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Volumeless Rally In Equities, Commodity Rebound Mired In Sea Of Deflationary Signals
1:50PM EST
S&P trading rangebound (1115-1125) on zero volume for a fourth session in a row now...midday sessions have come to a near standstill with very little buy or sell interest from the hours of 10:30-3:00....how this portends for tomorrows session, well there appears to be very little anxiety heading into tomorrows unemployment report (very weak sell side volume heading into numbers)....market expecting nonfarm payrolls of -87K with unemployment rate to uptick slightly to 9.6% from 9.5% in June...unless numbers come in significantly worse (more than 150K in job losses) expect "invisible hand" may take advantage of little sell side pressure to drive markets higher or at least keep market losses somewhat mitigated....remember the government right now has a very keen interest in seeing higher equity and commodity prices as market participants are currently highly focused on signals of deflation....declining asset prices (equities, commodities, and real estate) are very strong signals of deflationary pressures so really feels as if there is some ongoing intervention in the equity and commodity markets (real estate market has already deflated for the most part) to offset any deflationary pressures that might be present due to weak demand and ultimately quell any concerns over deflation so that prices dont begin to spiral downward out of control....a deflationary spiral stems squarely from a negative perception of prices as consumers begin to withdraw demand due to the perception of being able to buy assets at lower prices in the future....note however that while equity and commodity prices are being artificially skewed, the Treasury market (which is much more liquid and much more difficult to manipulate) continues to signal very weak growth, high unemployment, and very significant concerns over deflation....while equity markets have rallied 11.5% off their July 1st lows, the 10-Year Note continues to sit at a 1-year low today (in terms of yield) just over the 2.89% level....significant demand for low risk yield continues to be be present in financial markets, with very weak demand for high risk assets denoted by absolutely anemic volume in equities on this recent rally (a prime characteristic of deflation)....also note the dollar (which trades in the most liquid market on the planet and also nearly impossible to manipulate) continues to decline signaling a prolonged period of low interest rates (ie very little concern over inflation), very weak domestic growth, and more than likely a new round of quantitative easing measures...in other words, while the relatively low liquidity equity and commodity markets are attempting to signal a global recovery (and hence a more inflationary environment), the two most liquid and therefore most efficient financial markets (Treasury and FX) continue to invalidate the claims made by these markets ultimately portraying a much more accurate environment with significant deflationary headwinds...key question is how long does this manipulation in equities and commodities last before deflationary headwinds are simply too strong to ignore?
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So all those thousands high flash bids push the market down? Pitz must be a stock broker.
There's high flash asks as well.
Which way the market went, either flash crash, or flash surge, is more of a question of random-ness, than one of fundamentals, in such an environment.
If you're familiar with feedback control systems, you'll know that once there are poles in the right-hand side of the s vs. jw plane, excursions from stability are completely unpredictable. Same effect is happening in the contemporary stock market because these machines are largely running based on feedback control principles, rather than fundamental, open loop control inputs.
Yeah, there's been high flash asks on FAZ for the last week or so....ridiculous. Turn it off so daddy can make some money.
You are a dumbass pitz...the flash crash occurred when the machines were off...you must be a government shill...as a matter of fact you are...you leave no doubt...
I talk down bonds, which are the way that my alleged employer (according to you) gets much of its funding, and you accuse me of being a government shill?
Hahahaha.
If you hate government, then the best way to starve government is to stop investing in fixed income, and to encourage everyone else to do the same.
Yep. It's the grandmas.
Move along, now.
the 'Pyramid' has everything
As long as the world accepts FRN's they can be *creative * with money printing to offset their losses with each other
Mind you most of the *assets* are obligations between these banks themselves and more or less nothing to do with you and me
If Congress had said F^&* off and 100 % deposit insurance to small businesses and non derivative exposures it would have cost less than 2 trillion, that too as a back-up
Get all the banks to the table and ask them to throw their books at each other and start anew
We could have gotten over this in 2 hours and a sigh
But no, "Taxpayers MUST ensure no banks make a loss"- 25 trillions and counting
And nobody can ask the Fed how they do it!
And they say there is democracy in US!
Go long, go short ;either way something goes up one's +ss
Thought I'd help you out there a little, pitz.
It appears that one other person in the analytical pool has caught on to the gubbmint and their bodacious Jedi mind tricks. These are not the wheat shorts your looking for... buy, buy buy!
Of course, the Russkies deserve an assist on this one.
*sigh*, maybe Zerohedge membership should come with a complimentary dose of Haldol. Because there's sure a lot of delusion as to the real state of industrial output, and how precarious things really are on the supply side.
*Blah*Flation is the truth
Tokyo is the costliest city to live in the world after 20 years of so called deflation
Stop the nonsense about the prices
All the markets in the world are rigged to some extent
Look at the big picture
Average living expenses have skyrocketed worldwide over the last decade
But interest on fixed bank deposits worldwide has come down to zero or negative to inflation targets
what does that mean?????
Take risks or perish---
So Deflation is *x* times more dangerous than inflation for which everyone has got accostomed to over the years by stealth
Nominal prices of *things* will be kept neutral for years to come, everytime there is a downward spiral
Best answer- Look at countries where real interest rates are above Zero and are not drowning in debt
Brazil, Vietnam, Indonesia, Malaysia,Taiwan
India has negative real interest rates due to double digit inflation and will face problems soon coz 90% population is seriously affected by price inflation
pottsy,
If the rate of rise in the commodities matches the rate of decline in DLY (do I have the symbol right?), then it's a pure currency play. As USD oscillates, so will commodity prices. I've been watching that since the last dollar peak. Ditto for oil. Lowest oil prices were when USD had its high value.
Now, if USD is about to tank i the next two weeks, I'm with you on the inflation story. Otherwise, play the oscillator.
Regards,
I was thinking on a slightly longer term basis. Oil at $80, and $3 copper in the midst of a depression (that, by most accounts, continues to worsen) pretty much says everything you need to know in terms of just how stable the supply is.
Looks sunny on my end:
AH more totaly meaningless solar stock nonsense...BRAVO Leo! Damn 1 trick pony...puts up a chart of a stock that went from 6 to 8, concludes 'all is well'? What a dork.
This chart shows me that after 2 years, this stock has gone...nowhere.
GFY, Bulltard