992 Escapeclaws
Escapeclaws's picture

Thanks for your two cents, Popo. I've been regretting that I did not just buy and hold gold when it was at $600--$700. I can't bring myself to buy gold when it is ascending vertically like a rocket. People like GG should come out and say what their average cost of gold is before recommending to fools like me to get in at current prices. If you bought your gold at $300 you can be quite comfortable watching its gyrations around $1200. What has kept me from staying in gold is precisely my refusal to take losses greater than 5%. Instead of just saying buy gold, the goldbugs should be saying, buy it at $1250, can't lose! These goldbugs are going to lose their popularity and their sheen when they've misled people into buying gold at inflated prices before a big collapse. At least people should be position sizing their purchases, looking at the downside risk as well as the upside. Get a copy of Van Tharps book and learn position sizing before you commit to any investment!  Twisting the words WB Yeats, "Cast a cold eye on gold, on silver/ Horseman pass by!"

Mon, 05/17/2010 - 07:13 | 356023 WaterWings
WaterWings's picture

If there is a big collapse PMs won't even be priced in Federal Reserve Notes. Up 50%, then down 50%. It's a shame if they couldn't have acquired more because of timing, but for the little guy investing in anything else these days is like 100 mph, 50-lane Frogger.

Mon, 05/17/2010 - 08:38 | 356071 trav7777
trav7777's picture

Take losses > 5%??  Don't hold FRNs.

There is no petrodollar hailmary to save the FRN this time.  Gold at this point is not an investment, it is an attempt to translate paper into physical assets.  Anybody looking to "get rich" as opposed to conservatively preserve wealth with PMs at this point is a fool.

Mon, 05/17/2010 - 08:47 | 356078 Absinthe Minded
Absinthe Minded's picture

I can't say I blame you Escape. I got in when it was around $900 and I only bought a little for insurance. Personally I think Silver is a better bargain right now and have been buying on the dips, thank you JPM. Like any other investment, it's gambling and you should only invest what you can afford to lose. I don't know what is going to happen to it, I don't think anybody really has a clue, although many claim to. I know that if gold drops to $900 an oz. again I'll be thinking long and hard about whether I should buy the dip or get out before I lose my shirt. Unfortunately knowing the volatility of it I won't have a chance. I know a lot of the goldbugs are positive it isn't going anywhere but up, and with the money printing going on it seems like a sure bet. I just don't know, this world has become so volatile.  

Mon, 05/17/2010 - 11:16 | 356311 Hephasteus
Mon, 05/17/2010 - 08:26 | 356065 cossack55
cossack55's picture

LIFE is a good definition of volatility.  Have had silver for 45 years and the better looking half demands gold in the form of bangles.  So be it.  She is happy, I am happy.  The markets may do what they wish.  I shall rejoin after the collapse only if the goobermint is destroyed.

Mon, 05/17/2010 - 07:34 | 356034 FischerBlack
FischerBlack's picture

I have quite a bit of physical gold and silver, too. But it's not going to be enough to get me through a real collapse. There's really only one thing that will get you through a collapse and that's *income*. You better have a skill that people will pay you or barter with you to use. Dentist? People will trade lots of good stuff to fix tooth pain. Farmer? You'll be the nouveau riche. Obstetrician or midwife? There will always be babies to deliver. Angler? Trapper? Prostitute? Surgeon? Storyteller? Gold is good, but few individual speculators have enough to survive for very long. 

 

Mon, 05/17/2010 - 08:42 | 356074 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Thanks Fischer. I wish more people realized that. Having experienced living thru Hell in former Yugoslavia, I can assure you that for some time, it was very hard to do anything with gold. Skill and barter was required. If you are "terrified" of a Armageddon scenario, you do yourself a HUGE favor by stocking up your own personal stash and THEN a barter stash. I promise you that barter will be much more important. Even when things got slightly better it was still difficult to get someone to take gold for a long time.

Anyway, gold is good but if you starve or get robbed in the short term, well, it won't provide a great deal of comfort.

 

 

Mon, 05/17/2010 - 09:11 | 356100 Absinthe Minded
Absinthe Minded's picture

Being an electrician I hope there is a need for my services. I'd hate to have to learn how to make solar powered inverters, but if that's the future, so be it.

Mon, 05/17/2010 - 10:12 | 356186 WaterWings
WaterWings's picture

Recharging car batteries for people so they can power an LED light at night instead of going to bed early like most of human history.

Sell the LEDs, inverters for high-drain appliances, etc. Imagine sources of electricity other than the grid: stationary bicycles, wind, solar, even steam. Expect distruptions in availability - long term - our infrastructure is crumbling. All very small scale but being able to recharge some AA to power a flashlight or radio will be highly desireable in a breakdown/prolonged depression we cannot avoid.

Mon, 05/17/2010 - 05:49 | 355993 kitty
kitty's picture

I hear more people talk about buying physical gold as insurance against paper as opposed to buying gold as an investment. With more and more people buying/hoarding gold these days, I wonder if Obama will outlaw the private ownership of it as one of his heroes, FDR, did in 1933?

Mon, 05/17/2010 - 10:49 | 356250 JW n FL
JW n FL's picture

Your Vote for Bush caused this... you are the Sheepeople, you are the ignorant Cancer that has caused this once great Nation to faulter... now go paint up a pro-life picket sign and do what you Love.

