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We Have Inverse Lift Off
Correlation to market: looks about -1.000000, give or take. Give Bernanke a Purple Heart for taking some serious shrapnel in the buttock as a proxy for the ass of the economy he was sworn in to protect. Once the DXY hits 0 (just a few more days, patience), he should be first in contention for the Congressional Medal of Honor and Destroying the Enemies Of Wall Street (CMOHADTEOWS).
Oh, and for those asking, the VIX is, quite logically, higher for the day. Not like it matters.
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I haven't seen 300 pip moves in the Yen crosses in quite a while... it happened today!
talk about bad luck; Gulf of California hit by 6.9 magnitude quake
didn't feel a thing & YEAH I can see China from my office bld.
(p.s. China as tenants below are moving out and selling their "China" ~ CRE is one huge green shoot in here...)
Cheeky Bastard - Nat Gas move today must've killed a few people...
if the move in NG today wer in anything other than BenBizarro World it would have been down...storage operators already slowing takes, pipelines loaded, way above 5 year, etc...
Whoopeee, up is the new down, the helium market must be robust.
What whole move happened in 1 minute. At 9:04 gas went from $3.74 to $4.16.
someone blew up today.
That definitely did not feel like some one blowing up. I think someone just bot 15k u swaps market. It will be a rather interesting market if Obama does force these position limits, this will definitely become more of the norm. Get here 200% volatility....
Is that what the market moves are being attributed to today???
never let a potential tsunami go to waste
the "REAL" move today was seen in the neglected Brazilian Real, over a 6 cent swing
i often use Brazil as my 'tell' re: coming events re: China, perhaps MKeiser speaks it here:
recorded on August 1st 2009
http://www.youtube.com/watch?v=AVfdiEVkGnM
Something to keep an eye on in Brazil:
Pressure mounts on Brazil Senate leader to resignhttp://www.reuters.com/article/marketsNews/idAFN0353641220090803?rpc=44&...
Man, those Michael Jackson headlines continue to work wonder for the Bulls. Is that some new Fed policy?
VIX = overrated and irrelevant. I refuse to use an indicator that does not actually correspond to anything.
Tyler..you obviously don't have a clue....
"So long as the dollar weakness does not create inflation, which is a major concern around the globe for everyone who watches the exchange rate, then I think it’s a market phenomenon, which aside from those who travel the world, has no real fundamental economic consequences."
Alan Greenspan, November 18, 2007
Yours truely,
Ben Dover
-Devry Institute of Economics
Ahahahahaha - nice one.
Shouldn't Greenspan be in a home by now?
He obviously has had dementia for many years.
The price of oil has a fundamental economic consequence in the United States.
What about food?
eat green shoots
Is it a better high than smoking them?
multiply the effect of peyote by 20 000 .... its a bomb ... especially green shoot brownies ...
worse if you can believe that
Scratch my last comment, did anyone see the move in Nat. Gas today! ?
I saw it through UNG. I don't have any other way to access commodity futures than ETFs. I've been waiting to buy SJT but how low is nat gas going to end up when the market does sell off?
At first the rumor was Independence hub was down, but Anadarko confirmed it was routine maintenance. It sounds like there was an order entry error on Globex.
Or......... It could just be that there was routine maintenance and a hedge fund leaked a worse rumor and squeezed the shorts. Free cash for the banks, but who the hell would be shorting nat gas with a dollar that's going down quicker than a catholic girl on prom night.
Don't get confused with NG and USD. NG does not share the death dance with the USD that CL does. The vast majority of consumption of NYMEX NG is done by people with an organic position in the dollar - they spend dollar income on dollar gas - no need to convert.
This is one of the reasons we have seen record-wide spreads in CL and NG.
I for one, welcome back our $5/gallon gas overloards....
But what else can he do? America has way too much debt, deflation is a disaster if are heavily indebted. So the currency is going to be devalued and America will have to adjust to lower standard of living. The trick, if there is a trick, is devaluing the dollar against other currencies, such as the euro and sterling, which are equally flawed. Thus far Bernanke seems to be getting away with it, but for how long?
