Systemic Risk Elevated

Tyler Durden's picture

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Hard1's picture

Hey, I won the top spot again: "Elevated bitchezzzz!!!"

Regarding the post, just don't push that first domino on the long row!  CDS levels indicate first one is BBVA, what is your guess?

Oh and I just don't get the last paragraph. The author says that an index of financial CDSs just broke an important channel, but as actionable trade recommends....(drumroll)... financials!!! What am I missing here? Is that a bet on the next TBTF rescue package while ex-financials try to stay afloat on their own? or does he/she sees the CDS widening and equity outperforming??

CapitalContext's picture

Hey Hard1, thanks for comment. One is systematic and one is a trade. As an arb we see US financials cheap in equity land relative to credit land and would expect some strength relative to other sectors in XLF in the short-term - hence the tight stops etc (or use an arb but that is generally not available to most of our non-institutional investors). Fundamentally, the trade makes me nervous and we prefer (far higher conviction) the US vs EUR banks (EUR to underperform) and the other arbs in European financials that we mention. US financials may face some serious pain in November when a lot of TLGP comes due (http://www.scribd.com/doc/49078265/USD-TLGP-Maturities) - this will necessitate dramatically higher interest expense and lower earnings.

Hard1's picture

Hey, thanks for answering, srry for harsh comment, probably a byproduct of my user name.  I really liked your post, except for the contrast between the analysis and the trade recommendation.  Financials have underperformed dramatically and may look cheap, but I still wouldn't touch them with a 10 mile pole in this environment, specially if we start moving towards a risk-off environment, which I see as more likely at this time.

user2011's picture

Well, someone is keep pushing the market up.     Bad economic report, no problem, dip in the morning and up in the afternoon.    Bad housing data,  no problem, dip in the morning and up in the afternoon. 

Volume is getting to 52 week lows, yet the market will be up.

Someone said that there is 2.7 Trillion dollar parked in money market.  Individual investors are shy away from the stock market.    I am guessing someone is trying to "fabricate" a safe and advancing market to lure those investors back in.   Then they will do the slaughtering.  

 

 

Doyle Hargraves's picture

Like they were sheep in Australia being exported to Costco for sale. Gold is no balance sheets counterclaim and no currency's fool. Better to cut through the bullsh*t and get some PMs then believe the market, drop that $2.7T in and poof it is gone. Even better to have brass, lead, and copper to protect the Gold you get. This is just the last push to extract the wealth from the individual investors who haven't been wiped out yet. Rather than continue to play their rigged game, I took my ball and went home! PHYSICAL GOLD AND SILVER BITCHEZ!

user2011's picture

Well, someone is keep pushing the market up.     Bad economic report, no problem, dip in the morning and up in the afternoon.    Bad housing data,  no problem, dip in the morning and up in the afternoon. 

Volume is getting to 52 week lows, yet the market will be up.

Someone said that there is 2.7 Trillion dollar parked in money market.  Individual investors are shy away from the stock market.    I am guessing someone is trying to "fabricate" a safe and advancing market to lure those investors back in.   Then they will do the slaughtering.  

 

 

Ray1968's picture

Wow, there is a chart for everything.

savagegoose's picture

fuck i look at that list and think let em burn, am i bad?

JW n FL's picture

No! you are pissed off becuase you have been robbed blind! and they as well have robbed their companies Blind.. and "We the People" will be left to pick up the pieces again! this is the next wave of bailouts! after record years of bonus monies! when banks made no loans! when banks wrote down no assets! when banks did nothing but front run their clients.. and now they need more bailout monies!

 

This is what it looks like when POMO is turned off!

 

POMO is Not! Train Wheels! for the markets!

POMO is the only wheels the market has!

 

"We the People" Fucked! Coming or Going! no matter heads they win tails we lose!

SheepDog-One's picture

Agreed, POMO is NOT 'temporary training wheels' for the market, POMO is all the market has!

FunkyMonkeyBoy's picture

Tyler,

You going to do a post about the latest comex silver inventory news?

http://jessescrossroadscafe.blogspot.com/

Smartie37's picture

Latest data from Comex shows roughly same grand total for Eligible and Registered that has been tracking lately:

www.cmegroup.com/trading/energy/files/Silver_Stocks.xls

Does data from Jesse's site contradict this ?

Seacap81's picture

"They" are out of bullets.....can't use margin hikes, been there done that and their fraud would look to obvious to pull that rabbit out of the hat again.  So this is their latest trick, suddenly the comex has ample silver supply.  It's laughable.  The continued corruption is beginning to look more and more exhuastive. 

buzzsaw99's picture

The FSB is just like the IMF. They just want to bail out their friends.

Great Unwashed's picture

Risk is sooo 2008. Let's move on, shall we? We all know that nothing will go down except the value of fiat. When assets threaten decline central banks will devalue fiat faster, until finally we are bartering turnips.

plocequ1's picture

Wheres Robo to tell us none of this matters because NFLX is at an all time high?

Vergeltung's picture

I love ZH dearly, I really do, but there are 2 or three obvious typos/mis-spellings in that short article above.

"let them eat spell check!"  :-)

 

Ruffcut's picture

Time for more stress tests. I think David Letterman has the answers,  on his top ten list.

alien-IQ's picture

obviously this will trigger the "Systemic Risk Elevation" Rally because...they roll like dat.

