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STUPIDity At Widest Since April 2009, As Dollar Surges On Europe Contagion Fears Flare Up

Tyler Durden's picture





 

After the earlier announcement of record risk in Portugal, it was only a matter of hours before the epicenter would feel an aftershock. Indeed, Greece CDS is now back to over 400 bps, after tightening under 370 bps yesterday. Those poor protection sellers just can't catch a break. The dollar flight to safety trade is on again. Lack of robotic volume means the stock market has yet to digest what all this means. Lastly, in pursuit of an efficient sovereign risk market, STUPIDity is now back to April 2009 levels.

Dubai, never one to be left out of the sovereign default party, spikes sympathetically by 10 bps. FX traders are watching this, and puking, both literally and metaphorically.

What all this means is that STUPIDity is now back to April 2009 levels, courtesy of the proprietary STUPID sovereign risk index. And rising. We expect STUPIDity to hit record highs soon enough.

with Credit Trader

 


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Wed, 02/03/2010 - 12:23 | Link to Comment Hondo
Hondo's picture

Who are the idiots selling protection on Greece and Portugal?  Unless it's the government itself I'd like to know who ends up with the liability......I'd like to short them.

Wed, 02/03/2010 - 12:28 | Link to Comment bugs_
bugs_'s picture

AIG

Wed, 02/03/2010 - 12:52 | Link to Comment Hephasteus
Hephasteus's picture

And  It's   Gone

Wed, 02/03/2010 - 13:01 | Link to Comment Oso
Oso's picture

LOL

Wed, 02/03/2010 - 14:06 | Link to Comment Ripped Chunk
Ripped Chunk's picture

Oh Shit! Lost our shirts again on a bad bet.

Timmy, Ben!  Help!

Wed, 02/03/2010 - 13:19 | Link to Comment WaterWings
WaterWings's picture

Arrogantly Incorporated Greed

On a lighter note:

  • Thousands Stand Around
  • Federal Employees Missing Again
  • Fix It Again Tomorrow

and one for the "private" sector:

  • Diverts Everyone’s Luggage To Atlanta
Wed, 02/03/2010 - 13:26 | Link to Comment Anonymous
Wed, 02/03/2010 - 15:34 | Link to Comment the.spear
the.spear's picture
  • GENIUS.
Wed, 02/03/2010 - 17:51 | Link to Comment gmrpeabody
gmrpeabody's picture

+1000

ROTFLMAO!!!

Wed, 02/03/2010 - 18:26 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

JOB-Just Over Broke

God-Gold/Oil/Doelarr

Wed, 02/03/2010 - 13:00 | Link to Comment lizzy36
lizzy36's picture

rumor has it that it is the greek banks selling protection.  if they don't default win and if they do default banks going down anyway.  counterparty risk is so 2008.

Wed, 02/03/2010 - 14:30 | Link to Comment Anonymous
Wed, 02/03/2010 - 14:30 | Link to Comment Anonymous
Wed, 02/03/2010 - 15:07 | Link to Comment Oso
Oso's picture

wait,  for real?!?!?  fuckity fuck fuck fuck. 

 

i mean, thats what i WOULD be saying if i wasnt short EUR and long USD.  i am THRILLED to hear this actually, hope its true.

Wed, 02/03/2010 - 21:50 | Link to Comment velobabe
velobabe's picture

from the  I in STUPID

Italy seizes Bank of America, Dexia Assets in Derivatives Probe

from Bloomberg

they misled the region about the economic advantage of the package. Banks skewed the swaps to their advantage to hide fees

In Milan, prosecutors seized assets from four banks including JPMorgan Chase & Co. and UBS AG and requested they stand trial for alleged fraud. Hearings started in Milan this month...

Wed, 02/03/2010 - 17:30 | Link to Comment Whizbang
Whizbang's picture

Most likely the people with inside information, who already know that bailouts are on the way. Much like warren buffet during the financial crisis, these people will have made a fortune.

Wed, 02/03/2010 - 12:40 | Link to Comment NRGTDR
NRGTDR's picture

I hear ya brother but I can and am willing to ride the P/L swings as I am not trading in and out of gold...I know this will all end badly and there is no telling when that may occur....it could be next hour, next day, next decade. I have no faith in paper promises and again more than willing to ride the wild swings and buy on the bigger pull backs(and take delivery). Further, the physical market continues to show signs of stress and do you really want to wait for the day when it is obvious to everyone...to try and buy and take delivery of some phys?