OMG-Jimmy Rogers may finally get something right.
He has said for a few months that the indexes could
climb to lofty level but it won't matter cuz the
Dollar is shit. Not a Quote.
Maybe it's not a strong dollar policy on the outside, Ben just doesn't want any of the other currencies to get intimidated.. it's a game of Muhammad Ali Rope-A-Dope, the dope just happens to be the American people...
where is oil going?
to the moon.
thats not good for me:(
Tyler, you realize the VIX tracks the ATM volatility of SPX puts AND CALLS right? Dude the VIX can rally in an uptape, whats wrong with you? As long as vol increases, the VIX increases. Its not a perfect -1.00 correlation bro.
yeah - a persistent misunderstanding on this site.
Actually the vix is not based upon an atm vol calculation, it does use the entire vol surface. You are indeed correct that vol can be up during a rally. Why would anyone think it would be when spus are trading near 1000. I love how this site blasts those who use correlation to help manage risk while at the same time continously commenting on how the world is ending because something is not perfectly correlated.
Am I the only one who feels like I can't put my money ANYWHERE right now?
by ANYWHERE do you mean places in the US markets? If so then yea.
Most of my investments are in my 401k with crappy investment options. Do I put it all into a money market and watch it get pummeled by devaluation? Do I put it in stocks and watch the market tank a couple of weeks, or tomorrow? Ditto bonds? I can put more weight on the foreign stock fund, but it's dollar hedged as best I can figure, so no inflation protection, plus foreign markets will tank with the US market.
401k investors are captive as usual, just looking over the sides of the boat as it heads for the falls. I guess the lesson is, put more into my brokerage account.
if the market sells off, then the USD should gain the most.
world market is as fudged up as ours. don't believe check out the PCY junk. (Hungary & Ukraine are on the verge of default, consist of 10% of the fund & that junk has already recovered most of its pre credit crisis losses, what crisis....)
p.s. The above is not an investment advice, etc. (the best advice I ve seen is from Ultimum Borbar-something blog: "Be a ball."
I'll drink to that... been sidelined for a while now.
Physically hold gold/guns/farmland
Good choices. I have the first 2, but haven't yet invested in the third. Still waiting for a foreclosure bargain in my neck of the woods to appear.
Give it to me. I will make it disappear just as efficiently as the market. Only I will send you pics of all the fun I had.
just put it in your mattress. in a few years people won't even try to steal it.
I feel the same way. It's getting more confusing.
Maybe we should just invest in ammo.
My brother-in-law asked to borrow some money last week. I said that I'd like to help but I couldn't because all my money was tied up in cash.
TD, what happened to the CDS updates you used to give?
The Dollar really is collapsing. It's really happening.
I want to be paid in sugar from now on. I really don't foresee any problems with that, as long as it never rains. Except for the damn thieving flies, of course.
I would have asked for payment in oil, but apparently that would get be labeled a 'speculator' and shipped off to Gitmo.
I love the new adjectives on ZH. "Love Explosion" and "Inverse Liftoff" beats the pants off of 'tanking again'.
Tyler, there's an incredible demand for upside calls right now, that drives vol up, which drives the VIX up. Not everything is a conspiracy..christ.
That's right!
This market is being driven by solid fundamentals!
It is striking though that there seems to be a fear of letting the market retrench or backfill any of this 3 week rally.
Must be all that "money on the sidelines."
YEAH, besides Value Caps ALWAYS go up!
the higher it goes the more risk of a big selloff as all the long stops are moving up and no one has taken any profit, fewer and fewer shorts to slow the fall and when everyone runs for the exit there will be rather a fast fall, so they are stuck in a spiral of never ending gains. How vertical will the market have to go before it falls over backwards!!!!
Are you joking? What fundamental??
What do you think?