 

 

Mon, 05/17/2010 - 11:57 | 356392 DoChenRollingBearing
DoChenRollingBearing's picture

-1

Boy, that was mean spirited.

Mon, 05/17/2010 - 07:24 | 356027 Stormdancer
Stormdancer's picture

People that dare to make gold their numeraire instead of measuring wealth in fickle, unstable, manipulated fiat currencies quickly discover that their purchasing power has increased almost across the board the past decade.  If they have any gold or silver that is.  Of course (wildly increasing) volatility is likely in our future...if you care about how much currency your gold will buy.  I don't.  I care about how much energy, wheat, water or labor it will buy.  I also hope newer entrants to the precious metals will realize that volatility is going to be part of the scenery in increasing and sometimes gut wrenching measure and not be prematurely shaken out of their insurance by any of those "unexpected short term drops"....for "short term" they shall be.  But then, anyone who has been around PM's for awhile knows that PM's are wont to hand out 30% haircuts now and then...such events shouldn't be "unexpected".  Judicious use of paper hedges of physical positions at high technical risk junctures can be of great value...

Tue, 05/18/2010 - 09:25 | 357889 chumbawamba
chumbawamba's picture

Yes, we will have volatility, as in the past.

However, someone please tell me into what currency people will flood that will cause gold to fluctuate wildly to the downside?

What currency?

Being as there is none, and nothing on the horizon would indicate anything is coming, it is pretty silly to think that gold is anything but the safe haven that it is.  It is a wealth preserver.

And people who think it's the be-all and end-all also don't know what they're doing.

Gold, guns, garden.

Those who've been around long enough know that I've always prescribed all three in equal measure.  Better have it all or else you're wasting your time (but at least you'll have gold).

I am Chumbawamba.

Mon, 05/17/2010 - 08:21 | 356060 cossack55
cossack55's picture

Hey chumb, looks like you have some autojunkers tracking you.

BTW, Ayn Rand:  A man who thinks cannot be ruled.

Mon, 05/17/2010 - 01:52 | 355879 ApplesConspiracy
ApplesConspiracy's picture

You can't spell "slaughter" without "laughter"

Mon, 05/17/2010 - 02:24 | 355908 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

Schadenfreude?

Mon, 05/17/2010 - 02:26 | 355910 akak
akak's picture

And you can't spell "crap" without "rap".

That has no connection whatsoever to your comment --- I just like saying it, because of course it is true.

Mon, 05/17/2010 - 00:51 | 355813 John Law
John Law's picture

Futures down over 1%. If melt-up Monday doesnt occur as normally scheduled, it could get really ugly, really fast. It's time guys. Be prepared and enjoy the show and buy what ever gold and silver you can now.

Mon, 05/17/2010 - 01:21 | 355838 hognutz
hognutz's picture

Don't forget your lead too!  ;-)

Mon, 05/17/2010 - 01:49 | 355874 jedwards
jedwards's picture

Meh.  I'm sure the markets will be in the green by the end of tomorrow.  At some point tomorrow we're going to hit a reversal, just not sure at which point it will bounce, maybe after a really strong move down to S2 on the SPX.  People are looking for a reason to juice this market, so many people are on the downside (me included).  If we see a reversal overnight and we're in the green before the NY open, then we know it's going to be a green OPEX week.

Mon, 05/17/2010 - 00:53 | 355817 Fraud-Esq
Fraud-Esq's picture

$70,000 paid 1M in February FX if you called US-Euro parity. wow. The money you can make in currency if you move these markets is incredible. 

Didn't someone think the US FX swaps deal with ECB would prop the Euro till Fall? Doesn't seem to be helping. 

Mon, 05/17/2010 - 00:58 | 355818 chindit13
chindit13's picture

The lack of solution or concern---I'm not sure which---was evidenced on the Fareed Zakaria show that also carried the G-Pap interview.  In the panel of D. Strauss-Kahn, Christine LaGarde, a lump of flesh who surname is the season of our discontent, and some self-congratulatory Singaporean bureaucrat who is clueless about how dependent his corporate monarchy is on unlimited Chinese bank credit, there was almost a total lack of concern about the ongoing market instability, as if it was still December 2006.  Frankly, I found it shocking;  they didn't even pretend there could possibly be any trouble on the horizon.

I think reality is about to do some major arse biting on the whole lot.

Mon, 05/17/2010 - 05:09 | 355983 Noah Vail
Noah Vail's picture

Yeah, I saw about sixty seconds of that, was all I could take. I especially love the transistion from talk about recovery now to growth. Recovery is a done deal, now its on to the next bubble. Nauseating.

Mon, 05/17/2010 - 07:47 | 356039 moneymutt
moneymutt's picture

I work in construction, and sometimes have to tell guys how they built something is totally wrong and likely to fail. Some guys, after I walk them thru carefully how wrong things are, how bad things could be if the fail, and demonstrate to them I am not a chicken little as I have seen similar builds fall, they then accept what I am saying and rebuild. They are depressed, but they realize a failure is very likely and realize a rebuild is much less worse than a failure. Then there are the other guys who built things wrong but cannot IMAGINE that something could ever fail. They have not good reasons to think their construction is stable, no arguments on their side, other than they can't conceive of a failure, they have never seen one, they have never methodically accounted for the forces on their structure versus the structure's strength. They have never had a failure, they have not seen one, so they must not exist. And then failure comes. If a guy has built something, had it fail, and survived to continue to build, they are the best builders, as they will not take short cuts, they know that any moment they could bite you. They want to sleep at night, and they know enough not to sleep well if they do anything not right.