GOLD CLOSE TO BACKWARDATION!

http://harveyorgan.blogspot.com/

COMEX Warehouse Stocks Feb 2, 2010 SILVER

10,093 ozs withdrawn from the dealer's (registered) inventory 
2,762 ozs withdrawn from the customer (eligible) inventory 
Total dealer inventory 47.38 Mozs 
Total customer inventory 64.53 Mozs 
Combined Total 111.91 Mozs

GOLD

4,400 ozs deposited in the dealers (registered) category 
30,535 ozs withdrawn from the customer (eligible) category 
Total dealer inventory 1.61 Mozs 
Total customer inventory 8.27 Mozs 
Combined Total 9.88 Mozs

There were paltry movements of silver in the COMEX warehouse. The gold movements were small except that there was an "adjustment" of 198,371 ozs of gold that moved from the dealers to the customers. This was most likely due to deliveries. This has brought the dealers down to a fairly low inventory level of just 1.6 Mozs.

There were 607 delivery notices issued in the FEB gold contract. The FEB gold contract total for the month is 2,509 notices or 250,900 ozs. Goldman Sachs issued 7 notices and stopped 0. Deutche Bank issued none and stopped 188. BNS issued 419 and stopped 206 while JPM issued none and stopped 172.

There were 121 delivery notices issued in the FEB silver contract. The total delivery notices for the month in silver stand at 242 or 1.2 Mozs.

There is 0.7 cent of contango in silver FEB/MAR contracts and 3.0 cents contango FEB/MAY contracts. The stunner is that the contango in gold fell again which for FEB/MAR is only $0.1 and $0.6 for FEB/APR. Gold is very close to going into backwardation which is signaling severe stress in the physical market. Razor thin contango is to be expected between the two front month contracts at the end of the month not the beginning. This is very significant.

 

Wed, 02/03/2010 - 13:11 | Link to Comment NRGTDR
NRGTDR's picture

gotcha. I figured as much. I keep a close eye on my miners for sure (my only paper PM so to speak). Def, got stops of those puppies. No interest in the rigged GLD/SLV  scam either.

Wed, 02/03/2010 - 14:02 | Link to Comment Anonymous
Wed, 02/03/2010 - 12:27 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

This whole thing stinks of manipulation. Just when the US Government's credibility is being called into question and people are starting to come down from the Kool-Aid high and ask real questions with regard to the out-of-control US Government deficit spending  and money printing by the Fed, the US Dollar is being presented to the world as the best thing since sliced bread and paper napkins.

And of course, even though the cattle are actually being fed recycled cardboard torn from the squatter shacks popping up all over America, they reflexively gulp down the crap like it's fillet Mignon, which means the cattle are actually eating their own.

Please, can someone slap some sense into us?

Wed, 02/03/2010 - 12:48 | Link to Comment WaterWings
WaterWings's picture

Nice description!

Although contrary to the article I believe we are experiencing foreshocks.

Thanks all, you Durdens you.

Wed, 02/03/2010 - 12:31 | Link to Comment AN0NYM0US
AN0NYM0US's picture

watch Rep Paul Ryan rip Geithner in this clip from today's hearings

 

http://www.c-spanarchives.org/program/ID/219067&start=3733&end=3969

Wed, 02/03/2010 - 12:56 | Link to Comment WaterWings
WaterWings's picture

Merci! "You can only blame Bush for so long." Yep. Mr. Ryan should have also pointed out that Mr. Geithner was employed with a m$ney shovel over at the NY Fed when he pulled the string on the blame-game puppet.

Watch Creamer earn his yearly bonus:

http://www.youtube.com/watch?v=LRWO68cU8TQ

Wed, 02/03/2010 - 18:47 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I had heard him say, "I am an Illuminati" over a year ago, but this comment was over the top.  Does he think he can massage us over for the Illuminati?  let alone GS?  What a creamer!

Wed, 02/03/2010 - 12:54 | Link to Comment chinaguy
chinaguy's picture

The Cspan link is a MUST WATCH! Many thanks!

Wed, 02/03/2010 - 12:45 | Link to Comment AN0NYM0US
AN0NYM0US's picture

watch Rep Linder try and get Geithner to provide documents on the Bank Tax proposal (Geithner avoids the question on multiple occasions)

 

http://www.c-spanarchives.org/program/ID/219067&start=4475&end=4856

Wed, 02/03/2010 - 12:45 | Link to Comment Joe Davola
Joe Davola's picture

Greece is the time, is the place is the motion
Greece is the way we are feeling

Wed, 02/03/2010 - 15:18 | Link to Comment Missing_Link
Missing_Link's picture

Love that one!  I think I remember some of the other hit songs from that musical:


Look at me, I'm Bernanke

Lousy with liquidity

Ink is all red 'cause I work at the Fed,

I can't; I'm Bernanke!