SheepDog-One's picture

Risk? Bah! There is no risk, we got the Benny and the Inkjets! All is welllllllll !!

baby_BLYTHE's picture

Ben is great, Ben is good, let us thank him for our food.

StychoKiller's picture

Mmmm, crunchy, crunchy iPads...

alien-IQ's picture

just guessing here but I'm thinking the /ES will close at either 1325 or 1312. Precisely.

LRC Fan's picture

Does it matter?  Technicals are just another tool they use to bait more shorts into this market.  Look at last night-big "technical" breakdown all the way down through the key levels and then we pop right back up today.  The only thing that matters to the ES is the DXY, which is mostly the Euro.  So it's Euro up, stocks down and vice versa.  Charts, technicals, news, earnings and all else be damned. 

Also can anyone answer my question from earlier in the week...if US stocks go up because of a cheaper dollar vs Euro, why do European stocks go up on a more expensive Euro? 

alien-IQ's picture

Regarding the technicals on the /ES. I largely agree with your take on it. the only real technical indicator that has been consistent since Sept. 2010 is the 100 day MA which it has yet to breach and bounced off of today. and yes, the DXY also must be watched when playing the /ES.

As far as Europe markets...I really don't know how to answer that. I have never played it and do not follow it closely enough to have a worthwhile opinion on it.

I'm not committed to being short or long in my trading. I just trade in and out. Fast. My idea of holding a position a long time is anything over 1 hour.

Overall, I think the market is a joke. Nothing makes sense. It has no correlation to reality whatsoever....

oogs66's picture

I think the explanation that a weak dollar is good for earnings and therefore good for stocks is an oversimplification.  I believe the dollar is weak when people are comfortable that the global economic situation is getting better so they put their money into risk assets - foreign currencies, stocks, and commodities.  It helps explain why generally stocks seem to do better when oil is up rather than down.  If we only followed what is bad for consumers, stocks should be down when oil is up, but the energy companies do well when oil is up (which often happens when the dollar is weak) and the macro players see oil price increases as a sign of improved global economic conditions?

I'm not sure that makes sense, but more and more it seems that everything is risk on or risk off and it is really hard to determine what is driving what.  Also the various 'tells' in the market change over time.  $/Eur has been a big one of late, but hasn't always be the case, and will likely be supplanted by some new indicator that drives the risk on/risk off trade.

oogs66's picture

or exactly in between

Mercury's picture

< dupe print >

Mercury's picture

Do you know who I am !?!

I'm the head of a top 30 systemically worrisome institution !!

Now bend over!!

plocequ1's picture

Do you know who I am?  

Mercury's picture

Hello housekeeping?  I'd like to request a different chamber maid...

JW n FL's picture

Hello housekeeping?  I'd like to request several MORE chamber maid's...

mynhair's picture

Look out above.  Back in TZA.

Piranhanoia's picture

None of these firms provide anything of value, worth or need for this planet or any inhabitant. When they are dissolved we may undertake the cure that removes their excuse for an existence. To get an outcome of "happy" we must ignore the Vogon constructor fleet in the room.

 

SYantiss's picture

Nobody panic!!! The CME will put a stop to all this risk.

JW n FL's picture

“With NYSE Technologies Marketplace we can now provide our members access to more than 1,200 buy-side and sell-side institutions and connections to exchanges and other electronic trade execution venues around the world,” comments PhD Lin Pei, vice general manager, STOCOM, in the release. “This new connectivity will help to differentiate our market participants from the competition while also benefitting QDII (Qualified Domestic Institutional Investors) and QFII (Qualified Foreign Institutional Investors) brokers to greatly reduce the cost and time to reach overseas markets.” Through this new connectivity service, NYSE Technologies will offer Chinese institutional clients access to Marketplace, one of the industry’s largest FIX-based communities where more than 1,200 global trading counterparties connect to one another via more than 10,000 fully managed FIX-based messaging channels. Marketplace members benefit from access to a wide range of liquidity sources, lower trading costs and speed-to-market with new trading counterparties and services.

http://www.advancedtrading.com/articles/229625558?cid=nl_at_daily

JW n FL's picture

short China / Chinese Stocks (syntheticly) that much quicker!

 

You are welcome!

speconomist's picture

Woah, can't understand what's wrong with a Bank as diversified as Santander (and with so great results in 2008 and 2009).

 

If there is only one solvent bank in Spain it is Santander for sure!!

slewie the pi-rat's picture

The credit risk of the 30 most systemically critical financial entities in the world just broke an important channel

LOL--those banksters can paint a chart for ev'ry tranche & derivative, can't they?

DosZap's picture

OT, but in light of this, and so much other wonderful news..........

Curious.

What percentage of folks here are actually holding phys,in an over 50% of their actual  NAV?.( Do not count stock).

Real stuff in hand.................

Curious.

 

PulauHantu29's picture

mmm...when is this meltdown expected to occur? Didn't they say,"it's only a tiny leak."

Downtoolong's picture

Well, that’s progress for ya. Twelve months ago authorities and financial experts were still trying to identify what systemic risk was. Now they’ve distilled it down to a single index. That’s fantastic. This will allow the biggest banks to get systemic risk under control by writing $20 trillion in hedging derivatives against that index and laying them off on AIG.  

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