This page has been archived and commenting is disabled.

What The Hell Was That?

Tyler Durden's picture


Forget stocks, gold, and oil. The story of the day was the EURUSD, and the various trading desks that blew up are a result of the 2.4% move in the pair... What the hell happened there? The confluence of the LTRO termination, today's MRO, end of quarter, the official descent into a double dip for the US, and who knows what else, apparently ended up blowing up one or more players. That, or someone gave Jerome Kerviel direct access to the RBS FX trading desk... well, unlikely, but someone in SocGen is very unhappy with the bank's short EURUSD positions. Note how every pair had a mind of its own today. The last time this happened was September 16, 2008. Also, as much as we love him, we can't help but feel for F/X Concepts John Taylor (if only for the ultra short-term; he will most certainly be proven right as all fiat hits parity with each other at +/- 0).

EURCHF: note the anomaly early in the day

And the only normal pair of the day, AUDJPY.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 07/01/2010 - 16:19 | 447446 FranSix
FranSix's picture

Euro melt-up day.

Thu, 07/01/2010 - 16:19 | 447447 johngaltfla
johngaltfla's picture

The shorts collected their beer money.

They will be drinking Red Stripe in the islands, (although I prefer Piton Beer in St. Lucia) while the schmucks will be wondering why the market did what it did. You and I both know this biotch is heading for the 900's on the S&P and the shorts will make a fortune again in September as the panic returns.

Especially as Doctor "Bones" McCoy announces his prognosis on the U.S. consumer:

"He's dead Jim."

Thu, 07/01/2010 - 16:33 | 447501 bonddude
bonddude's picture

"Dammit Jim, I'm a doctor not a magician !"

Thu, 07/01/2010 - 16:57 | 447576 Thomas
Thomas's picture

"Just keep your Vulcan hands off my gold."

($45 per ounce equates to Death by Bongo.)

Thu, 07/01/2010 - 17:04 | 447594 TBT or not TBT
TBT or not TBT's picture

A lot of red shirts died to make this funny.

Thu, 07/01/2010 - 18:04 | 447730 Quinvarius
Quinvarius's picture

If you two don't fight,...I will kill you both.

Thu, 07/01/2010 - 18:19 | 447757 sandflea
sandflea's picture

...if McCoy can cure xenopolycythemia...

Thu, 07/01/2010 - 18:25 | 447762 Temporalist
Thu, 07/01/2010 - 20:01 | 447934 juangrande
juangrande's picture

I'm a doctor not a sperm whale!

Thu, 07/01/2010 - 20:25 | 447977 Problem Is
Problem Is's picture

"They will be drinking Red Stripe...while the schmucks will be wondering why the market did what it did."

Well it will give the "schmucks" something to talk about over a Natural Lite and a PBR...

Thu, 07/01/2010 - 16:20 | 447454 Mark McGoldrick
Mark McGoldrick's picture

"...or someone gave Jerome Kerviel direct access to the RBS FX trading desk...'


Thu, 07/01/2010 - 16:23 | 447455 bob_dabolina
bob_dabolina's picture

EUR/USD could easily go to 1.50


But I've only been saying this for the last month

Thu, 07/01/2010 - 16:33 | 447503 Sudden Debt
Sudden Debt's picture

anything is possible, it could even go to 3 to 1 but also to 1 to 3. The EURO and the DOLLAR are like 2 woman that sometimes are friends, sometimes are enemies and neither one makes any sence and both have constant mood swings.

Thu, 07/01/2010 - 17:06 | 447600 TBT or not TBT
TBT or not TBT's picture

So the dollar is short the dollar for three or four days.  Go!

Thu, 07/01/2010 - 17:09 | 447606 Sudden Debt
Sudden Debt's picture

That's actually very logical and almost a sure thing. But I'm not going to do that as I'm already over my head as it is right now. And today again it go my ass kicked like a little fat kid in kindergarden

Thu, 07/01/2010 - 23:05 | 448306 Crummy
Crummy's picture

Currencies are filthy whores, you spend a little shiny metal on them and they fall to their knees faster than a Sunday school teacher on judgment day.