 

 

Turbo-Tax dropout  ...

Hangin' around the  ...  Treasury  ...

Turbo-Tax dropout  ...

With your old friend Ben  ...  Bernan-ke  ...

Your story's sad to tell, a Treasury ne'er-do-well

Most mixed up non-delinquent on the block

Your future's so unclear now,

what's left of your career now

Can't even get a trade-in on your smile

Turbo-Tax drop-out, no graduation day for you

Turbo-Tax drop-out, missed your midterms

Wed, 02/03/2010 - 12:45 | Link to Comment TraderMark
TraderMark's picture

For today's moment of zen

Some australian trader caught looking at semi nudes (with his back to camera) as his coworker is interviewed live about interest rate decision

http://www.fundmymutualfund.com/2010/02/things-not-to-do-when-colleague-is.html

In the words of Homer Simpson - doh!

Wed, 02/03/2010 - 12:54 | Link to Comment Anonymous
Wed, 02/03/2010 - 12:56 | Link to Comment Chopshop
Chopshop's picture

great catch, Mark !

thanks for the levity.

love the look on his face when he realizes he's fired in 5, 4, 3, 2 ...

at least it was miranda kerr and not cnbc financial porn for simpletons.

Wed, 02/03/2010 - 13:02 | Link to Comment WaterWings
WaterWings's picture

He's just being cynical about the total social and economic collapse around the corner. It wasn't carelessness, it was guts.

Wed, 02/03/2010 - 13:46 | Link to Comment faustian bargain
faustian bargain's picture

I think it would be kinda funny if someone had Zerohedge up on the screen in the background.

Wed, 02/03/2010 - 15:24 | Link to Comment Chopshop
Chopshop's picture

+55

Wed, 02/03/2010 - 15:29 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

hahaha

Wed, 02/03/2010 - 14:23 | Link to Comment TraderMark
TraderMark's picture

apparently I was the last man on earth who did not know who miranda kerr was until today.

Wed, 02/03/2010 - 15:42 | Link to Comment GoodBanker
GoodBanker's picture

Second-to-last... where the hell have I been? ... oh yeah, here.

Wed, 02/03/2010 - 16:12 | Link to Comment nedwardkelly
nedwardkelly's picture

Word is that a few of his mates sent them to him, knowing he was behind the live shot. At the end of the email it had 'turn around' - which he then did.

Wed, 02/03/2010 - 18:08 | Link to Comment cougar_w
cougar_w's picture

If true, that must rank as one of the top 10 pranks ever pulled.

Wed, 02/03/2010 - 12:50 | Link to Comment lsbumblebee
lsbumblebee's picture

"Gold...like kryptonite...feel weak...must crush it...blame it on...China...or...Greece..."

-The Adventures of JPMorganMan

Wed, 02/03/2010 - 13:01 | Link to Comment Anonymous
Wed, 02/03/2010 - 13:13 | Link to Comment godfader
godfader's picture

"USD is toast" quickly turning into "EUR is toast". Where are all the USD bears? They were yelling fire from the top of their lungs not too long ago.

Wed, 02/03/2010 - 13:38 | Link to Comment Anonymous
Wed, 02/03/2010 - 13:47 | Link to Comment faustian bargain
faustian bargain's picture

all fiat is toast.

Wed, 02/03/2010 - 15:27 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The roof...

Wed, 02/03/2010 - 16:13 | Link to Comment Anonymous
Wed, 02/03/2010 - 13:18 | Link to Comment dzinger
dzinger's picture

Tyler,

Really enjoy your insight on the markets!  In one of your recent articles you talked about the options the U.S. has to fund their massive deficit this year.  One of those was to orchestrate a market selloff so money flows out of equities into Treasuries.  I've noticed something peculiar recently.  As the market sells off the 10 year gov't bond yield is actually going up!  It should do the opposite shouldn't it?  Then I got to thinking (cause I am a hardcore analytic) what if China is orchestrating a market selloff and as people bail out of the market they are standing there with 800 billion of treasuries they want to unload?  Wouldn't this be a way out for them?  If there is enough panick in the equity markets they could unload a lot of treasuries without us seeing much of a change in yields cause demand would be met with supply.  Just a thought, I would be very interested to see what your insight into this might be.

