This page has been archived and commenting is disabled.

Yen Flash Smash Part Two

Tyler Durden's picture


Just like right after Fukushima the USDJPY waited for the illiquid 5pm session to collapse, here comes part two. Have the FX HFT algos now completely taken over? A 100 pip move is catastrophic for most levered FX desks. It is time someone figured out what is casuing these periodic plunges. Sure enough, someone will gobble this up and hopefully make some money, unless there is actual news that just sent the Yen to near all time record highs.

And another perspective:


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 07/12/2011 - 17:21 | 1449534 HitTheFan
HitTheFan's picture

This is bullish though right?

Tue, 07/12/2011 - 17:25 | 1449551 Dick Darlington
Dick Darlington's picture

Everything is.

Tue, 07/12/2011 - 17:28 | 1449552 TruthInSunshine
TruthInSunshine's picture

This means Fukushima Daiichi has been successfully fixed with some Quikrete and some chicken wire.

Also, the Japanese National Debt was slashed from 214% of GDP to 213.999999999997% of GDP, pending revisions.

They are free to print another quadrillion yen now.


Tue, 07/12/2011 - 18:02 | 1449652 redpill
redpill's picture

Could be a result of revelations that Japanese across the entire country have been eating radioactive beef for months:


Or maybe that radioactive ash is being collected in Tokyo:


Or maybe that the Fukushima "Contaminated Water Filtration System" is on the brink of catastrophic failure which will eventually result in the poisoning of the ocean along the entire Japanese coastline.


OR it could be the revelation that the technology does not exist today to remove the melted fuel from the bottom of these reactors, and that long term entombment and continued poisoning of Japan is inevitable.


Tue, 07/12/2011 - 18:20 | 1449710 Fukushima Sam
Fukushima Sam's picture

We're even getting a little of the action in peaches!

10:05 pm 10-minute INTERIOR average: 39.9 CPM
9:50 pm 10-minute EXTERIOR average: 45.6 CPM NORMAL
4:00 pm INTERIOR spot reading in Santa Monica market with approximate background of 39 CPM – Two peaches sustained 81 CPM and above or over two times background (208% of site background).
3:40 pm 10-minute INTERIOR average: 39.6 CPM
3:25 pm 10-minute EXTERIOR average: 47.0 CPM

Tue, 07/12/2011 - 18:11 | 1449681 SwingForce
SwingForce's picture

Down here in South Florida, at the Condo-minium we use Bubble Gum & Duct Tape, only thing holding this place together! Y'all oughta try it some time, ya' hea?

Tue, 07/12/2011 - 19:19 | 1449835 Charles Wilson
Charles Wilson's picture

I always knew that there had to have been a nuclear accident somewhere in South Florida sometime ago, probably when Schnellenberger took over the Miami Hurricanes Football team.

The above post proves it.



Tue, 07/12/2011 - 20:43 | 1450034 Jack Napier
Jack Napier's picture

HAH!! People who live in vitrified houses shouldn't throw rocks, Jeb!

Tue, 07/12/2011 - 23:06 | 1450388 Charles Wilson
Charles Wilson's picture

Thanx, Jack -

Speaking of Jeb!, we're already getting a preview of the mud slinging to come. When Nancy "Her-eyes-seem-to-follow-you-everywhere" Pelosi was stunned the other day when Obama stated he would accept SocSec cuts ("But..That's our Strategy for the Election..."), I was reminded of (Put your right hand on your heart, get misty eyed and look to Heaven) Lawton Chiles and his race against Jeb! for the Senate a few years back.

A few days before the election, Saint Lawton hired a phone bank to call all the SocSec Seniors and tell them, "Thay's gon slyce yer Soshul Secur'ty!!!"  The tactic (by concensus) worked. After the election, Saint Lawton apologized - sorta' - and did another term in the Senate. Just a little ofal soiled Saint Lawton's pant leg.

Meanwhile, George W., the younger, was running against Anne Richards (I believe) and was supposed to lose. So: Jeb! was supposed to win and springboard to the Presidency and lost, GW won and became the President.

Mission Accomplished!




PS: This election that's coming may be one of the lowest, smarmiest mud slinging elections in history.  There are pigs alive today who would not lie in the filth that's coming.


Tue, 07/12/2011 - 17:26 | 1449556 Tidewater
Tidewater's picture

Yeah, I wonder who let the new guy near the keyboard.