Thu, 07/01/2010 - 18:17 | 447752 thegreatsatan
thegreatsatan's picture

Of course its going to 1.50, didn't you hear Greenspan  on CNBS talking smack about the Euro.

Thu, 07/01/2010 - 20:29 | 447985 DosZap
DosZap's picture


Me also, "The rumors of my demise have been greatly exaggerated"...................

Thu, 07/01/2010 - 16:21 | 447456 faustian bargain
faustian bargain's picture

Is it just me, or does more crazy stuff happen on Thursdays than other days?

Thu, 07/01/2010 - 16:24 | 447470 Cheeky Bastard
Cheeky Bastard's picture

You're thinking Fridays. I was just ranting about how fucked up Fridays have become in the last 2 months.

Thu, 07/01/2010 - 16:28 | 447485 Commander Cody
Commander Cody's picture

I'm thinking Thunderdome.

Thu, 07/01/2010 - 16:40 | 447529 johngaltfla
johngaltfla's picture

Today was a Friday for most traders not married to conventional thinking.

Thu, 07/01/2010 - 17:03 | 447591 RacerX
RacerX's picture

Thursday is the New Friday

Thu, 07/01/2010 - 17:18 | 447629 Sudden Debt
Sudden Debt's picture

Whatever happens on fridays, every friday is still happy hour day starting at 20 o'clock. And as we are getting into the summer the woman start wearing less and less textiles so that should put your mind at easy while you get hammered.

So not all is bad :)

Thu, 07/01/2010 - 16:34 | 447508 Sudden Debt
Sudden Debt's picture

For me it's starts every day from 9 o'clock till 16 o'clock :)

Thu, 07/01/2010 - 16:38 | 447519 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Personally I like the Tuesdays

Thu, 07/01/2010 - 16:22 | 447458 Cheeky Bastard
Cheeky Bastard's picture

I could be very wrong about this but; consider the fact BNP had a very very very bearish long-term EUR outlook and AFAIK they are the French version of JPM; now is it really that unlikely that BNP actually [and not SocGen] blew up this afternoon. I have no quantifiable data to back this up [except that it was up by more than 2%, and CDS was in line with the broader market]; im just speculating here.

Thu, 07/01/2010 - 16:29 | 447489 Tyler Durden
Tyler Durden's picture

BNP was selling the sub-parity trade. Come on Cheeky.

Thu, 07/01/2010 - 16:36 | 447512 bonddude
bonddude's picture

Hey it's a sub party. First one who throws up gets shot out of tube number 1. Wooo Hoooo

Thu, 07/01/2010 - 16:43 | 447537 Cheeky Bastard
Cheeky Bastard's picture

Point taken.

Thu, 07/01/2010 - 21:51 | 448134 MrTrader
MrTrader's picture

In plain German : Die Franzosen gucken jetzt ganz schön blöd aus der Wäsche...:=)))

Thu, 07/01/2010 - 16:22 | 447462 Ripped Chunk
Ripped Chunk's picture

Market? What's that?

Thu, 07/01/2010 - 16:25 | 447474 Shameful
Shameful's picture

Score!  I bought my vacation Lats yesterday! (Lat is pegged to Euro).  Win one for the good guys!

Thu, 07/01/2010 - 16:30 | 447495 Catullus
Catullus's picture

That's your 2% hit european traders took today in US equity markets. Checkmate, fed. You actually can't print your way out of this one.

Show up to work tomorrow, traders. You don't want this thing going bidless or letting the new MBA grad driving.

Thu, 07/01/2010 - 16:37 | 447518 Sudden Debt
Sudden Debt's picture

"You can't" is banned now in America. When Obama said "YES WE CAN" he was actually talking to any "patriotic" company in America :)

Thu, 07/01/2010 - 16:31 | 447498 weenus
weenus's picture

short euro just too obvious now the squeeze

Thu, 07/01/2010 - 17:10 | 447608 TBT or not TBT
TBT or not TBT's picture

Watch it!   Don't mess with our convictions, especially while we're losing money.

