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Rush To Safety Accelerates: 2 Year Treasury, USDCHF Both Plunge

Tyler Durden's picture




 

Earlier today, Thomas Jordan of the Swiss National Bank stated that banks may need to triple their current common equity level, essentially undoing all the carefully prepared propaganda of Basel III, and validating just how undercapitalized banks throughout the world truly are. And while the regulators will likely completely ignore his message, the market appears to have noticed: the USDCHF fell to a fresh 2.5 year low of 0.9702, which is making Swiss exporters very, very unhappy. Additionally, the dollar weakness of recent days has reversed this morning especially on continuing Irish sovereign fears (especially after the whole Irish PM Citi conference circus), even as the Dollar-Yen continues to attack that critical 83 level which was the barrier for the BOJ's last intervention on September 15. It seems all the Chinese posturing of bailing out Europe is now completely priced in - oddly enough nobody seems to care that China is willing to provide vendor financing to broke European countries.All of this has driven the 2 Year UST to a fresh all time low yield of 0.3987%, as the Fed's finger salute to the saving middle class becomes ever more distinct.

USD

EUR

JPY

 

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Mon, 10/04/2010 - 08:21 | 623575 99er
Mon, 10/04/2010 - 09:10 | 623632 chopper read
chopper read's picture

i like your 'snapshot' trendlines, 99er.  thank you for posting.

Mon, 10/04/2010 - 08:20 | 623582 Id fight Gandhi
Id fight Gandhi's picture

How soon until it's at .25?

Mon, 10/04/2010 - 08:31 | 623587 hugolp
hugolp's picture

Its coming...

As the deflationary correction appears again after the stimulus, Bernanke is getting the printing presses ready.

Mon, 10/04/2010 - 08:36 | 623592 gwar5
gwar5's picture

Once the psychology kicks in, it's pretty hard to stop.

I think the Fed is counting on that and trying to drive down the dollar with talk first. The amount of QE II will depend on how much they scared the USD down, and what they think their relative target is for the USD.

But, anybody have any idea what Ben's relative target drop for the USD might be? To the JPY, for example? 

USD dropped 115 -->85  to JPY over the last two years. Another similar? To say 65 JPY.... or more?? I have no technical idea how to game this one or what the Fed is looking for except the analgesic effect.

He'll stop when he sees.... what? 25% drop? M3? Jobs? inflation? Obama's poll numbers? Goldman Sachs hit $300?

Thanks

Mon, 10/04/2010 - 09:15 | 623640 chopper read
chopper read's picture

its the poker game of the century and everyone knows who is bluffing. 

Mon, 10/04/2010 - 09:52 | 623681 hugolp
hugolp's picture

He'll stop when he sees.... what? 25% drop? M3? Jobs? inflation? Obama's poll numbers? Goldman Sachs hit $300?

Hell stop when the government debt has been devaluated to payable levels and the banks balance sheet are repaired because prices of the assets have raised enough.

Mon, 10/04/2010 - 08:43 | 623602 zaknick
zaknick's picture

MISCREANT, PLEASE STEP OUT OF THE MATRIX!

 

http://www.youtube.com/watch?v=USGSOViaulc&feature=related

Mon, 10/04/2010 - 10:01 | 623700 Tense INDIAN
Tense INDIAN's picture

everyones rushing to safety ....including these millionaires...:

 

http://taxprof.typepad.com/taxprof_blog/2010/10/2840-millionaires.html

Mon, 10/04/2010 - 11:13 | 623815 snowball777
snowball777's picture

Funny...if you made less than $50k, you're a parasite feeding off entitlement and spending your neighbors hard-earned scratch, but if you're a millionaire, you're suddenly a genius getting the 'insurance' that was coming to you.

I love the smell of hypocrisy in the morning.

Mon, 10/04/2010 - 11:08 | 623806 snowball777
snowball777's picture

Toujours bas pris, toujours bas salaires...bienvenue a la marche du Wall, EU.

Mon, 10/04/2010 - 11:27 | 623838 doolittlegeorge
doolittlegeorge's picture

Is it "Basel" or "Basle"?  Houston, I need a spell check here...

Fri, 10/15/2010 - 02:59 | 652023 nikejordan
nikejordan's picture

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