Stocks-Crude Inverse Correlation Passes 2008 Levels, Just Off All Time Highs: Major Correction Ahead?

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Mon, 03/07/2011 - 16:39 | 1027289 asdasmos
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Realty Mogul, Sam Zell, Talks Inflation - says we're not seeing inflation because the CPI is distorted. (Mar. 3 2011)

Mon, 03/07/2011 - 17:50 | 1027296 Quixotic_Not
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No worries Sam, the printing wheels are still spinning due to out-of-control acceleration, once the rubber gets maximum traction you'll get your hyper-inflation  ;-)

Good luck getting the wages to increase at anywhere near that speed...ROFL

P.S.  Sam, keep your filthy hands off my FICA contributions!

As long as the USofA exists, that $800,000 my wife and I paid into the .GOV is a debt owed to us - inflation adjusted!

And we're still making involuntary contributions to Our retirement fund each & every quarter...or course I would settle for a lump sum ca$h-out  ;-)

How about let's close 99.99% of the 1000+ US .MIL bases around the globe and focus work on cleaning house back home?

OK you fuckin' whinging bankster?

Mon, 03/07/2011 - 16:56 | 1027341 covert
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when it looks too good to be true, you can be sure that it is.


Mon, 03/07/2011 - 16:41 | 1027293 max2205
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and the 3:30 Ramp begins

Mon, 03/07/2011 - 16:46 | 1027310 Sad Sufi
Mon, 03/07/2011 - 17:03 | 1027363 Sad Sufi
Mon, 03/07/2011 - 19:39 | 1027869 disabledvet
disabledvet's picture

i did.  it was the song requested on the tarmac before Haiti--and i sang it.  of course a black prince is one thing--a dark prince is another.

Mon, 03/07/2011 - 16:42 | 1027298 rubearish10
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Sure, unless every current and future revolution reaches a happy conclusion because, after all, if there were no revolutions/MENA unrest etc,,,,we shouldn't even be talkin' 'bout a correlation knockdown. Everyone relax, all is good in the world, just look at the bounceback happening right now.

Mon, 03/07/2011 - 16:43 | 1027299 RmcAZ
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None of this matters... correlations, technicals, fundamentals, anything. The only thing that matters is BTFD. The ramp job is going to happen no matter what.

Mon, 03/07/2011 - 20:52 | 1028125 erikig
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I'm afraid this looks a little different from the last dip due to the stretched OIL prices.

Take a look at the SPX/WTIC ratio and the break it had the last couple of days.$SPX:$WTIC&p=D&yr=3&mn=0&dy=0&id=p45100742126

Buy the dip, but know when to exit...

Mon, 03/07/2011 - 16:44 | 1027301 alien-IQ
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however, what you fail to point out in this observation is that the last time such a correlation existed...we didn't have i-pads (let alone the i-pad 2)...this's different.

Mon, 03/07/2011 - 16:49 | 1027320 Sad Sufi
Mon, 03/07/2011 - 16:47 | 1027313 10kby2k
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Well, shit, it looks like ZH is correct .....  O'Bommy talks of tapping the strategic reserve and using the military and Kudlow (and the CNBC gang) talk about rate hikes and ending QE2 to strengthen dollar and curb inflation.

Do they see the big picture?   NO, they just can't handle the backlash of $4 gas.

Mon, 03/07/2011 - 17:06 | 1027368 SheepDog-One
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Obama himself said $7 gas is coming, in fact he said it would be here by January but apparently theyre getting cold feet, or something simply isnt in place yet for it.

Mon, 03/07/2011 - 17:44 | 1027509 10kby2k
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Sheep-dog:  That was in response to the Gulf spill and his projected cost to raise revenue to combat global warming.

Mon, 03/07/2011 - 17:41 | 1027497 alangreedspank
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More like 5-6$ gas.

Certrain parts of Canada have been paying 4$ a gallon for even more than 10 years.


Mon, 03/07/2011 - 17:57 | 1027561 10kby2k
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many americans are pussies....when economy was zooming they were spazzed about $4.50 (in 2007)

i am an overweight american: i want cheap food, cheap gas, full salary pension at age 55 (maximum), perfect medical care, huge lawsuit settlements, all my lazy and illegal relatives provided for and all the Kool Aid i can drink

Mon, 03/07/2011 - 16:49 | 1027314 TradingJoe
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Benjamin is the only man on the planet who "knows"


When the "correction" is Cuming!