Thu, 07/01/2010 - 17:22 | 447643 Sudden Debt
Sudden Debt's picture

At least losing money is still a sure thing. I haven't checked my account for 2 weeks now.

Thu, 07/01/2010 - 16:35 | 447510 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Die die, die my doelarr

Don't utter a single wo-herd

Die die, die my doelarr

Just shut your pretty mouth

I'll be seeing you again...

I'll be seeing you, in hell!

Don't cry to me oh baby
Your future's in an oblong box, yeah
Don't cry to me oh baby
Should have seen it a-comin' on
Don't cry to me oh baby
I don't know it was in your power
Don't cry to me oh baby
Dead-end girl for a dead-end guy
Don't cry to me oh baby
Now your life drains on the floor
Don't cry to me oh baby

Thu, 07/01/2010 - 16:36 | 447513 Traianus Augustus
Traianus Augustus's picture

Extreme moves like these appear to be signs of desperation due to the lack of liquidity some markets are now facing. IMO, if this is not another setup by the CBs, then moves like today will be the norm going forward.  Ladies and Gentlemen we may be exiting the eye of the storm.

Thu, 07/01/2010 - 17:20 | 447633 Gordon_Gekko
Gordon_Gekko's picture


Thu, 07/01/2010 - 17:25 | 447650 Sudden Debt
Sudden Debt's picture

Ladies and Gentlemen we may be exiting the eye of the storm.

I'm sure you want that to sound positive right? :)

Thu, 07/01/2010 - 17:26 | 447652 Mr Lennon Hendrix
Mr Lennon Hendrix's picture


Thu, 07/01/2010 - 16:40 | 447525 Young
Young's picture

Check the /DX = Was totally overbought in its range

Check the EUR/USD = Breakout from flag pattern

Best thing of all = Young caught a majority of the move ;)

As to who bought the Euro, fuck if I know...

Thu, 07/01/2010 - 16:41 | 447533 hellboy
hellboy's picture

I was waiting for this post to come all day... man wtf...

Thu, 07/01/2010 - 16:41 | 447534 godfader
godfader's picture

Look at Dec 2008 when Soros was sqeezing the EUR to the upside, the chart looked like the Eiffeltower.

Thu, 07/01/2010 - 16:44 | 447541 lsbumblebee
lsbumblebee's picture

Buy the dip in gold now before the asian market opens and moves the price back up.

Or, you can wait until tomorrow morning at 8:20 AM EDT in New York for the next dip.

Thu, 07/01/2010 - 16:57 | 447577 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

For those not in the market, buying today, tomorrow, and Tuesday would be the best move.  The prices could continue falling through Tuesday (if that happens, equities will be down so big it could really start the final collapse).  As the money flees all assets, it will find gold; the question is, where?  $1200?  The gold price will not fall below $1135, and if the bottom falls out of equities and the dollar, it could reverberate as a huge spike in PM prices.  Tomorrow will be interesting, and Tuesday even more so.

If you are in, think about your overall buy in price, and consider where to put any spare cash.  I think Platinum has held up very well (as I had been saying it was going to do) and it may be the best buy right now.  Can't discount gold though, and considering I still think we are only months away from silver doubling this fall into winter from $18 to $36 (this by Dec 25th) it may be time to load up on that.  Decisions, decisions!

Thu, 07/01/2010 - 21:55 | 448145 Eric Cartman
Eric Cartman's picture

But if a lot of short covering was one of the reasons gold was hit so hard today (as investors had to sell their gold to meet margin requirements) than why would I want to be so quick to jump into gold again right now? If what you say plays out and equities tank along with the Euro looking like it will continue to make new highs, than more short covering should happen and therefore gold prices may still far more before they recover. If anything, just short the market, then buy Gold or Platinum next week.  