Problem is, we have a whole world of people that can't conceive of failure because everything has been rosy their whole career and they are unwilling won't take a sober look at how the numbers add up. So the building is cracking, moving, making weird noises..."I'll just put a brace here or there, because buildings don't fail, never seen it, never could happen"

By the way, you still in Bangkok?

Mon, 05/17/2010 - 09:53 | 356160 RockyRacoon
RockyRacoon's picture

Fareed managed to have a "discussion" with 4 people who generated NO repeatable sound bites.  Summers was about as bland as I've ever seen him.  What a waste.  There were many questions that could have been asked, but weren't.  It was like watching paint dry.

Mon, 05/17/2010 - 00:59 | 355820 Number 156
Number 156's picture

Lets see...

Greece domino is falling...                   check,

Greece preparing to sue US banks...      check,

Bankers about to get the Volcker rule...   check,

Jiffy Pop in my kitchen pantry,             check.

Mon, 05/17/2010 - 01:49 | 355875 Fish Gone Bad
Fish Gone Bad's picture

This mess took a while to build up, it will take a while to unwind.  I have a case of popcorn set aside.

Mon, 05/17/2010 - 02:21 | 355898 Number 156
Number 156's picture

Meanwhile, there are a few webcams out there that are worth watching:

Bangkok:

http://jvc.thaniya.tv/  --An internet cafe near the beleaguered neighborhoods. You can see military and police patrolling outside.

http://webcam.ose-software.com/         (not much to see here...)

http://www.bkkok.com/webcam/ccam.jpg   --Almost at ground zero...

Greece:

http://www.grandebretagneview.com/  --Theres two cameras here, Acropolis cam and Parliment cam. I was watching hell break loose on the Parliament cam last week.

http://www.webcams.travel/webcam/1216135541-Weather-Webcam-Temple-of-Oly...  --more Greece cams on that one.

Mon, 05/17/2010 - 10:53 | 356257 JW n FL
JW n FL's picture

Nice... Thanks for the quick cam post.

Mon, 05/17/2010 - 00:59 | 355821 DoChenRollingBearing
DoChenRollingBearing's picture

O/T, but it is after midnight...

A couple or so days ago, a kind poster provided the ZH community the recipe of one of Hemingway's favorite cocktails "Death in the Afternoon".

I have my own variation:

"Death After Midnight"

5 parts Stoli berry flavored vodka, 1 part absinthe

So, if I start writing gibberish soon (like Bravo & yip), well, it was the absinthe talking, not me!

Mon, 05/17/2010 - 01:12 | 355832 chumbawamba
chumbawamba's picture

In my case it's almost always the weed talking, but then that's what makes me so interesting ;)

I am Chumbawamba.

Mon, 05/17/2010 - 01:30 | 355847 Trial of the Pyx
Trial of the Pyx's picture

yeah chumba...we know

 

he drinks a whiskey drink, he drinks a vodka drink

he drinks a cider drink, he drinks a lager drink

Mon, 05/17/2010 - 01:33 | 355851 TheSettler
TheSettler's picture

ooowwwwwhhhhhh......but..oooowwwhhhh...
just one more hit....ooowwwhhhh..ok

your turn....

Mon, 05/17/2010 - 01:34 | 355853 dumpster
dumpster's picture

chumbawamba  talking with both hands ,, weaving   lol

Mon, 05/17/2010 - 01:34 | 355854 thesapein
thesapein's picture

I'll smoke to that.

He is Chumbawamba.

Mon, 05/17/2010 - 01:35 | 355855 DoChenRollingBearing
DoChenRollingBearing's picture

He be the Chumbawamba!

Just in case any of MY comments sound like JB, yip, et al, well it was the absinthe talking...

Gold everyone!  Your last best hope...

Further commentary from the bearing likely tainted by the absinthe.....

 

Mon, 05/17/2010 - 01:52 | 355877 ConfederateH
ConfederateH's picture

I hope you have a medical permit for that!  If not, claim you are suffering from burn-out.

Mon, 05/17/2010 - 10:18 | 356191 merehuman
merehuman's picture

Dont bogard da joint man. The junk man must really like you.

 

Mon, 05/17/2010 - 01:37 | 355859 dumpster
dumpster's picture

Do-Bearing

tip a vodka a little twist and ice ,,

 

no part abstinence

Mon, 05/17/2010 - 02:18 | 355905 DoChenRollingBearing
DoChenRollingBearing's picture

Abstinence my ass!

Getting hard to write what with the vodka & absinthe laced (from the freezer with frozen glass)...  Look out if wankery gibberish comments come from me...

I will watch Monday & everyday with intense interest in the coming week.

Thanks be to the higher power I have lots of Au, Pt and Ag.

Mon, 05/17/2010 - 09:24 | 356115 Absinthe Minded
Absinthe Minded's picture

How the hell are you still conscious after midnight after that concoction? I prefer New Amsterdam(gin) and Schweppes tonic but Absinthe is now available here and is on my list to pick up at the NH liquor store this week. Fearing we may be on the brink here. Knowing that the sooner the whole ponzi comes crashing down the better, but still wishing it didn't have to happen with my kids at 8 and 13.  

