USDJPY Flash Crashes As All Support Taken Out - Record Collapse

Tyler Durden's picture

Support broken as the dollar yen plunges to an all time record low. Everyone now watching the Nikkei to see if it opens. That the BOJ has not intervened yet is beyond ominous, and nothing short of a death sentence for the Yen carry traders.

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What does it all mean's picture

They are intervening... they are BUYING Yen and Selling Dollar. Stop the disinformation.

MachoMan's picture

+$700b thrown into the fire already.

sockcutter motorforker's picture

as long as everybody can warm their hands on it

SpeakerFTD's picture

AUDJPY chart looks like it did before the flash crash.   May be a very interesting overnight session.

bbaez's picture

They brought in Bernanke to consult on how to print more than you can count

tmosley's picture

Where do you get the idea that they are selling dollars to buy yen?  I haven't seen any stories to that effect.

Carl Spackler's picture

Uh, hello? Is anyone home, tmosely?

The Japanese are selling their dollars to buy yen, en masse.

They are calling in all their investments to survive another day at home (and later rebuild).  This is what happened after the Kobe earthquake but not to nowhere near the same extent.

When the Japanese sell their dollars, they will NOT be buying more US Treasuries at Bernanke's estate sales, which means Obama and Geithner better start cutting spending fast, or we are "SOL" like Greece and the PIIGS.

This is serious. I smell QE3.


P.s. If you have to wait for the media to spoon feed you,after the game has been played out, then you are probably another one of the sheeple.

What does it all mean's picture

BECAUSE they have been intervening for the last 3-4 days.  They clearly wanted to buy some Yen first, because they will have to Monetize it further and support the Nikkei for the forseeable future.  As evident by the market ITSELF.


If you are waiting for ZH or MSM to tell you what to do, I hope you are not trading.  If you are just observing the market.  You can see that G7 and Japan have reached an accord...  JPY will eventually hit 100+... because they NEED to for commerce.

cswjr's picture

Holy shit.  Look at that drop.

jeff montanye's picture

and yet the treasury market rallies.  

zaphod's picture

So I'm confused, didn't Japan just print the equivalant of 10% of GDP? And the Yen surges? Really? The dollar must be completely fucked...

Concentrated power has always been the enemy of liberty.'s picture

can I still buy off the dollar menu?

Michael's picture

At this point, an all out depression is preferable. Kiss the stock and bond markets goodbye.

Thank God the USA has no money to wage anymore wars.

Spalding_Smailes's picture

Ben just had 12 tanker trucks pull up with yellow,magenta,cyan & black. And he has a virtual keyboard the only Central Banker with this luxury ....

Michael's picture

Digital zeros and ones on Ben's magnetic hard drive medium will soon be valued in Zimbabwe dollars.

Spalding_Smailes's picture

No worries ....

............ " But there are pockets of optimism, including Robert Shiller’s luncheon speech about the potential benefits of continued financial innovation. One of Shiller’s ideas is that the federal government should issue a new kind of security that would pay quarterly dividends based on the nation’s gross domestic product (GDP). More specifically, each security would entitle its owner to one-trillionth of America’s gross domestic product (GDP). These “Trills” would be perpetual, like common stock in a private company, and would be backed by the government’s full faith and credit.

I will leave to others to argue the pros and cons of Trills. What caught my attention was Shiller’s estimate of how much they would be worth. With GDP around $14 trillion, each Trill would pay about $14 in annual dividends this year. That dividend would then increase (or, of course, decrease) as the economy grows (or contracts) in the future.

How much you would be willing to pay for a Trill? In principle, that should depend on your expectations of future GDP growth and your choice of what discount rate to apply to cash flows that track GDP. Oh, and if you worry about the U.S. government defaulting (still a very low risk), you might include a discount for that as well.


That figure feels a bit high to me, but not unreasonable. For example, you could justify a $1,400 per Trill valuation if you believe that nominal GDP growth will be 4 percent and that an appropriate discount rate would be 5 percent.


If you take Shiller’s estimate seriously, it is just a short step to placing a value on the U.S. economy as a whole. If one trillionth of the economy is worth $1,400, then the entire economy would be worth $1.4 quadrillion." ........................


EscapeKey's picture

Have you actually smoked that much moonweed you believe this bullshit?

Right, because printing trillions of fresh US Dollars need a "valid" excuse.

Spalding_Smailes's picture

Financial innovation, bitch .... Follow the money, all of it ....

Who audits the fed ? Who virtual black hole for dumping toxic assets...... 


I hate it but also but don't hate the player ....

Canucklehead's picture

You realize you can't spend that stuff buying stuff.  You will be able to paper your walls with it, if you have walls.

Spalding_Smailes's picture

They have been saying the same thing a half of quadrillion ago ..... Nothing has changed.

Inflation is exported via all the countries that peg. More than half the countries around the globe.

FreedomGuy's picture

The interesting thing about Shiller's idea is that he inadvertantly confesses what I have believed for awhile now, that the United States "owns" all its citizens. If I understand Shiller's idea correctly its essentially selling stock in the U.S. and our total output pays the dividend. Whoever buys the trills owns the output of the country. The United States Government would have to have unlimited taxing power to pay this. It's not a share of tax receipts. It's a share of all output.

In any case, issuing unlimited Federal Reserve Notes actually does about the same thing except we can't buy into it.