Thu, 07/01/2010 - 16:58 | 447578 Clayton Bigsby
Clayton Bigsby's picture

done and done - Clayton gonna git paid

Thu, 07/01/2010 - 17:37 | 447674 gmrpeabody
gmrpeabody's picture


Thu, 07/01/2010 - 22:42 | 448254 Mark Beck
Mark Beck's picture

5% easy turn over next 4 sessions.

But, enough excitement.

The boring daily grind of looking at the Financial Sector.

My vote, effects = Q2 reporting.

I am looking to see weakness in financials through this reporting session. I feel the Q1 to Q2 foundation for Q3 forecast will be so untraditional all confidence will be lost. I expect to see the huge red flag of fundamental differences in financials relative to management strategy. It just won't add up. Even for the mutual fund critters.

Mark Beck

Thu, 07/01/2010 - 16:45 | 447546 lechmm
lechmm's picture

I thought you had earlier said, TD, that this was (only) an Euro "liquidity issue"! (I understand this to be a temporary issue and that the downtrend will continue?)

Thu, 07/01/2010 - 16:46 | 447549 newstreet
newstreet's picture

And we still have the NFP tomorrow morning!

Thu, 07/01/2010 - 16:47 | 447551 Nihilarian
Nihilarian's picture

What about USDJPY? You think Bank of Japan will let it slip below 85?

Thu, 07/01/2010 - 16:51 | 447558 johngaltfla
johngaltfla's picture

I hope so. That will cause the bear trap to slam hard baby. Tease the SPX back to 1046ish, get the bubbleheads talking sexy, then BLOOIE (Cleaned up technical term for a type of painful sex given to bulls who don't read charts).

Thu, 07/01/2010 - 16:55 | 447570 ksolksol
ksolksol's picture

Tyler, John Taylor is actually long right now... at least as of a couple of days ago. According to Bloomberg, he is a nervous long. He also expect the EURUSD to get crushed in Sept and reach parity by year end.

Thu, 07/01/2010 - 17:00 | 447584 fiftybagger
fiftybagger's picture

As LEAP 20/20 has been saying all along, Euro weakness is a U.S. lead diversion from the real elephant in the room, the collapse of America.

Thu, 07/01/2010 - 17:01 | 447585 cougar_w
cougar_w's picture

And Lo, the angel then opened the seventh seal upon the earth and upon the deeps of the seas and all kinda shit went down. And the masses were all like wtf lulz. And The Beard did rejoice for the doelarr fell into the inferno and was consumed. But ere the next day of the trials was much lamentation for the shiny shit doth lost its value and men were cast into disbelief, tore their garments, and drank scotch until their eyes did bulge.

Wherein, it would become a long weekend.

Thu, 07/01/2010 - 17:33 | 447649 MsCreant
MsCreant's picture

Yeah verily, tis funny shit, as lulz spring forth, quaking my chest and other such dipshittery. Alas, there is more telling of the tell to be told:

And they went forth that day, their mouths fouled by puke, their heads throbbing, looking for their retirement accounts and there were none. And they beseeched each other "WTF" and then gathered unto cyberspace to check their regular bank accounts, unto which they, yup verily, had no access. And they marched unto their banks and heard it proclaimed that there was a special holiday, more special than independence day, all throughout the land...

Thu, 07/01/2010 - 17:39 | 447679 gmrpeabody
gmrpeabody's picture



Thu, 07/01/2010 - 17:46 | 447693 cougar_w
cougar_w's picture

Epic lulz. As expected of MC-sempai

Thu, 07/01/2010 - 20:12 | 447956 MsCreant
MsCreant's picture

The creative impulse was yours, the rules of the game set by your example. I merely riffed off your jazz. ;-)

Thu, 07/01/2010 - 18:10 | 447743 faustian bargain
faustian bargain's picture

"yup verily." that's a keeper.