I think the administration has finally decided to allow the $ slide, must be anti-deflation measure of the last resolve. (doubt it will help but natural equilibrium level to correct trade/credit/savings dis balance must be even lower.)
Now how many months will it take for China, EU & Japan to cry wolf?
In this economy, it won't take long for a tanking USD, aka $3+ gas (doing about the same damage as $4 gas last year) to blow the tail of this "recovery" and send it into the abyss. I suspect with a big week for Benny & Co., we'll have a "correction" in the equities to create "risk aversion" (what an oxymoron), which is the next spin on the wheel. He's playing a dangerous game.
I'm shaking my worthless scrip in anger!
who needs nuclear weapons when we can lower the value of our treasuries across the world? couple more months of this and we'll be doing the tom clancy dance with our buddies from china (oh wait, we already do that)...
That's the sheer beauty of it, from a sociopathic financier's perspective. And nobody can say we did anything--"hey, we don't know what you're talking about, this hurts "us" as much as it does you! We tried . . . "
At least, it will play well here. As for the rest of the world, I got my doubts.
RBOB pushing through $2, I wonder how $3 gas prices will sit with 16% U6 unemployment. I reckon that's just what consumers need, higher gas and interest rates, to go with their falling real incomes, their need to save more, their need to pay down debt, a contraction of credit, and a rise in their tax burden.
Party on dudes!
Dude, don't you know everybody is driving a Prius now? Cash for clunkers told me so! Hope they are all midget people because they are gonna be living in those minimobiles.
No problem, they took huge cash advances from all those 0% credit card offers and put them into the market. Then they take all their monthly bills and pay them with their unemployment bennies.
When work finally roles around again, they'll liquidate their market positions, which will be 100% higher from here, pay everything off and go back to work as if nothing ever happened. They may even have enough money left over to look into something called "flipping" a house.
Dow 20,000 by the end of the month anyone?
Why so bearish? you clearly aren't seeing da green shoots...lol
Silly me, I forgot my rose tinted specs....
Ah that's better... I can see clearly now... Dow 50,000 by the end of the week
why so humble ... dow 20 million by tomorrow
How desperately is the S&P trying to cling to that 1000 level right now? It's been pegged for an hour.
We have not even seen the real up move yet. The move to 1200 will be done in the next 1-2 weeks as GS will raise their targets and every sucker will buy into it. The markets closing print on the year has already been decided by GS and the government. All the complaining in the world will not change this. This is no longer a free market, good luck.
16 times $75 is 1200. It can happen, doesn't make it right, but it can happen.
your 75 is just a tad high perhaps?
True, but if people believe the market can do $75 of operating earnings next year and they price the market at 16 times, then we will see 1200 on the S&P. Sentiment is a strange thing. Personally I don't believe, but that counts for nothing if others with big money do.
It's also possible that we only do $60 operating earnings next and the market trades on 10 times. That inverted risk reward ratio does look too clever to me, but what do I know?
What happened to all those smart asses saying 50-60?
Roubini, etc...
I'm an average Joe working in a cube farm (well not really, but sort of.) "Stock market is up!" looks OK to me. I'm not in the market, I don't personally care, but maybe people who have money to spend will go ahead and spend it now that their animal spirits are all jacked up.
I understand that the markets are broken and the charts are a big lie. I totally get it. I understand the FED and GS are cooking the books big time, and I understand how they are going about it. I understand something of why the FED are doing it, and GS' motives are as clear as day.
But in the big picture I don't care particularly who makes money day-trading or how much the shorts have been shafted. If the FED+GS can take the markets up 10% a month forever, that is fine with me. It's all a fiction now, the numbers mean nothing. The currency is a fiction, animal spirits are a fiction, monetary policy is a fiction, consumer confidence is a fiction. The big banks are insolvent but not unless you look so don't look, problem solved.