 

 

Mon, 05/17/2010 - 05:11 | 355984 Noah Vail
Noah Vail's picture

Hemmingway was also fond of eating bullets.

Mon, 05/17/2010 - 00:59 | 355822 HFT1
HFT1's picture


5/16/2010 20:10 0.00 3008206 GBP 1.44604 5/19/2010 USD Sell   5/16/2010 20:17 0.00 3008826 AUD 81.461 5/19/2010 JPY Sell   5/16/2010 20:27 0.00 3009913 AUD 81.329 5/19/2010 JPY Buy   5/16/2010 20:33 0.00 3010267 EUR 113.681 5/19/2010 JPY Sell   5/16/2010 20:33 0.00 3010267 EUR 113.681 5/19/2010 JPY Sell   5/16/2010 20:39 0.00 3010608 EUR 113.817 5/19/2010 JPY Sell   5/16/2010 20:52 0.00 3011315 EUR 113.88 5/19/2010 JPY Sell   5/16/2010 21:33 0.00 3013223 GBP 1.44041 5/19/2010 USD Buy   5/16/2010 22:40 0.00 3022392 CAD 88.259 5/19/2010 JPY Buy   5/16/2010 22:40 0.00 3022473 EUR 112.796 5/19/2010 JPY Buy   5/16/2010 22:47 0.00 3023113 EUR 112.877 5/19/2010 JPY

Buy

just 273 pips tonight notice short risk PPT cant run FX

 

 

 
Mon, 05/17/2010 - 01:20 | 355836 hognutz
hognutz's picture

It's going to be ugly today!!

Mon, 05/17/2010 - 03:27 | 355943 Mentaliusanything
Mentaliusanything's picture

Butt Ugly - and you can only hold it in so long.

Tissues anyone. 

 

Mon, 05/17/2010 - 01:32 | 355848 Oh regional Indian
Oh regional Indian's picture

11 am here in India and the whore/slave to Foreign Institutional Investor market had an ugly, down 400 points (just shy of 2.5 %) opening.

But we have our own version of the PPT, these losses will be made up, you can count on that, but can't trade on it.

Mon, 05/17/2010 - 01:40 | 355861 Gold...Bitches
Gold...Bitches's picture

Just dont buy any of those paper gold etfs they are peddling in India now.  Good luck over there.

Mon, 05/17/2010 - 03:30 | 355947 Oh regional Indian
Oh regional Indian's picture

Could not stay farther away if I tried.

At least in the world of finance, it is a flat flat flat world.

Same shit (like ETF's) everywhere, just different language.

Actually in India, not even a different language!

Hah! Jolly good I say!

Pip pip!

What was that, a 100 Pips?

Mon, 05/17/2010 - 01:55 | 355884 whatsinaname
whatsinaname's picture

dont count on it. check trendline for sensex at www.chartsrus.com

sensex will end at 4000 at some not too distant point in future. spike started after 1982 - alongwith 401k programs in USA.

Mon, 05/17/2010 - 03:33 | 355950 Oh regional Indian
Oh regional Indian's picture

Yup.

It is a rigged and juiced market.

Rig, juice, pump, dump is the Asian version of Wash, rinse, repeat..... on a longer time scale.

We've been had! Bad!

Mon, 05/17/2010 - 01:32 | 355849 Trial of the Pyx
Trial of the Pyx's picture

good grief

 

keep an eye on the TED spread

Mon, 05/17/2010 - 11:01 | 356278 Hephasteus
Hephasteus's picture

It reminds me too much of flexi-porn.

Mon, 05/17/2010 - 01:34 | 355852 lizzy36
lizzy36's picture

good thing we decoupled from europe last week (according to the brain trust of pisani and leisman).

Mon, 05/17/2010 - 01:37 | 355860 RobotTrader
RobotTrader's picture

87 cleared with ease...

All those guys like Peter Schiff, Marc Faber, Axel Merck, who predicted the demise of the U.S.Fiatsco....

They must be puking up blood....

 

Mon, 05/17/2010 - 01:42 | 355864 abalone
abalone's picture

At least Prechter got that one right..DXY looks strong for now

Mon, 05/17/2010 - 01:44 | 355867 dumpster
dumpster's picture

the buck is about as strong as a wilted leaf next to a dead dried pile of poo

Mon, 05/17/2010 - 01:52 | 355878 abalone
abalone's picture

Around 10% in a month seems ok

Mon, 05/17/2010 - 02:09 | 355899 repo 105
repo 105's picture

It's been a nice ride for me too.

Mon, 05/17/2010 - 03:01 | 355927 Gordon_Gekko
Gordon_Gekko's picture

That still doesn't make up for his HORRIBLE record on Gold. Good luck Prechterites.

Mon, 05/17/2010 - 01:42 | 355865 dumpster
dumpster's picture

the buck is not going up it just seems that way

the boats have large holes ,, the euro larger

they are both going down

Mon, 05/17/2010 - 02:15 | 355902 Burnbright
Burnbright's picture

Robo I know for a fact that both Peter Schiff and Marc Faber stated that the dollar would go back up in nov 2009. They weren't shorting the dollar, I think Faber and i know for sure Rogers went "long" the dollar when they called for a rebound off its lows.