Thu, 07/01/2010 - 18:43 | 447802 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

" is there a chance I can get my monie out?"  "Special as in we have changed the definition of monie.  Please come back next week to find out the name of the new exchange."  The teller leans in and whispers, "Rumor has it they will be called credits!"  She shrugs her shoulders.

Thu, 07/01/2010 - 20:09 | 447951 spekulatn
spekulatn's picture


Ding ding ding. We have a winner.

Well done MsCreant and cougar_w

Thu, 07/01/2010 - 20:40 | 448009 DosZap
DosZap's picture

Is that you Private Pyle?........

Yes, a well done indeed,verily we sayeth unto thee.

Thu, 07/01/2010 - 18:41 | 447794 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Thumbs up!

Thu, 07/01/2010 - 19:11 | 447848 barkingbill
barkingbill's picture

i figured out what went up today, scotch....

Thu, 07/01/2010 - 17:09 | 447602 tecno242
tecno242's picture

definitely sourced in Europe cause it started moving at midnight in the US, 6 a.m. in Europe.

looks like a scramble for liquidity. 

someone needed out of investments and in Euro's and like right now.

CAC 40 took the largest hit % wise... and guess who's in the CAC 40.


Thu, 07/01/2010 - 17:24 | 447638 All_Is_Well
All_Is_Well's picture

Yea, cause when the death cross occurs it's lights out!

And it's gonna happen unless BB prints up about 20 tril. by Tuesday.

Thu, 07/01/2010 - 17:10 | 447607 kote
kote's picture

Hey guys is this bullish?


Put/Call Ratio (1 Day)


Put/Call Ratio (30 Day)


Thu, 07/01/2010 - 17:14 | 447616 Geoff-UK
Geoff-UK's picture

Hmm...should I bet on the Euro gaining on the USD, or vice versa?

Maybe I'd be better off arbing the $50 chips at the MGM Grand versus the $50 chips at the Venetian...least I know it's more difficult for one of them to make more chips.


Thu, 07/01/2010 - 17:17 | 447623 tecno242
tecno242's picture

I wouldn't bet on either one..

cause as witnessed today, you can get railroaded in day or even an hour by someone blowing up.

and it could go either direction.. and you have no way of assigning any level of risk to how many or who may be near blowing up and what direction they may drive a currency if they do.

Thu, 07/01/2010 - 17:33 | 447669 Hansel
Hansel's picture


Thu, 07/01/2010 - 21:58 | 448155 Eric Cartman
Eric Cartman's picture

I'd saw bet on the Euro for now. That's my plan but I won't be very agressive.

Thu, 07/01/2010 - 17:20 | 447636 Gordon_Gekko
Gordon_Gekko's picture

Let it burn...

Thu, 07/01/2010 - 17:24 | 447645 Djirk
Djirk's picture

just a WAG, but if the € is back stopped by the ECB and has a higher yield than the USD, is this the new carry trade? Could be easy (short term) money, but stay alert young ones.

Thu, 07/01/2010 - 17:24 | 447647 Mr.Kowalski
Mr.Kowalski's picture

LTRO ended.

Deflation begins.

LIBOR rises; Spanish, Greek and Portugese banks frozen out of interbank lending.

Trichet pleads for QE; Alex Weber (via Frau Merkel) politely decline and crack open a few kegs to watch the crucifixion of Greece, Spain and Portugal.. look for Trichet to approach Weber upon bent knee by mid-July.  


Thu, 07/01/2010 - 17:26 | 447651 Leo Kolivakis
Leo Kolivakis's picture

Will reverse course after tomorrow's NFP. Short euros going into that report.

Thu, 07/01/2010 - 17:26 | 447656 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Leo, I really hope you own gold...I am sure you have some....tell me you have some physical.

Thu, 07/01/2010 - 20:06 | 447943 ZeroPower
ZeroPower's picture

You still haven't man'd up and apologized after being completely wrong a few weeks ago regarding jobs.