The economy was a fiction starting early in the last century, and a lot of the gains since WW2 came not from financial acumen or the unseen hand of a free market, but from the free availability of fossil fuels to drive growth at 3-5% annually. Will it all come crashing down now? Meh... maybe, but maybe not. Who defines "crash" anyway? Who runs the market and toward what goal? They get whatever they want, and CNBC report it with a happy spin. It's fiction, but when you believe a lie long enough it becomes the truth.
cougar
Cougar, is your real name Ben? :-)
10 year yield go zoom zoom.
What is wrong with this place? Its turning into a nuthouse.
The dollar falling isn't necessarily a bad thing. It means the "safe haven" aspect of the currency is being unwound. It means risk taking is returning to the world. That isn't a bad thing people.
When you hit $150 on crude again and $4 gas, let me know if you still think it's a good thing?
I agree. This is turning into a nuthouse. However, not in the same context as the writer implies. This site is a place where people who devoted time to learning economics can go to vent after watching everything they know go up in smoke.
The Dollar going down can be a good thing as it was post LTCM in 1998. But that Dollar move is now a part of a liquidity-driven sequel to the commodities parabolic.
At some point, the idea that people are re-risking has to be back up by common sense...and Zero-Hedge serves to remind people that it is not.
I have some ZIM dollars I would like to sell you...
people are fleeing the dollar, ...
"What is wrong with this place? Its turning into a nuthouse. The dollar falling isn't necessarily a bad thing."
yours is a self-fulfilling comment
It would be so easy for the Fed to support the dollar from collapse. Just raise the Fed Funds target to 0.5%. Who would be hurt? I mean mortgage rates are going up from 5% NOW. Oh I forgot - those darling banks cant survive unless they can borrow at 0% . What an absolute outrage.
perhaps this is just a game of chicken with the foreign central banks? If they are unhappy with the dollar going down - they can sell other currencies, buy the dollar - and oh yes - buy some treasuries at the auction next week.
How convenient - imagine that?
Quick someone check the computers, the market did a down move for more than a second
The selling programs have been rebooted within the market matrix. All upside prints are on account of the stupid human animal and it's predisposition for herd-like behavior.
Unrelated. Why is GE firing 6000 if the economy is about to leap skywards?
because they want to provide an opportunity for 2000- slaves down in unmentioned 3 rd world country!
http://blogs.reuters.com/rolfe-winkler/2009/08/03/george-magnus-opus/
q. what can cause our equities to decouple from the currency?
irrational exuberance
IMHO - The best thing Ben and Friends can do is just add some degree of stability - Exchange Rates, Commodity Prices, Etc, etc - I rates
With the huge interest rate swings, FX swings and Hard asset price changes. NO reasonable business can function in the US, India, China, UK or any place in the world.
The dynamics will destroy the free market system.
If the US hits slight inflation - the rest of the world WILL burst into flames... thus the prediction of one world order / currency is self assuring - as you can not grow the US Gov. Debt and still inflate the problem away without re-pricing commodities in some other FX peg.
Only a billion shares traded on NYSE. Where the fuck is the volume? Has it been siphoned off by other exchanges like ICE or has buy-side interest simply dropped off a cliff?
I've made the same comment here a number of times: who would buy a market that has rallied 125 S&P points or 1000 dow points or whatever in 3 weeks - without any real pull back?
The chinese are buying equities, beats holding dollars!
BATS Trading & Direct Edge.
yeah - lets not forget the Chinese Yuan is linked to the Dollar - hard peg. So the Chinese Yuan is also weak as hell right now. And they have an inherently higher growth economy at an earlier stage of development. They have also pumped in a loyt of fiscal stimulus and have a huge property bubble. I would worry more about China with such a weak currency than the US.
excellent point in my view. i think china is headed for big problems, particularly with their banks/lending standards.
Lending problems in China?
I am sure that when the time arrives the records will go the way of all those AIG side letters. China will just say that there are no bad loans and their PMI is up 10 points. Who in power wants facts? They just clutter up the situation needlessly. Just ask Ben, Hank, Timmy or the rest.
Are they going to get an exact print of S&P 1000.00 at close?
