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World FX Heatmap: Dollar Bloodbath

Tyler Durden's picture




 

Remember those days when the dollar plunging (and the yen surging) meant a daily unwind in the carry trade, and a plunge in stocks? Neither do wo. Stocks are valiantly trying to confirm they are the most useless instrument ever, with bonds surging, gold skyrocketting, and stocks... about to go green (which is only due to increased speculation by MS as we pointed out yesterday, that the Fed will announce QE2 in one week). In the meantime, implied correlation in FX is starting to follow that of stock, as global capital flows are now one.

USD heatmaps:

Yen heatmaps:

 

EUR heatmaps:

 

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Tue, 09/14/2010 - 10:43 | 580585 newstreet
newstreet's picture

I'm short Euros.

Ouch.

Tue, 09/14/2010 - 10:50 | 580603 explodinghead
explodinghead's picture

I was short eurs...ouch

Tue, 09/14/2010 - 11:02 | 580634 firstdivision
firstdivision's picture

Why did you not use the Goldman recommendation as contrarian? 

Tue, 09/14/2010 - 11:25 | 580708 Azannoth
Azannoth's picture

I get paid in euros but the minute i see the transfer I go buy gold

Tue, 09/14/2010 - 10:47 | 580586 Turd Ferguson
Turd Ferguson's picture

TD: Answer thyself.

http://www.zerohedge.com/article/primary-dealers-prepare-invest-27-billi...

Re the $, now that the USDX has rolled over and is thru 82, its clearly headed to 80. However, the chart looks so shitty I'm thinking it's heading back to the lows of last December.

Tue, 09/14/2010 - 10:49 | 580598 HelluvaEngineer
HelluvaEngineer's picture

OK, hyperinflationistas, please answer: if the world accepts that hyperinflation is GONNA happen, what will the initial and long term reaction of the stock market be?  Will it just ramp to 36,000, or crash first (and is there any historical precedent for any of this)?

Tue, 09/14/2010 - 10:54 | 580614 Turd Ferguson
Turd Ferguson's picture

Man, I have no idea. Can make a case for both a 30000 Dow and a 3000 Dow.

Therefore, the only stocks I own are junior miners.

Tue, 09/14/2010 - 11:04 | 580643 Theta_Burn
Theta_Burn's picture

JAG a steal at these prices

Tue, 09/14/2010 - 11:17 | 580682 Turd Ferguson
Turd Ferguson's picture

maybe but that's a shitty looking chart

Tue, 09/14/2010 - 10:59 | 580626 What_Me_Worry
What_Me_Worry's picture

As a card carrying hyperinflationista, I am not blinded by absolute values in the market as the yardstick of the effect of debasing.  All the numbers will be the same once things spiral.  $100 will be almost the same value as $1000 and $10000.

I have monopoly money here at home and the $1 note and the $500 note have the same value to me, in relationship to buying real assets I need in the world.  Only in the contained monopoly board are those notes looked at any differently when purchasing assets.

There will be a new currency created, anyways.  Virtually every government suffering from hyperinflation usually attempts to create a new(flawed) currency before accepting reality.

Tue, 09/14/2010 - 10:59 | 580628 Ragnarok
Ragnarok's picture

Marc Faber addressed this and used Mexico as an allegory.  At best you break even with (hyper)inflation.

 

http://www.youtube.com/watch?v=H0sS6a9RW2E&feature=player_embedded 

Tue, 09/14/2010 - 11:00 | 580631 SWRichmond
SWRichmond's picture

Real asset stocks would probably soar, while stocks of companies that sell two pounds of shit in a one pound bag (phones) will probably tumble.

Tue, 09/14/2010 - 11:05 | 580646 EscapeKey
EscapeKey's picture

Infrastructure, utilities, grocers... all equities representing essentials I would have thought would weather the storm in an acceptable way.

But pointless lucury consumer electronic makers, retail chains selling overpriced coffee, and other non-essentials would probably be lucky not to go to zero.

 

Tue, 09/14/2010 - 21:43 | 582213 Melson Nandela
Melson Nandela's picture

SBUX is probably a nice short with Coffee rockn' on..

Tue, 09/14/2010 - 11:07 | 580654 HarryWanger
HarryWanger's picture

Inflation pulls the markets higher. This has been the theory for the past couple of years. Yes, your money is worth less but you'll have more of it by buying stocks in an inflationary environment. Better than trying to short, lose money AND have inflation bite you even harder.