No worries though, we didn't expect it. Keep on buying on the dips man, someone's gotta buy those short covers

Thu, 07/01/2010 - 21:59 | 448158 Eric Cartman
Eric Cartman's picture

lol I thought you only liked to rip on little kids like myself.

Thu, 07/01/2010 - 17:29 | 447659 mcguire
mcguire's picture

i think the premise of the post is wrong.  sometimes there are multiple simultaneous disease processes, but most of the time, there is an central underlying disease process. 


i dont have the answer, but i think you cant say "forget oil, gold, and the market"...  it must be all tied together... per above, "Euro weakness is a U.S. lead diversion from the real elephant in the room, the collapse of America"... the collapse of america does explain much of the action... except the boyancy in the equity market, /that/ should have been more dramatic...  perhaps tomorrow??

Thu, 07/01/2010 - 17:34 | 447670 steve from virginia
steve from virginia's picture

Where have we seen this before?

Just a short squeeze ...

Thu, 07/01/2010 - 17:40 | 447682 TexDenim
TexDenim's picture

Drinks and dinner in Paris a few dollars more, helas.......

Thu, 07/01/2010 - 18:07 | 447738 DavidC
DavidC's picture

It's going to be SO interesting to see what Goldman's quarter's profits and number of successful trading days will be.

100% successful and all days over $100m?


Thu, 07/01/2010 - 18:24 | 447766 Brother Revegen...
Brother Revegend Magoun's picture

Why EUR? it is not EUR that grows, it is USD that falls.. against EUR, GBP

Thu, 07/01/2010 - 18:34 | 447776 iPood
iPood's picture

      It's not that complicated, when you don't try to bias the news with only headline grabbing doom and gloom scenarios-

July 1 (Reuters) - The euro rose 2 percent against the dollar on Thursday in its biggest one-day percentage gain since May 19 at current prices.

The euro was supported after European banks borrowed less money than expected from a European Central Bank's tender, cooling concerns over euro zone banks' funding issues. 

Madrid's ability to sell five-year bonds following Moody's Investors Service decision on Wednesday to put Spain's sovereign rating on review for possible downgrade added to euro optimism.

     Truth is the perennial euro bears and gold bulls got caught as overextended as the central banks they're bashing. The DAX is not even flirting with the lower edge of its trading range, unlike the DOW, a divergence that few have noted contradicts the imminent collapse of the EU.

  The latest panic cry from the Henny Penny Hedge group calls for massive global deflation... so now sell all that gold, buy sub-3 T-bonds (even though the obligor would likely have to devalue its currency in such a scenario) and short stocks.   Lumber limit up on the Merc, post hurricane contango, eye popping rallies in certain grains (wheat up 10% in the last 2 days!), CRY 360% off its lows (130% above the '09 low) and a TIPS spread hanging in at 1.85 (albiet off 2 beeps). Anecdotally, have you tried to book an airline ticket recently? (Don't try to do so on a new-Iphone because they are sold out.) 

    A higher than expected payroll number will no doubt scurry the masses  portside, listing the USS Panic back to inflation fears. Go ahead and bash away..



Thu, 07/01/2010 - 20:00 | 447932 PBRmeASAP
PBRmeASAP's picture

Ah-greed!!! Guess what? The economy is humming, the States in the US are realizing things and getting their act together before it's too late... And the DAX? Well, I'd be pretty happy if I were a German exporter these days.  Oh yes, the ECB may be dumb, but they're not stupid; the European QE is on the way.


Thu, 07/01/2010 - 20:12 | 447958 ZeroPower
ZeroPower's picture

eye popping rallies in certain grains (wheat up 10% in the last 2 days!)

Grains? You DO realize that is THE single worst economic indicator possible regarding and upswing in activity. Farmers (actually) hedge the shit out of their crops with futures. You cant say that for oil, pork, or PM farmers now can you? So your point is moot.

More importantly...Hows copper? Hows slv and gld? Hows oil? All down.