Mon, 03/07/2011 - 16:49 | 1027323 TooBearish
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probably means CL/Brent will take a huge dumper

Mon, 03/07/2011 - 16:52 | 1027328 Tyler Durden
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And stocks will surge, meaning neg. correlation gets even more negative.

Mon, 03/07/2011 - 18:47 | 1027740 Arkadaba
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Well there is a limit to how negative a correlation can get (I'm sure you know). What I'm not sure about these days is what the dependent variable is. And correlation is an interesting and useful stat to look at when you can isolate two variables. But right now .... too many variables in play.

Mon, 03/07/2011 - 19:43 | 1027877 disabledvet
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i agree. "it's not gonna happen."  price of oil et al stay high.  if the plan is to actually pay the bills i would argue as well war is inevitable however.  i'm a religious man but it doesn't take much for me to say "government is God."  period.

Mon, 03/07/2011 - 22:22 | 1028317 DoctoRx
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Exactly right.  And then, one day-month-year in the future, they will correlate again.  It's all in TPTB's plan.  All the new "money" will go into one asset class or another, and correlations will work till they don't, so that the value of trading revenues and insider info will be maximized.  Meanwhile they key is that cash is trash-- till they crash the whole shebang again.  When and from what level?  Them that know ain't telling ZHers.  

Mon, 03/07/2011 - 16:48 | 1027324 Jendrzejczyk
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OT:  Hundreds of protesting homeowners occupying Bank of America lobby in Washington

Mon, 03/07/2011 - 16:52 | 1027331 alien-IQ
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little hints of rebellion from the american sheeple every now and then...there just may be some hope after all:-)

Mon, 03/07/2011 - 17:04 | 1027362 serotonindumptruck
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Just wait until those "sheeple" run out of food to eat. We ain't seen nothin' yet!

Mon, 03/07/2011 - 17:18 | 1027414 TeamAmerica
TeamAmerica's picture

Yes, let's have a civil war.  That's something to hope for. /sarc

Mon, 03/07/2011 - 17:29 | 1027450 alien-IQ
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nobody is hoping for a civil war...we're merely hoping people muster up the guts to finally tell TPTB "please remove your dick from my ass".

granted, some are perfectly happy with a dick in their ass (and there's nothing wrong with that if that's your particular cup of Joe)..however those who do not enjoy a dick in their ass might just want to inform the owner of said dick that any further penetration will be frowned upon.

Mon, 03/07/2011 - 17:33 | 1027471 serotonindumptruck
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+12 inches

Mon, 03/07/2011 - 18:41 | 1027725 velobabe
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that statement including dick and ass could be perceived as torture†

Mon, 03/07/2011 - 17:02 | 1027358 Village Idiot
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It's a start.  Have pride, people.

Mon, 03/07/2011 - 20:15 | 1027954 Zero Govt
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yes it IS a start... cracks starting, the countdown begins...

Mon, 03/07/2011 - 16:53 | 1027330 irishlink
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++ and we are now in a totally different space. Investors are still cautious and still remembering the drumming they got in 2008. It is the big guys game for the past two years and they don't run for the exits while there is still money on the table. They love stuff like this. lots of volatility and huge swings. ALL their birthdays come at once!

Mon, 03/07/2011 - 16:55 | 1027337 cougar_w
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If this series continues dropping a correction is virtually assured.

What is the causation for that? Money flight from equities on expectation of loss of profit for manufacturers? Margin covers? Why do we jump out of stocks on oil pricing?

Mon, 03/07/2011 - 17:04 | 1027360 SheepDog-One
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Im jumping in firearms myself. 'Investments' dont have to be just stocks bonds and oil. None of those things will do any good soon, but some Dinty Moore while watching the food riots and bank runs is winning in itself. Remember, head shots for zombies.

Mon, 03/07/2011 - 17:07 | 1027375 serotonindumptruck
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Brilliant investment strategy!

Mon, 03/07/2011 - 17:13 | 1027387 Sudden Debt
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Second rule in Zombieland = Cardio


Mon, 03/07/2011 - 17:27 | 1027441 cougar_w
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So it's the "oil over $100/bbl tanks the economy" angle. And then I guess a large liquidation in "anything not nailed down" knocks the bottom out, and the rolling sell-off does the rest.

Maybe not this time, they are ready, there won't be a freefall at least not without a fight. The Fed has a finger on the pomo trigger they might be able to lift things up enough to staunch the bleeding. And they can announce QE3 in no uncertain terms, give a $trillion to the TBTF, ignite an equities buying frenzy. So I guess we'll have to wait and see.