 

Mon, 05/17/2010 - 08:03 | 356049 moneymutt
moneymutt's picture

I saw Schiff speak in Aug 08 and he was saying get out of dollar, talking about how expensive consumer goods would be, if you didn't have a lot of money, you should just buy things, imported good would be very expensive....Schiff had some things right, but he did not see dollar getting strong versus other currencies when the SHTF. Many others saw what Schiff saw and also realized that, at least initially, dollar would strengthen via other currencies and dollar would buy more as assets deflated. Mish is one guy the comes to mind, predicted bubbles, knew dollar would buy more, not less, and also liked gold....

Mon, 05/17/2010 - 14:46 | 356717 Burnbright
Burnbright's picture

My point to Robo was simply that neither Peter or Marc are shorting the dollar. I am just tired of Robo bashing these guys, especially Marc Faber who makes amazing market calls. If I even understood how to play around with FX swaps or trade stocks I would just listen to him, he has a great capacity for understanding market sentiment.

But your right Peter Schiff is always bearish on the dollar, but he thinks it is worthless regardless of what the DXY is at, that still doesn't mean he hasn't been accurate about the fact it would rebound or not. He simply refuses to invest in something that he believes is eventually a losing bet.

And that is something I can agree with, for example Marc Faber suggested back in march 2009 that penny stocks would see the largest % gains simply because they were the cheapest so it wouldn't take much volume to run them. And of course it did happen where some were run up 400% but would you really want to bet on an insolvent company that has been taken over by the government and has negative equity? Makes no sense from an "investment" strategy.But far be it from Robo from understanding the difference between investment and day trading.

Mon, 05/17/2010 - 09:14 | 356103 Hulk
Hulk's picture

Rogers also went long the euro, a position he is very nervous about. In fact, he is nervous now about all western currencies. A current bloomberg interview with rogers is at dollarcollapse.com and is well worth the watch

Mon, 05/17/2010 - 14:59 | 356749 Burnbright
Burnbright's picture

I think he is nervous because he bought in too early,it should bounce back here soon I would imagine. Euro seems oversold especially with the massive shorts going on, there will be a short squeeze coming soon and it will be negative for the dollar. Gold will be flat and then pushed higher once the dollar gets beat back down to make all time highs again.

Mon, 05/17/2010 - 02:18 | 355906 Matto
Matto's picture

Dont mistake "error" with "different time horizon"

Mon, 05/17/2010 - 04:17 | 355913 akak
akak's picture

"87 cleared with ease...

All those guys like Peter Schiff, Marc Faber, Axel Merck, who predicted the demise of the U.S.Fiatsco....

They must be puking up blood...."

Says the US dollar in reply:

"Reports of my health have been greatly exaggerated."

Mon, 05/17/2010 - 06:26 | 356001 Ned Zeppelin
Ned Zeppelin's picture

King Dollar! Last Fiat Currency Standing with lots of guns wins!

Mon, 05/17/2010 - 02:42 | 355918 Dr. Acula
Dr. Acula's picture

What is "dollar index"? What about $/gold?

Mon, 05/17/2010 - 03:03 | 355928 Gordon_Gekko
Gordon_Gekko's picture

The dollar index is a horribly flawed way of measuring dollar "strength". It's like the slowest sinking ship out of a bunch of other sinking ships.

Mon, 05/17/2010 - 04:13 | 355932 akak
akak's picture

I cannot agree strongly enough with you regarding the Dollar Index, Gordon!

Any time somebody trots out that misleading index as some kind of proof, or even to imply, that the dollar is actually rising in fundamental and absolute value (the number of which occasions are legion), I instantly dismiss that person as nothing more than a disinformation-spreading shill for the banksters and corrupt financial establishment.  Or just a fool.  Or, in the case of the CNBC Muppets, both.  But I digress.

If you and I are both in separate sinking rowboats, and yours begins to sink even faster than mine, does that automatically mean that mine is therefore starting to rise out of the water?  That is the "logic" of the US Dollar Index, in which sinking fiat currencies are all defined only in relation to each other.

I am reminded of an old and somewhat famous (in such circles) science fiction story from the 1930s, in which a man finds himself transported to a parallel universe and world very much, but not quite, like his own.  While there, a war erupts over the patriotic slogan, utterly cryptic to the visitor, of "The Gostok Distims the Doshes!". Confused and mystified by this, he asks people around him in that parallel world what a Gostok is, and is told "Why, the Gostok is the Distimmer of the Doshes!".  Then asking what the word "distim" means, he is told "That is what the Gostok does to the Doshes!".  Further asking what the Doshes are, the answer is "They are what the Gostok distims!"

That slogan, to me, is analogous to the inherent logic (sic) of the US Dollar Index --- a daisy chain of circular definition of the "value" of our fiat currency only in relation to other, simultaneously-depreciating fiat currencies, with no reference to any outside objective or absolute value or fixed point. As far as I can see, it has little or no relevance outside of the short-term foreign exchange trading arena.

Mon, 05/17/2010 - 04:31 | 355971 Oh regional Indian
Oh regional Indian's picture

The dostok...etc,,,

Priceless and so apropos of our "interesting" times.

Round and round she goes, the logic train.

Mon, 05/17/2010 - 05:54 | 355994 Miss Expectations
Miss Expectations's picture

...or

Round and round she goes, the logic drain.