Since you mention yields (TIPS, lol come on) how are the 3s or 10s doing?

Anecdotally, no i haven't had a problem booking any sort of ticket on this end. Paying more than i thought i would be but hey its summer right. 

Fri, 07/02/2010 - 01:34 | 448523 Eric Cartman
Eric Cartman's picture

ZeroPower, I like you, you introduced me to think or swim (since I can't afford the bloomberg terminal) and you even told my dumbass what ES stood for but I have to say... You seem shaken up somewhat. You have sand in your vagina? 

Fri, 07/02/2010 - 10:09 | 449006 ZeroPower
ZeroPower's picture

My vagina's clean thanks for being (bi)curious.

Glad i could help, and as to your point above, youre right i dont only pick on little kids. Didnt think 8yr olds have an interest in finnanns.

Thu, 07/01/2010 - 19:05 | 447832 firstdivision
firstdivision's picture

I haven't read most of the comments, and I am sure someone already mentioned this, but I am going to say that it looks like a QE was just priced in on the dollar.

Thu, 07/01/2010 - 19:13 | 447853 hambone
hambone's picture

That was my fear as well that we may have just flipped the coin and gone from Europe bad to US badder (totally contradicting part of my diatribe above about why dollar should be stronger against Euro...unless, you price in infinite QE and then Dollaer badder again than gooder badder Euro).

I feel like we are all the children of abusive parents (CB's) and it's only that one does it by physical (printing) and one by mental abuse (not printing).

I want my mommy...and after shorting success going back into fetal postition net nuetral.

Thu, 07/01/2010 - 19:56 | 447928 mcguire
mcguire's picture

how does the gold price fit in with this argument... if qe is priced in, gold should have been higher.

Thu, 07/01/2010 - 21:25 | 448092 Bonesetter Brown
Bonesetter Brown's picture

Get your heads around this: when the 10 yr is below 3% and mortgages are at a 50 year low, the Federal Reserve has absolutely zero need to announce QE2.  Read Irving Fisher's paper on debt driven deflationary depressions.  The interest rates on perceived good credits go down (value of the item goes up); the interest rates on perceived bad credits go up (value of the item goes down).

This is exactly why USD/Treasuries/gold have been generally climbing together (perceived safe), and why the Euro and Euro sovereing debt have been generally falling (perceived not safe). 

The closest thing to a new QE is the reopening of the Fed FX swap lines.  Read the latest H.4.1 just published this afternoon.  No change in the FX swap lines; basically nothing drawn on those swap lines. 

To me that indicates that the Euro situation isn't as bad as feared, or that there is something else going on behind the scenes that is working against a draw on those lines.

Thu, 07/01/2010 - 21:56 | 448148 MrTrader
MrTrader's picture

@Bonsetter Brown : Can you arrange a 2yr Swap for me ? Paying LIBOR +300 bp, so I can finance a little short covering rally a la GS, JPM, C and BAC prop trading desks...Repayment in2 yr : 500 % performance net of of fees...

Thu, 07/01/2010 - 19:32 | 447885 barkingbill
barkingbill's picture

there was an article going around about the UN suggesting the dollar shouldnt be the reserve currency


here it is:

more things like this could really change the perception of the dollar...but im not sure...

Thu, 07/01/2010 - 19:37 | 447895 mogul rider
mogul rider's picture

I luv the Matrix it makes feel I"m in control. Now gold drops 45 bucks. I'm being forced to buy more gold all the way to 912. damn banksters, they keep making me rich.

The herds run to Benrnake and Obama toilet paper to protect themselves and the banksters buy up all the gold that falls tot he floor.


Damn the're good.

Thu, 07/01/2010 - 19:55 | 447927 frog
frog's picture

uh, ya need a new dollar, oh nevermind, it's still paper

Thu, 07/01/2010 - 20:05 | 447940 mcguire
mcguire's picture

-"what do you do when there is no way out?"