Tue, 07/12/2011 - 19:04 | 1449810 francis_sawyer
francis_sawyer's picture

was it Waddell, or Reed?

Tue, 07/12/2011 - 17:38 | 1449587 Long-John-Silver
Long-John-Silver's picture

This is great for Japanese exports as long as no one checks the products for radiation.

Tue, 07/12/2011 - 17:44 | 1449604 sdmjake
sdmjake's picture


Tue, 07/12/2011 - 18:23 | 1449722 ihedgemyhedges
ihedgemyhedges's picture

Just like your avatar............

Tue, 07/12/2011 - 18:35 | 1449750 fuu
fuu's picture

gravity is a harsh mistress

Tue, 07/12/2011 - 18:41 | 1449766 SWRichmond
SWRichmond's picture

Dude, you said a mouthful...oh, wait...

Tue, 07/12/2011 - 18:10 | 1449680 camoes
camoes's picture

Efficient markets, bitchez

Tue, 07/12/2011 - 17:22 | 1449536 Caviar Emptor
Caviar Emptor's picture

Flash Crash! What a feeling......

Tue, 07/12/2011 - 17:49 | 1449615 NotApplicable
NotApplicable's picture

Damn you for putting that song in my head!

Tue, 07/12/2011 - 17:53 | 1449630 Caviar Emptor
Caviar Emptor's picture


Tue, 07/12/2011 - 17:24 | 1449538 The Count
The Count's picture

HFT is the crystal meth of the markets. Won't stop until the consumer bites the bullet. Don't expect our 'regulators' to end the shenanigans, they are on the take.


Tue, 07/12/2011 - 19:24 | 1449847 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

Jim Carey crystal meth tribute:

Tue, 07/12/2011 - 17:26 | 1449555 steveo
steveo's picture

Check GBP also


This is what I call the "False Flag Break".   A deceptive move of the markets, scaring the longs out of their position before continuing upward.   The PTB HBB crew does everything they can to rack the retail over the coals.   And they collude through direct phone conversation, pit talk, and complicity of quant programs.   Fair? No.  Legal, No?    The way it is?  Yes.


I remain long GBP

Remember this is expiry week, more fireworks tomorrow and usually a slow down of volatility into Thurs Fri


Tue, 07/12/2011 - 17:28 | 1449559 FranSix
FranSix's picture

When the ¥ flash crashes, ppl listen.

Tue, 07/12/2011 - 17:49 | 1449616 TruthInSunshine
Tue, 07/12/2011 - 18:01 | 1449565 Cojones
Cojones's picture

Take Profit hunting. 

Tue, 07/12/2011 - 17:29 | 1449568 fxpert
fxpert's picture

I had a small position before this crash and now gobbled up some more. 

Tue, 07/12/2011 - 17:30 | 1449571 mynhair
mynhair's picture

Carry trade moving again?

Tue, 07/12/2011 - 17:38 | 1449576 oldmanagain
oldmanagain's picture

Not too big on conspiracy theories unless it was Bush/Cheney.  But why aren't we doing more to confront the lack of regulation that occurred under them and Clinton.  So far we are batting about .165.

Tue, 07/12/2011 - 20:50 | 1450049 Jack Napier
Jack Napier's picture

If you want to talk about lack of regulation ask Ted Butler. Political parties may change, but policies do not. If you see someone on TV you can be certain they don't make any decisions. It defeats the purpose of being in control if you are on the hook with the public.

Tue, 07/12/2011 - 17:35 | 1449579 DollarDive
DollarDive's picture

It takes a bald headed bankster to get a dirty job done !

Tue, 07/12/2011 - 22:58 | 1450381 Ned Zeppelin
Ned Zeppelin's picture

Yeah where is that traitorous leech Hank Paulson when you need him? 

Tue, 07/12/2011 - 17:35 | 1449580 a_ext
a_ext's picture

Where's the duct tape?


Tue, 07/12/2011 - 17:40 | 1449590 Long-John-Silver
Long-John-Silver's picture

It's sitting on the shelf with the bailing wire.

Tue, 07/12/2011 - 17:52 | 1449624 TruthInSunshine
TruthInSunshine's picture

And next to that 860 million dollar batch of H1N1 'Avian Flu' Immunizations, that don't work, bought from Gilead Science (Rumsfeld used to be their CEO...huh).