Mon, 05/17/2010 - 08:29 | 356067 Oh regional Indian
Oh regional Indian's picture

Is that a giant gurgling sound you hear?

Mon, 05/17/2010 - 11:09 | 356298 Hephasteus
Hephasteus's picture

Oh noes. It's clogged with banker hair.

Mon, 05/17/2010 - 10:03 | 356171 RockyRacoon
RockyRacoon's picture

Had to look that one up, Akak.

The phrase was coined in 1903 by Andrew Ingraham  but is best known through its quotation in 1923 by C. K. Ogden and I. A. Richards in their book The Meaning of Meaning (p.46). Ogden and Richards refer to Ingraham as an "able but little known writer", and quote his following dialogue:

    "Suppose someone to assert: The gostak distims the doshes. You do not know what this means; nor do I. But if we assume that it is English, we know that the doshes are distimmed by the gostak. We know too that one distimmer of doshes is a gostak. If, moreover, the doshes are galloons, we know that some galloons are distimmed by the gostak. And so we may go on, and so we often do go on."

In Amazing Stories, Dr. Miles Breuer wrote a story, now considered a classic, titled "The Gostak and the Doshes". Other writers have picked up on the reference, notably David Gerrold.

http://en.wikipedia.org/wiki/Gostak

Mon, 05/17/2010 - 03:40 | 355952 godfader
godfader's picture

I remember the dollar bears (Merck, Schiff etc.) were happily using the DX to highlight USD weakness. On the way up however they keep pointing out how the DX is not really a good measure and it's not USD strength but "just the other currencies being so weak". Talk about cherry picking.

Mon, 05/17/2010 - 03:53 | 355958 Burnbright
Burnbright's picture

True enough, but most people like Schiff have stated that gold is the ultimate dollar indicator.

I do agree though, you can't really say that an indicator only works when it works in your favor.

Mon, 05/17/2010 - 08:55 | 356086 tmosley
tmosley's picture

At the time, China was the only other nation debbasing its currency.  Now, everyone is.  That is the difference.  If you can't see that, then enjoy your ongoing loss of purchasing power.

Mon, 05/17/2010 - 05:01 | 355981 nevadan
nevadan's picture

Or put another way, it is the best looking horse in the glue factory.  :)

Mon, 05/17/2010 - 10:06 | 356175 RockyRacoon
RockyRacoon's picture

The leper with the most fingers?

The tallest midget in the room?

More?

Mon, 05/17/2010 - 13:20 | 356564 Hephasteus
Hephasteus's picture

The only way to sell a car without an engine is to compare to a car without an engine or doors.

Mon, 05/17/2010 - 08:48 | 356079 tmosley
tmosley's picture

Only if they can't tell fantasy from reality.  I know Schiff isn't short the dollar.

When you're skydiving without a parachute with friends, does the person who goes splat last win?  If so, what exactly do they win?  Other than all the dirt they can eat and a free ride in a box.

Mon, 05/17/2010 - 01:47 | 355870 doggings
doggings's picture

I doubt it, they weren't talking about short term trading cycles, theyre talking fundamentals, and longterm the $ is every bit as fucked as the Euro, just a little further down the road.

 

Mon, 05/17/2010 - 01:49 | 355873 FitBusinessman.com
FitBusinessman.com's picture


Shall we start the countdown? 1.2279 @ 1:46am

It isn't that USD is strong...it's that it's rate of death is slightly slower.

Mon, 05/17/2010 - 01:50 | 355876 MisesFTW
MisesFTW's picture

They both are going down but at least we can ride it down and make some money,toilet paper, that we hope to spend before there is too much poo on it.

It'll be interesting to see if cheeky is right.

FED needs a WEAK dollar to keep the interbank rates low and borrowing rates, in general, low

the only two ways it can achieve that is either by government issuing new debt on top of the projections, which are in themselves understated. That is a no go simply because the potential of a failed auction is to high. Secondly it can drown the market in new dollars which are not new dollars, but the ones that already exist and swap them for EUR, GBP, JPY, CHF. Furthermore; since there is much more euros on the market it is easier to, lets say, iceberg 1 trillion bucks into 100 [probably more, say even distribution over 105 days] orders and slowly push the eur up and mimicking it as a normal market action. The best time to do such a trade is when there are fewer market participants since the lower volume of currency traded allows the higher variability in the actual execution of the trade, ie, summer. also other swap counterparties may not notice since it will not be shown as anything unusual. Also engage in enough swaps with BOE to keep the exchange within 200 MDA and further mask the trade.

It really is that simple, and to achive parity FED only needs to evenly swap so that EUR/GBP diverge until parity which may come as early as September. Keeping the $ and 1.43xx and < 1.45xx-1.50xx should be no problem. This set of moves frees existing capital which is now hiding in low exchange rates. USD needs inflows as much as the next country and 1.43xx EUR would both benefit EMU debt management and projected austerity measures and create new volume of available dollars which would flow towards US assets and markets. Bernanke simply can not allow deflation, if deflation, GAME OVAH.

Its that simple. And so it will be done. You can bookmark this comment and post in 4 months again and if i am wrong i will never post another word on ZH, or anywhere else.

---Zero Hedges famous Cheeky B.

Mon, 05/17/2010 - 01:57 | 355886 whatsinaname
whatsinaname's picture

what happens if ash mixes with light sweet crude ?