Tue, 09/14/2010 - 11:10 | 580662 firstdivision
firstdivision's picture

I believe we are approaching a hyper-stagflationary environment.  I have been proclaiming this for awhile now myself to friends.  Look to the 70's for our future. 

Tue, 09/14/2010 - 11:31 | 580727 r50fHBWjzxE2
r50fHBWjzxE2's picture

On the long run inflation will kill everything. If this would be any different, the US would be in much better shape today. The way the dollar was inflated since the FED has been founded is unprecedented and will lead to the complete abolishment of the dollar as the world reserve currency. Whether this is happening tomorrow or in 30 years time is everybody's guess.

Tue, 09/14/2010 - 13:21 | 581111 geminiRX
geminiRX's picture

I think we will have both inflation and deflation. Assets like houses, cars, appliances will be sucked into a deflationary environment whereas things such as food, oil, power, natural gas will succomb to inflationary pressures. Double trouble

Tue, 09/14/2010 - 11:36 | 580752 SteveNYC
SteveNYC's picture

By definition, if the world has ACCEPTED hyperinflation happening, the dollar would already be worthless, no?

There are so many ways this horrific clusterfuck Central Bank controlled Frankenstein could play out....

Tue, 09/14/2010 - 11:38 | 580761 SteveNYC
SteveNYC's picture

By definition, if the world has ACCEPTED hyperinflation happening, the dollar would already be worthless, no?

There are so many ways this horrific clusterfuck Central Bank controlled Frankenstein could play out....

Tue, 09/14/2010 - 12:14 | 580866 worldlymrb
worldlymrb's picture

DOW will be at 100K and a one oz of gold will be $100K for a 1 to 1 ratio.

Tue, 09/14/2010 - 15:10 | 581415 Yardfarmer
Yardfarmer's picture

our savant at Fort Dix, Martin Armstrong, has DOW at 36,000 before ultimate meltdown

Tue, 09/14/2010 - 10:49 | 580599 Spartan
Spartan's picture

And with Oil pushing back to $80/bbl the Fed's anti-stimulus just keeps taking...what exactly is the plan here?

Tue, 09/14/2010 - 10:50 | 580602 HelluvaEngineer
HelluvaEngineer's picture

1.) print money 2.) buy everything 3.) profit

Tue, 09/14/2010 - 10:54 | 580616 mikla
mikla's picture

+1

Tue, 09/14/2010 - 10:52 | 580608 PierreLegrand
PierreLegrand's picture

Gold Bitchez!!!

Tue, 09/14/2010 - 10:54 | 580610 HelluvaEngineer
HelluvaEngineer's picture

Also: odd - the party is not being extended to the financials today.

Tue, 09/14/2010 - 10:58 | 580623 AccreditedEYE
AccreditedEYE's picture

They NEED to pull back here to set up for the next attempt at a ramp higher. They've been running up in a straight line all month.

Tue, 09/14/2010 - 10:59 | 580629 HelluvaEngineer
HelluvaEngineer's picture

The S&P also needs to move up just a little bit more to touch the strong resistance overhead.  Hopefully this will coincide with complete buying exhaustion.

Tue, 09/14/2010 - 11:00 | 580633 sethco
sethco's picture

They had a party yesterday. slight hangover. a couple lines of FED coke at lunch and all's well...

Tue, 09/14/2010 - 10:54 | 580611 reading
reading's picture

Very bizarre action today...and that is saying something given how the "markets" have been acting lately.  This whole thing really has a bizarre feel to it.

Tue, 09/14/2010 - 11:05 | 580635 AccreditedEYE
AccreditedEYE's picture

we should stay "contained" at 2300 Naz, 1130 S&P... at least till the impending QE2 moment.

Tue, 09/14/2010 - 11:12 | 580666 iota
iota's picture

+many

Tue, 09/14/2010 - 22:07 | 582260 Melson Nandela
Melson Nandela's picture

I still can't get my head around TLT and GLD spiking at the same time. Someone is very, very wrong, and I'm waiting to take the short side against that lucky indiv.

Tue, 09/14/2010 - 10:57 | 580622 HEHEHE
HEHEHE's picture

Is there anything that MS has been right about in the past that would make anything they say believable.  Stephen Roach is the only guy at the whole place who has any credibility.