Tue, 07/12/2011 - 19:54 | 1449912 knukles
knukles's picture

And them scanner thingymebobs in the airports that Chertnoff sold.

Tue, 07/12/2011 - 19:59 | 1449916 knukles
knukles's picture

And finding that $3.2 trillion gone "missing" at the Pentagon?  (Lotta corners that coulda disappeared into.)

Tue, 07/12/2011 - 22:48 | 1450358 delacroix
delacroix's picture


Tue, 07/12/2011 - 23:28 | 1450433 TruthInSunshine
TruthInSunshine's picture

What's a trillion or so difference between criminal friends.

Silverstein had...what...8 separate policies of insurance on WTC 1 and 2?

And whatever did happen to the somewhat important CIA, DoD, IRS and other government records 'lost' on that day?

I know...I know...crazy talk.

Tue, 07/12/2011 - 17:57 | 1449637 mynhair
mynhair's picture

Why?  Are you on a plane?

Tue, 07/12/2011 - 18:26 | 1449726 augie
augie's picture

I'm sorry,

was that a conkers bad fur day reference? because if it was, that is the most obscure reference i have ever come across. If i am mistaken, i apologize for my insanity.

Tue, 07/12/2011 - 17:35 | 1449581 Sutton
Sutton's picture

Something wrong, something not quite right.

Tue, 07/12/2011 - 18:05 | 1449659 mick_richfield
mick_richfield's picture

You don't know what it is, but it's there -- like a splinter in your mind.

Tue, 07/12/2011 - 20:00 | 1449933 knukles
knukles's picture

What's the topic?  I forget.

Tue, 07/12/2011 - 21:01 | 1450078 Jack Napier
Jack Napier's picture

Hacking, techno, white rabbits, red pills, batteries, Skynet.

Tue, 07/12/2011 - 21:06 | 1450092 knukles
knukles's picture

Oh wow.

Like, uh       I was   uh    getting lost   there.
Thanks.... .  . .    . .   .  . .. .   .  .      . .  .     .

Tue, 07/12/2011 - 17:42 | 1449596 DollarDive
DollarDive's picture

Banksters need to give sheeple the illusion that markets are really not coming unglued.  They need to show that AUD, NZD - risk based currencies are not crashing.  By killing the USD, it seems that AUD/USD and NZD/USD are moving higher.  We just lose more purchasing power here in the good ole USA.

Tue, 07/12/2011 - 18:29 | 1449713 alexanderstollznow
alexanderstollznow's picture

US$ index is at its highest level since April, and AUD is dead middle of the range for the last 4 months.  what is more, you need to have less purchasing power in the USA - the trade deficit blew out 15% last month, and the economy is rooted.  so a weaker currency is required to foster exports, curb imports, and encourage foreigners with cash to buy your assets.  that is why we have floating currencies, remember? 

Tue, 07/12/2011 - 17:44 | 1449600 alexanderstollznow
alexanderstollznow's picture

god, here we go again...

this is exactly the same circumstances as the 'last' such move:  it has occurred a few minutes after interbank close in NY.  ie when there is minimum liquidity in the fx market.  it doesnt mean anything, and it isnt a problem for anyone unless of course they sell out a long position at the low.  as it was only down there for a few minutes, i daresay that did not happen, and JPY is almost back where it started.  talk it up!

Tue, 07/12/2011 - 17:44 | 1449601 swissinv
swissinv's picture

FX markets are hard to manipulate, how the fuck they always bring it down?

Tue, 07/12/2011 - 18:09 | 1449636 Freebird
Freebird's picture

Could well be due to Yoshihiko Noda coming out this evening and stating a slim chance of any intervention & subsequent 79 option clusters breached.


Tue, 07/12/2011 - 20:03 | 1449943 knukles
knukles's picture

Oh.  You mean that Yoshihiko Noda?
Like doing a stress test on the reactors?

"This is fuckin' big."
          -Joe Biden 

Tue, 07/12/2011 - 17:45 | 1449605 ThirdCoastSurfer
ThirdCoastSurfer's picture

It was stated that the whole reason for the global coordinated fx intervention after the earthquake was that an exchange rate of 85 was required to keep auto exports competitive. It touched that level just after the massive Yen influx, but then has remained in the range of 81 ever since. If auto sales are now slowing, as has recently been reported, then look out below!