Mon, 03/07/2011 - 17:35 | 1027476 hambone
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I don't get how they simply announce QE3???  How w/ everything juiced beyond belief the Republicans wouldn't have a field day w/ the publicity...pretty sure there would be a very strong negative reaction from a segment of the population. 

Seems QE3 has to be in response to a new "crisis" - what will that "crisis" be???  Engineered, subverted, make believe???  Something has to allow them to do it...I just can't see it yet (and of course they can't survive without it as the T market is a $4-$5T annual black hole that only the Fed can feed to avoid interest rate shock and turn on a dime deflation). 

But how???  In response to war???  The hole right ahead of is sooo large I left to come up w/ any idea, crack pot or not to try and imagine how the Fed avoids the head on w/ reality???

Mon, 03/07/2011 - 17:52 | 1027550 Commander Cody
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Reality?  You want to see logic?  There is only smoke and mirrors.  The Fed will print until the dollar is worthless.  Who else is gonna buy treasuries when the US keeps falling deeper in the hole?  The Fed will print relentlessly as the bankster bitches they are.

Mon, 03/07/2011 - 17:59 | 1027552 cougar_w
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The Fed will get their head-on with reality, and they know that for a fact.

They want to hit the wall long after everyone else, that's all. Whoever hits the wall last dies with the most toys. And wins.

i think they have their crisis in the bag; a surge in oil, talk of Saudi peaking, and Arab unrest in the wings. We haven't had a noteworthy stocks down-day in 2 years. They can wait for a bad day (-5%) and go to Congress trotting out the MAD donkey, and they'll get $2T and a "please save us!" cry on bent knee across both parties.

A repeat of 2008 (or worse) simply will not be tolerated nor allowed.

And really they only have to play this game until Europe implodes and China ignites in riots. And then the world starts over, though we haven't seen much of that playbook as yet. My guess is neoFeudalism of some flavor, but I would not be surprised to see a military takeover centered in the US and spreading from there. But that's just me guessing.

Mon, 03/07/2011 - 18:51 | 1027759 velobabe
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cougar, the best kitty of them all† what about the flash crash, that was pretty dramatic down day, though didn't last.

guess what, øhedge got voted #9th best financial blog, whatever that means. also øH only needs 71 more tweeters to follow øhedge to get to 20,000 twenty thousand strong. i think this charlie sheen guy should do some pomo for ZH.

Mon, 03/07/2011 - 19:51 | 1027891 disabledvet
disabledvet's picture

flash crash...ahhh, the good old days.  "breaking trades" no less!  Wall Street as crock of shit in totality.  I must say some "Charlie Sheen pomo" would entertaining...perhaps "live from Port a Prince" (sp?) just to "make it seem like something other than a show."  the fact is "all of America is on the dole."  they'll blow up their banker--but will do anything to keep that gov check flowing.  you know, i know it, and now even your Banzai's evil kittie's know it too.

Mon, 03/07/2011 - 20:02 | 1027928 cougar_w
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Hey there velo ... They staged the flash-crash last time. I don't recall the reason (something in Congress was being voted on that week IIRC) and they threw a wrench in the gears to scare shit out of people who needed some schooling.

Worked too. It's been a long time without anything to upset their profit making. Though it did spook off retail traders for a while, I think they hadn't planned for that part.

They'll do that kind of thing once a week if they have to. It means nothing and retail is already dead.

Mon, 03/07/2011 - 18:00 | 1027580 MolotovCockhead
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   I don't get how they simply announce QE3???

This one is easy! Just send in their Wall Street speculators to drive up the oil price! When gas hit $5 at the pump, it will be more than reason enough for Helicopter Ben to hit the printing press at full speed! That way they get to keep the money they make from the oil speculation and their cronies get a new bout of QE shower. One stone two birds.

Mon, 03/07/2011 - 19:50 | 1027895 disabledvet
disabledvet's picture

even easier than that.  it's called "Helicopter Obama" now.

Mon, 03/07/2011 - 17:01 | 1027356 irishlink
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Finally!! The American people are waking up! How come MSM have not highlighted this today?  The bankers will be wary of their customers now. What will happen when rates return to norm or higher and a whole generation goes into shock?

Mon, 03/07/2011 - 17:03 | 1027365 Sudden Debt
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Tyler, what do you think will happen to silver if there would be a correction?

would silver and gold also correct like it did in 2009?


Mon, 03/07/2011 - 17:14 | 1027394 luk427
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I think the physical buying would be beyond belief if we had that kind of correction.

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