Mon, 05/17/2010 - 02:45 | 355922 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

You wind up with petroleum product up your ash?

Mon, 05/17/2010 - 04:51 | 355978 Oh regional Indian
Oh regional Indian's picture

I think it's called VAshline!

Mon, 05/17/2010 - 02:00 | 355890 HFT1
HFT1's picture

George Papa says Greece is a good investment. Rumour of Japanese rating cut but denied by Fitch, just stirring up crap so eur/jpy does not IMPLODE tonight

Mon, 05/17/2010 - 02:01 | 355892 Fraud-Esq
Fraud-Esq's picture

The economic hit men are working Thailand. CDS spreads up. One more.... not so safe. 

Mon, 05/17/2010 - 02:02 | 355893 doomandbloom
doomandbloom's picture

Run FORREST Run!

Mon, 05/17/2010 - 02:10 | 355896 hedgeless_horseman
hedgeless_horseman's picture

Anyone consider that maybe the Rand is getting killed because the SAs are seeing a tidal wave of gold bids, and are thus shorting the easiest fiat, their own? 

US is losing the race to the bottom, now, but on a long enough timeline...

Mon, 05/17/2010 - 02:28 | 355912 DoChenRollingBearing
DoChenRollingBearing's picture

As a goodnight salute to my brethren at ZH, I can only say:

Buy gold or silver or platinum (or Absinthe, so far an amazing investment of approx. 25 Euros)!

Might want to buy guns & ammo, for those of us stuck in the paranoia world...  Get rid of debt.  "Don't let the bastards get you down" (Non illegiitmi carborundum).

Last comment before absinthe destroys my commo skills...  B.o.L. everyone.

Mon, 05/17/2010 - 02:37 | 355917 Matto
Matto's picture

Absinth - will be visiting europe shortly to personally invest too. It sure does have a way or ripping your head off without you even noticing till the next day doesnt it!?!

Mon, 05/17/2010 - 02:42 | 355920 UGrev
UGrev's picture

I forget who posted it in another thread, but this real time(?) chart (http://www.netdania.com/Products/live-streaming-currency-rates-foreign-exchange/real-time-quotes/QuoteList.aspx)  has kept me awake for longer than I planned.. and I'm out of popcorn.. 

Mon, 05/17/2010 - 03:42 | 355955 Fazzie
Fazzie's picture

 Thanks a lot UG, now I cant resist the frentic pace of the live quotes! Damn, I was just about to crash!

Mon, 05/17/2010 - 02:43 | 355921 vainamoinen
vainamoinen's picture

"Bernanke simply can not allow deflation,"

 

Unless, of course, he has no choice - i.e. he is overwhelmed by the circumstances.

No word out of Europe this weekend. What are those people up to? Of course they're talking - but about, just exactly, what?

Maybe I'm nuts but I just can't put "austerity" and "inflation" in the same sentence with a common reference.

And yes, I got my "physical".

Mon, 05/17/2010 - 03:16 | 355933 Arthur
Arthur's picture

Yikes 

http://finance.yahoo.com/intlindices?e=asia

Red across the board in Asia.  

Hardly a surprise, EU markets are opening down.http://finance.yahoo.com/intlindices?e=europe

Just adjusted several buy orders way down.  Still keeping a lot of cash on the sideline though.

Good luck all. 

 

 

 

Mon, 05/17/2010 - 03:17 | 355935 jedwards
jedwards's picture

dammit, just as I feared a strong reversal once the European markets opened.  Looks like we will be strongly green on the ES before the market opens tomorrow.  Fuck look at the DAX and the EURUSD get juiced like that, all that hard work down to ES-1124 for naught.

Mon, 05/17/2010 - 03:22 | 355940 Nigaz
Nigaz's picture

As for index futures, we won't bother you with those as we expect the Liberty 33 night shift to take over around 3 am and to make a spirited attempt at a green open. However, for now everything is solidly 1%+ down. So much for that 1,000 point/limit up bounce on the European "bailout."

2am (ET) is when they usually start taking over.  And did they ever again today... ES +12 in a little over an hour since then.

Time for them to take some profits off the table, and do this again in a few hours.

Mon, 05/17/2010 - 03:42 | 355953 doggings
doggings's picture

you can almost hear the billions whooshing down those swap lines can't you..?

pump it baby..

Mon, 05/17/2010 - 03:42 | 355954 MaximumPig
MaximumPig's picture

 

Fraud-Esq.

$70,000 paid 1M in February FX if you called US-Euro parity. wow. The money you can make in currency if you move these markets is incredible. 

Didn't someone think the US FX swaps deal with ECB would prop the Euro till Fall? Doesn't seem to be helping. 

 

I thought the swap lines would support the Euro as well but (a) I think I read elsewhere here at ZH they have not been tapped yet and (b) the size of the total swap line commitment is uncertain, so maybe the market doesn't know how to price it in.  I guess that makes this a political call as to when the ECB thinks it is time to reverse the euro's fall and start drawing down the swap.  

 

 

Mon, 05/17/2010 - 05:20 | 355986 John McCloy
John McCloy's picture

40 point + futures ramp job just happened in 20 minutes time. Incredible. 