Regards,

Darren Zinger

dzinger@wellwest.ca

Wed, 02/03/2010 - 13:18 | Link to Comment dzinger
dzinger's picture

Tyler,

Really enjoy your insight on the markets!  In one of your recent articles you talked about the options the U.S. has to fund their massive deficit this year.  One of those was to orchestrate a market selloff so money flows out of equities into Treasuries.  I've noticed something peculiar recently.  As the market sells off the 10 year gov't bond yield is actually going up!  It should do the opposite shouldn't it?  Then I got to thinking (cause I am a hardcore analytic) what if China is orchestrating a market selloff and as people bail out of the market they are standing there with 800 billion of treasuries they want to unload?  Wouldn't this be a way out for them?  If there is enough panick in the equity markets they could unload a lot of treasuries without us seeing much of a change in yields cause demand would be met with supply.  Just a thought, I would be very interested to see what your insight into this might be.

Regards,

Darren Zinger

dzinger@wellwest.ca

Wed, 02/03/2010 - 14:25 | Link to Comment Oso
Oso's picture

There is more than enough money in risk assets to move into "non-risk".  Notice however that yields got crushed recently, before the equity markets moved.

 

Short treasuries makes no sense at these levels.  Time will come later, but as EUR pukes, dollar will reign supreme before resuming its secular downtrend to zero.

Wed, 02/03/2010 - 18:20 | Link to Comment gmrpeabody
gmrpeabody's picture

Don't know if Chinaman would actually be engineering this, but if it comes to fruition, they will certainly have the opportunity to trade US paper for a higher $ and then buy more energy or material properties.

Wed, 02/03/2010 - 13:21 | Link to Comment Seal
Seal's picture

AND Fed's Currency Swap Lines: A BIG deal for the Dollar Bryan Rich: http://marketclues.blogspot.com/2010_01_01_archive.html#9101407448542015145

Wed, 02/03/2010 - 13:45 | Link to Comment Ben_the_Bald
Ben_the_Bald's picture

Don't forget Eastern Europe. Boom!

Wed, 02/03/2010 - 14:10 | Link to Comment Stuart
Stuart's picture

Stupid is as stupid does.   Yup, pretty stupid alright.

Wed, 02/03/2010 - 14:23 | Link to Comment godfader
godfader's picture

EUR in the toilet, Dollar will soar. 90 on the DXY coming up.

Wed, 02/03/2010 - 15:26 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

DXY to 82, then down the drain. 

Remember to hold the handle for a few seconds, as it is an old toilet.  We got it in 1913 ;)

Wed, 02/03/2010 - 14:23 | Link to Comment Oso
Oso's picture

and yet, equities just continue to float around.  day in and day out, it astounds me just how unbelievably retarded equity investors are. 

Wed, 02/03/2010 - 15:08 | Link to Comment Anonymous
Wed, 02/03/2010 - 14:54 | Link to Comment Anonymous
Wed, 02/03/2010 - 18:20 | Link to Comment cougar_w
cougar_w's picture

The FED can print money. The PIIGS that are currently/still in the EMU cannot.

Wed, 02/03/2010 - 15:24 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Stupidity warning: breaching holding level.

Stupid is as stupid does...has anyone said that yet?

Oh and it will be a year until these fools stop trading one lame currency for another, and move HEAVILY, and appropriately, into GOLD and SILVER and other precious metals.

YoY Gold to increase 150%

Yoy Silver to increase 165%

Wed, 02/03/2010 - 16:08 | Link to Comment godfader
godfader's picture

Wasn't the Dollar collapase imminent? Where is it? The dollar bears have become so quiet it makes me nervous.

Wed, 02/03/2010 - 18:22 | Link to Comment cougar_w
cougar_w's picture

It's always been a race between USD and EUR. On any given day one is a nose ahead. Ya gotta wonder how long they can keep that up.

Wed, 02/03/2010 - 16:56 | Link to Comment Anonymous
Wed, 02/03/2010 - 18:37 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Thx to everyone who posted vids!

Thu, 02/04/2010 - 06:46 | Link to Comment Grand Supercycle
Grand Supercycle's picture

 

USD rally continues, as forecast several months ago. 

USD weekly chart is now bullish.

Vice versa for EURO.

http://www.zerohedge.com/forum/market-outlook-0

 

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