I submit that in actuality our government has arrived at the point of unlimited power through taxation, regulation, currency manipulation and wholesale abandonment of the Constitution (with the aid of the Supremes). What bugs me is how many of us are really OK with that...about half the country by my reckoning. In fact, the financial types are excited as long as they can make money off of it. I don't think they give a damn if a Hitler, Stalin, Castro, Chavez or even a theocrat rules as long as they get or stay wealthy from it...and keep their hands in the revenue streams and privelages.

Spalding_Smailes's picture

My main point being the games not changing, China is not ready, the EU (27 countries under one rate ) thats not an option, so we have a shared basket some day or a reset. The USA will always make up the majority or be on equal footing. To much debt in the system via dollars, securitization, bonds, letters of credit, the cb's, commodities, primary bankers and most of the global banking system  .... Everyone must pay down this debt that is owed in dollars, 2,10,20 years out in some cases.

EscapeKey's picture

Not ready, according to whom?

As we previously discussed, the US Dollar is losing territory as invoicing currency, on global security issues, and in global debt markets. And that's when your ridiculous "US Economy = 1 brazilian Dollars" theory, along with insurance = principal, entered the picture last time.

Please explain to us again how a credit default swap in fact is debt, and whilst you're at it, explain how a call option in fact is equity.

Spalding_Smailes's picture

Like I said if a credit default swap was not money owed why was the bailout of AIG needed. And why did the EU hedge funds go ape shit when Lehman went under in the U.K.. The securitization market is global .... Debt owed. You can say they all even out but still your talking 1/2 of quadrillion then ....

Also credit and treasuries are not money in the system, they do not have any bearing on velocity of the current money supply.

..........“Sir, George Soros (“The false belief at the heart of the financial turmoil”, April 3) suggests establishing a credit default swaps clearing house or exchange as an institutional mechanism for reducing counterparty risk in  this $45,000 bn (notional) market.  We have been here before also.  Walter Bagehot’s Lombard Street explains how a bank’s acceptance of a bill of exchange (in effect a CDS) turned an illiquid asset into a liquid one." ......

EscapeKey's picture

A CDS is not debt. It's an insurance contract. AIG should have been allowed to fail, in which case the CDS contracts would have been worth nothing.

Besides - even according to your own argument - you only focus on the insurance contracts which paid out. All the rest - the vast majority - never paid out, and hence couldn't even begin to be counted as debt, even according to your ridiculous argument, which will double, triple, quadruplecount every re-insured position. Again, net notional is what you want to focus on.

Anyway, I'm off to bed now, so no point in asking where I've gone. UK time and all. Sleep tight and dream happily of quadrillions of CDS contracts.

Spalding_Smailes's picture

So now your argument digresses to " they should not have bailed them out "...

Sleep tight ....

As stated above net notional, I'm focused now, $45,000 bn.... Got it.

medicalstudent's picture

ir code added 401k language in 1978. 401k officially started in jan 1980.


wonder what kind of ponzi addendum they'll come up with this time to suppress pm prices and keep people holding dollars.


when pm's skyrocket... all that purchasing power will be derived (transferred) from everyone's retirement account.  thanks uncle sam.

Absinthe Minded's picture

Why fuck with a Trill when you've got a perfectly good instrument. Gold.
Trill. Funny how it rhymes with shill, another fuckin' piece of paper to ponzify us with.

Yen Cross's picture

That is funny as all HELL! That Whale tale made me laugh my ass off.

Cash_is_Trash's picture

God has no hand in this game.

Thank the U.S. Federal Government.

Boilermaker's picture

In all seriousness, don't they HAVE to open it to intervene?

cswjr's picture

No, different markets.  Though intervention without the ability to "do anything" via the Nikkei wouldn't do much.

Boilermaker's picture

Exactly, they work in tandem.  What's the point without the equity raise?

Cleanclog's picture

No, more effective if they do it through other markets.  Could be a week plus close. 

Could really mess with Euro re: Greece and Portugal, as localized central bank activities catch fire. While Japanese disasters make legit, other countries will glom on and use technique too.

Yen Cross's picture

Lets go trend lines. Under/over?

e_u_r_o's picture

Peter Schiff says Japan needs a stronger Yen, is he wrong?

4shzl's picture

Yeah, exports really aren't all that important to the Japanese economy . . . [/sarc]

tmosley's picture

There are no more exports, they have all been shut down.  No reason not to let it appreciate at this point, other than cargo cult behavior.

GoldenDragon's picture

Export what?  Their manufacturing base will be seriously affected by this.

Schiff is right, a stronger Yen will allow them to buy the things they need to rebuild.  They have foreign reserves.  If they don't make use of that savings to get them through this situation, when will they ever?  As Peter said, they've been saving for a rainy day and now it's raining ... big time.

EscapeKey's picture

It is not recovering. Not a typical flash crash.

Jim in MN's picture

Arrrr, die yen carry traders die--wait, who are the Yen carry traders again? 

Investment banks and hedge funds plus yield chasing dopes like Pimco/CalPERS? 

Squid-puppets a-go-go's picture

 who are the Yen carry traders again?

only the guys who are leveraged 500 to 1

Id fight Gandhi's picture

At least all that newly printed yen will buy more stuff to rebuild.

sockcutter motorforker's picture

yen carry traders weren't trying hard enough

EscapeKey's picture

79.20. Whatever they supposedly do, it ain't working.

edit: 79.12. 79.10. 79.08. 79.04. 78.96. 78.87.


78.62. Go to the fucking supermarket NOW if you're not stocked up/.