-"find a way to go deeper in"


-the international

Thu, 07/01/2010 - 20:43 | 448017 RedwoodTree
RedwoodTree's picture

First, WTF is wrong with ZH captcha shit: it gives me a fucking math equation that has a 4 digit answer and only allows 3 digits to be entered. WTF. Maybe subliminal msg or me not to post? :)

Next, NO ONE (except MAYBE the banksters, and them even mAYBE) has any FUCKiNG clue what will happen tomorrow, the next day, or the next next day, so stop pretending!

There are only these choices right now: a) long gold (and/or silver) or no position in anything (sidelines). There ARE NO other positions period.

Pick one and see it through...

I am not Chumba Bumba Numba Rotumba or anyone else

Thu, 07/01/2010 - 21:18 | 448075 DosZap
DosZap's picture

For those who do not follow Schiff........

Thu, 07/01/2010 - 21:38 | 448113 Bringin It
Bringin It's picture

To me it seems the EURUSD rebound is a consequence of the 3 rounds Merkel had to go through to get her candidate in place.  This coming after Europe chose to stick with austerity in Toronto.  Germans don't want to play destroy the currency?

Thu, 07/01/2010 - 22:16 | 448205 zen0
zen0's picture

so you guys are just sharp guys trying to figure out what the big boys are doing and trying to profit thereby?

The governor of the Bank of Canada (a Goldman alumnus) has taken over chairmanship of the Committee on the Global Financial System.


Fri, 07/02/2010 - 00:12 | 448426 cocoablini
cocoablini's picture

Like the gold market, there's money to be made when everyone is on the same side of the trade. If everyone is short euros, who stands to benefit?
The gold market gets shotdown in a massive bull run- insiders clean up and rinse and repeat.
And if there is a liquidity squeeze in euros, the US Fed has promised 1 trillion in dollars to help banks cover their euro positions. Libor has basically jumped for euro banks so the Fed sprays cheap dollars as collateral exchange. Remember, ECB can't print infinitely like Bernanke- not easily. We print dollars to save euros- ain't that a gas?

Fri, 07/02/2010 - 01:09 | 448503 firstdivision
firstdivision's picture

We had the death cross occur in the ES, and looks like the SPX sets up to cross tomorrow barring any super taxpayer liquidity injection to move 40 handles. . 

Fri, 07/02/2010 - 01:28 | 448504 lawrence1
lawrence1's picture

An aspiring Shakespearean actor finally gets a tiny part of a play... upon hearing a cannon firing he is to declare, "Hark, I hear the cannon's roar!" He practices at home tirelessly, with endless variations... "HARK!I hear the cannon's roar" "Hark, I hear the cannon's ROAR" etc etc. At the final dress rehearsal he declaims his line convincingly when the cannon shot is indicated in the script and is very proud of himself. The next day, on the first performance, his time arrives when a very loud, taped cannon roar blasts... "Jesus Christ, what the hell was that!!" he shouts.

Fri, 07/02/2010 - 01:21 | 448513 Young
Young's picture

What's up with this buy platinum and palladium stuff... PL and PA has industrial uses, alas, economic slowdown, less demand for PL and PA... It might be "cheap" but it's still gonna get hit by the risk on/risk off trade.

Fri, 07/02/2010 - 02:35 | 448556 RedwoodTree
RedwoodTree's picture

Yes, I dumped all Platinum 2 days ago


I am not Chumba Bumba Numba Rotumba or anyone else...

Fri, 07/02/2010 - 07:56 | 448673 jkruffin
jkruffin's picture

Guys, its the perfect scam.  Think about it, what better way to get people to buy your shotty debt, and save the Euro at the same time?  Engineer a market crash......I know I spoke of this a few months back, and some other people did too, and low and behold here we are...

Sat, 08/21/2010 - 11:05 | 534685 herry
herry's picture

Certainly a lot of details like that to take into consideration. Thanks windows vps | cheap vps | cheap hosting | forex vps

Do NOT follow this link or you will be banned from the site!