This will make the markets interesting: SIGTARP raid on a bank in Florida...
http://market-ticker.denninger.net/archives/1286-FLASH-FBI-RAID!-Colonial-Bank-Building,-Orlando.html
We have more buyers than sellers. That is what I think is going on
Churning a few shorts to be forced into being buyers with lack of any real sellers.
For every buy there is a sell. So there can't be more buyers than sellers.
Bernanke and the FED should change the US anthem to "Forever Blowing Bubbles"
Is it me, or was that THE most pathetic break of an important key level ever?
must hold above 1005 by my reckoning or down she goes
...tomorrow?
this market is so funny.
short the stock market
These new dynamics are sure hard to get accustomed to!
look at the volume ))
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3186525&cmd=...[s172095860]&disp=P
Ah hell, nothing else makes much sense so I am not too concerned if this is the right place for this.
What could go wrong.
http://www.huffingtonpost.com/2009/08/03/tax-revenues-post-biggest_n_250...
"
The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation's plate and struggling to find money to pay the tab.
The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.
"
On a probably unrelated note:
http://www.cnbc.com/id/32273119
"
The Treasury Department on Monday reduced its borrowing estimate in the current July-September quarter by $109 billion, some rare good news about the government's financial needs.
Borrowing will reach $406 billion in the third quarter, the department said, down from its April estimate of $515 billion. The projected borrowing, while significant, is below the record $530 billion it borrowed in the same period in 2008.
"
Pete
i saw the treasury note when it flashed this p.m....my first thought is that maybe they are just a little worried about the wholesale sprint away from treasuries or they got another call from our chinese overlords.
No doubt.
I suspect that treasuries, like so many other "market" segments will rebound once it hits its trading range point. In the case of the 10 about 3.80+/-. Like so many areas of the current environment the flow is in running within the range and cleaning out the flow chum followers.
Thoughts DH...
honestly don't know what to think anymore, except that the markets have dramatically changed and that the manipulation (primarily the government interventions) is gonna come back to haunt everyone. toooooo much gov't means toooo many problems.
as to treasuries, there will be some bad news event(s) that drives money back there, out of equities, rinse and repeat.
Thanks for your thoughts DH.
Yes indeed. This situation in total is a rinse & repeat structure. The money centers almost lost it and their privately owned institutions, the central bank and the federal government collectively came up with this PSYOP as a means to snag the trillions they needed to keep the good ship lollypop running a bit longer.
Agreed that too much gov't = too many problems. Unfortunately, the folks that are our market makers and liquidity providers have placed all of us in the position of support them and their PSYOP or crash and burn.
The hits just keep on rolling.
i follow the banking sector pretty closely....it's going to be hysterical to watch how the US gov't completely phucks up with Citi, AIG and they are really getting themselves involved with BAC. Don't get me wrong, those institutions blew it already but the government will make it even worse.
We have not seen anything yet... Just wait for the Commercial Real Estate Emergency funding Program or C.R.E.E.P. with a sweeter for Conrad & Grassley for the AG states to insure the winter wheat can get in for C.R.E.E.P./AG.. Fund it at about 210-310 at 10:1 and there that one is. Have Darrell Issa and Carolyn Maloney co-author the house version and Thune and Feinstein do the senate side... With the provision for emergency assistance to CA growers who lost their crop to the water shortage of course...
dude
The PE spreadsheet on the S&P website has been updated. Amazingly between 7/23 and 7/31 the As Reported Earnings Estimates have almost doubled for Q2 from $7.27 per share to $13.72. PE now stands at 127.58 for Q2 based on this new estimate. Surprisingly, operating earnings estimates only increased by 12 cents per shares. It's magic... numbers magic.
Is that why a lot of CEO of big companies are selling their stock in this rally look at FedX, 6.5 million, Boston Properties 21.5 million Capital One CEO and board of directors Direct TV , General Mills, Apol Group, Gild Science all in the last three days is the dollar crash soon and where to put the worthless dollar at???