Mon, 05/17/2010 - 05:22 | 355987 Noah Vail
Noah Vail's picture

As of 0430 it seems the pump monkeys have turned things around as most markets have suddenly reversed within minutes. But, we'll see how long it takes to short it all away agin.

Mon, 05/17/2010 - 05:28 | 355989 tim73
tim73's picture

Thank you, Americans. You just are fucking idiots. This is all Germany and other Europeans nations actually NEED! Go ahead, short euro even more and kill your own industry while doing it. Darwin award material.

Mon, 05/17/2010 - 06:37 | 356004 Abundance
Abundance's picture

Looks like a typical up Monday in store.  How come everyone got in a big tizzy here, when Intervention is the name of the game.  Europe up, looks like U.S. will be up as well.   A Trillion has to buy you something.

Mon, 05/17/2010 - 06:47 | 356009 The Axe
The Axe's picture

Monday---computers say BUY!!! BUY!!! BUY!!!!!   joke...

Mon, 05/17/2010 - 06:53 | 356013 primefool
primefool's picture

Monday european action - Highly predictable. Stocks magically come back, gold under pressure. This manipulation is like the Roman Legion - eavy unstoippable and doomed to extinction.

Mon, 05/17/2010 - 06:55 | 356014 primefool
primefool's picture

heavy, rigid, predictable and ultimately wil be surprised by some fast moving light event that was not anticipated by the dinosaur.

Mon, 05/17/2010 - 06:59 | 356016 LMAO
LMAO's picture

Today might be an Up-Down day, as for the week we prolly see 1160+ on the SPX since it's all fun 'n games at the OPEX.

Nothing new, the Boyz will bring home the bacon as per usual.

 

LMAO

Mon, 05/17/2010 - 06:59 | 356017 macroeconomist
macroeconomist's picture

Exactly primefool, such a blatant manipulation going on again..European markets and U.S futures up, gold down 1% as soon as London opens..How long do they think they can maintain this?  

Mon, 05/17/2010 - 07:06 | 356019 primefool
primefool's picture

How long can they keep it up? They dont know any more than we do. It is just what they are designed to do. its the only thing their world view lets them do. They dont stop to think about their own demise. Does any organism? No it just keep going - doing - according to the dictates of its genes. Big , lumbering , unstoppable, stupid, Meat.

Mon, 05/17/2010 - 07:07 | 356020 Abundance
Abundance's picture

As long as the FED, IMF, and ECB feel it's necessary to intervene.

Mon, 05/17/2010 - 07:12 | 356022 primefool
primefool's picture

T-Rex did not do philosophy. T-Rex just roams - and only asks 3 questions when it encounters another living creature-

1. Will it eat me?

2. Can I eat it?

3. Can I mate with it?

Thats the entire philosophical construct.

Mon, 05/17/2010 - 07:15 | 356024 Rider
Rider's picture

PPT worked overnight, we are in green.

"Nothing to see here move along... "

Mon, 05/17/2010 - 07:24 | 356028 primefool
primefool's picture

To be annoyed or angry about the manipulation is like - umm - being annoyed that T-Rex is unfairly crushing animals in its path . Forget it. Study the t-rex's actions - they are highly predictable - stay out of its way - do not kid yourself - do not take it on like some moron squirill taking on t-rex - you will wind up as a small snack for t-rex. You can outlast it - because its just so - so - big, lumering and stupid. And nature will do the needful to big,m inefficient, lumbering, stupid creatures.

 

Mon, 05/17/2010 - 12:00 | 356398 Haywood Yablomi
Haywood Yablomi's picture

T-Rex is going extinct, it is inevitable.  Problem is that his death throes are very unpredictable.

Mon, 05/17/2010 - 07:27 | 356030 reading
reading's picture

Well, Asia certainly took a beating, particularly China which as been retreating quite regularly.  If the bloom comes off the China rose at all then things could get very interesting.

Mon, 05/17/2010 - 07:33 | 356033 primefool
primefool's picture

Do not ascribe human qualities to the manipulative machinery. T-rex does not feel anything - certainly not your teenage angst ridden emotions like fairness. No t-rex feels only 2 emotions when he sees you ( you are obviosly too small and insignificant to be able to eat t-rex) - can I eat it? Can I mate with it. Unless you relish being eaten by t-rex or fornicated by t-rex - dont complain , dont explain - just stay out the way - and take care of your own affairs. T-rex will be gone soon enough. leaving plenty of decomposing flesh and manure to nourish our crops for a generation.

Mon, 05/17/2010 - 07:37 | 356036 primefool
primefool's picture

I understand cephalopods have 3 hearts. Which is why when a human ( congress critter) asked the chief - "dont you have a heart?" there was a long period of bewilderment " heart? heart? - you dont understand senator - I have 3 hearts..."

 

By the way , I understand the second heart - the one in the middle - is particularly delicious grilled with a garlic sauce and a nice Chianti.

Mon, 05/17/2010 - 08:26 | 356064 silvertrain
silvertrain's picture

And just like t-rex he doesnt even see the clouds comming in and the weather changing.

 Or a junkie, but they need more and more, now its turning DAILY..

Mon, 05/17/2010 - 10:09 | 356178 dot_bust
dot_bust's picture

The FX scares the crap out of me. I never had the balls to play in that arena. I did some short-term trades in oil and agriculture ETFs but left those behind after being whipped around in the 2008 Paulson whipsaw.

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