Tue, 09/14/2010 - 11:02 | 580641 firstdivision
firstdivision's picture

WTF is going on with the AUDJPY?

Tue, 09/14/2010 - 11:16 | 580681 qussl3
qussl3's picture

AUDJPY's got nothing the AUDUSD, the daily chart is going parabolic, pretty crazy.

Tue, 09/14/2010 - 11:10 | 580661 Ripped Chunk
Ripped Chunk's picture

Are we still looking to traditional market statistics and metrics to guide in a market that has been so totally manipulated by govt' and central bank manipulations? 

Tue, 09/14/2010 - 11:12 | 580668 plocequ1
plocequ1's picture

Ain't gonna work. The market will resume it's path to 36,000. I do admire Tylers persistence, But you can't fight the primal forces of nature. Ask Arthur Jensen. He'll tell you. Watch Network.

Tue, 09/14/2010 - 11:16 | 580677 trav7777
trav7777's picture

The currencies I normally watch revolve around the BRL.  I check the POG in BRL usually, sometimes in EUR and JPY just to get a sense of how "benchmarked" it is, because some of the emerging market currencies aren't being used to provide liquidity or mop up toxic debt.  The major CBs are active in the marketplace.

What I see is sustained gold momentum in all currencies.  I'm not seeing any weakness in paper that the dollar has traded down against.  We got 976 EUR, 105k JPY, 2156 BRL...these are all spitting distance from recent highs.

Meanwhile the AUD has shot back to .94, the CAD at .97, BRL at 1.7, but of yet no real crash in the POG in those currencies as a result of DXY weakness.

Tue, 09/14/2010 - 11:35 | 580745 Pool Shark
Pool Shark's picture

Trav,

I'm as much a gold bug as anyone here, but I don't consider 976 EUR to be "spitting distance" of the 1040+ EUR high from June. That's more than $82 USD below the previous high.

 

I guess it just shows that the gold bull still has a ways to go.

Tue, 09/14/2010 - 11:23 | 580702 tony bonn
tony bonn's picture

-1.62 in one day on the usd....i think john williams may have been a tad too conservative on the 6-9 months hyperinflation....even so, it will arrive...

if it destroys the bankster class, then bring it on, but i fear that it has designed it for its own evil ends....

Tue, 09/14/2010 - 12:22 | 580903 MachoMan
MachoMan's picture

we need some form of collective to keep them at bay...  difficult tight rope...  collusion never works in the end...  and our solidarity gets captured for a meager price.

Tue, 09/14/2010 - 11:30 | 580730 three chord sloth
three chord sloth's picture

The price finding function of all markets is broken. Too many manipulations and manipulators, too many rumors and chaff mixed in amongst the facts, too many cotton candy stats from too many clown car governments. It's all just throwing darts now.

Tue, 09/14/2010 - 12:00 | 580828 proLiberty
proLiberty's picture

When all the central banks on earth each issue fiat money, the meta-risk is co-inflation.  When each bank inflates at roughly the same rate, the FX cross should not change very much, but the price level in nominal currency units will rise in all currencies.   Beyond co-inflation is a coordinated failure of fiat money in general, where there is no printing press of last resort.  

That is why having various precious metals (gold, silver, brass, lead) is a requirement.  And also other dual use items?   Dual use: 1) personal utility;   2) appeal to others as barter.  For example, apart from food and fuel, how much will generic viagra pills be worth in a pinch in the neighborhood swapfest?

 

 

Tue, 09/14/2010 - 12:57 | 581010 Strongbad
Strongbad's picture

Gold, silver, platinum, Swiss Franc, and Euro are all kicking butt today against the US dollar!

Tue, 09/14/2010 - 13:12 | 581070 americanspirit
americanspirit's picture

Let's keep in mind the classic relationship between (1) value in use compared with (2) value in exchange. Both are important. Stay balanced.

 

Tue, 09/14/2010 - 14:50 | 581363 Bankster T Cubed
Bankster T Cubed's picture

The central banks are all completely illegitimate cancers on the world economy

they all suck shit

and they do so deliberately

in order to help their master globalist banker douchebags steal the wealth of the world

Tue, 09/14/2010 - 16:01 | 581536 rhyzimmer02
rhyzimmer02's picture

I guess that means deflation is off the table bitchez

Thu, 10/07/2010 - 06:20 | 631675 Herry12
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