Tue, 07/12/2011 - 17:45 | 1449606 Josh Randall
Josh Randall's picture

McSushi Jobs are picking up

Tue, 07/12/2011 - 17:50 | 1449618 Misean
Misean's picture

Yes. It takes rather more highly trained people to tangle with the "new" fish.

Tue, 07/12/2011 - 17:53 | 1449628 TruthInSunshine
TruthInSunshine's picture

What remain of the Blue Fin Tuna are pre-cooked when caught.

Tue, 07/12/2011 - 18:01 | 1449634 Caviar Emptor
Caviar Emptor's picture

Whaddya get when you mix Fukushima Daiichi and the Pacific Ocean?

A: Hot Tuna



Tue, 07/12/2011 - 18:59 | 1449800 fuu
Tue, 07/12/2011 - 20:01 | 1449936 slewie the pi-rat
slewie the pi-rat's picture


Tue, 07/12/2011 - 18:00 | 1449642 honestann
honestann's picture

Gee, I guess the new scheme for obsessive compulsive "day trader types" should be to take positions in anything that has massively light volume at some wacko ultra-light time of the trading day or night or after-hours.

Only problem is, reality (lack of insider information).  Clearly the perverts doing these things know how many buy and sell orders exist at various prices BEFORE they pull their stunts.  Which means, this is done by coordination between the largest few trading desks, or with knowledge of pending fixed-price limit/stop/other orders.

In other words, pure criminality at the very top.

Tue, 07/12/2011 - 17:59 | 1449643 Juice Box
Juice Box's picture

Everyone around me is a total stranger
Everyone avoids me like a cyclone Ranger
That's why I'm turning Japanese
I think I'm turning Japanese
I really think so
Turning Japanese
I think I'm turning Japanese
I really think so
I'm turning Japanese
I think I'm turning Japanese
I really think so
Turning Japanese
I think I'm turning Japanese
I really think so"

Wait!  If I am Japanese now, then I must be radioactive!  

Tue, 07/12/2011 - 18:00 | 1449644 jason4u
jason4u's picture

Interesting..but it does seem as if usdjpy is headed back to the record lows unless there is centtral bank intervention...flash crash or no flash crash...given helicopter Ben will be talking up QE3 or some QE concotion tomorrow into Thursday.

Tue, 07/12/2011 - 18:01 | 1449645 Superslam
Superslam's picture

Last time this happened I thought it was a stop flush leading up to a yen selling intervention, but that didn't happen.

There is no rational reason for this move.

Tue, 07/12/2011 - 18:12 | 1449686 Freebird
Freebird's picture

Yeh but USD / Yen has been irrational for a while.  Took my bat & ball elsewhere.

Tue, 07/12/2011 - 18:05 | 1449657 johny2
johny2's picture

If you choose to swim with the sharks, don't be surprised if they take a bite out of you. And likewise in rigged markets, you are low down the food chain.


Tue, 07/12/2011 - 18:06 | 1449660 mynhair
mynhair's picture

J. Paulson did it.

A resume enhancer for W&R.

Tue, 07/12/2011 - 18:07 | 1449665 Caviar Emptor
Caviar Emptor's picture

These markets are so thin and bidless that if Joe from the trading desk takes a piss the whole Ponzi could crash

Tue, 07/12/2011 - 18:13 | 1449688 Deepskyy
Deepskyy's picture

Maybe HFT algos really don't exist.  Its just a huge warehouse hooked up to massive servers where thousands of underprivileged Taiwanese children feverishly click "buy" on a screen all day long.  Then if something goes wrong, a red light clicks on above them and they all switch to furiously clicking "sell."

Tue, 07/12/2011 - 19:01 | 1449804 fuu
fuu's picture


Tue, 07/12/2011 - 18:12 | 1449685 walküre
walküre's picture

Lost in Translation.

Tue, 07/12/2011 - 18:21 | 1449705 FunkyOldGeezer
FunkyOldGeezer's picture

I think any decent day trader would have already been out of any long position by the time this happened. If you wanna see some real fireworks, take a look at the Italian 40 index today. Over 1800 pips in the first two hours 40 minutes of trading. That's c. 5% down followed by a 5% reversal. What a ride!

Tue, 07/12/2011 - 18:22 | 1449718 Superslam
Superslam's picture

USD/JPY has already recouped all the losses begun with the 5pm shenanigans.

Tue, 07/12/2011 - 18:36 | 1449755 hambone
hambone's picture

78.52 is the new target and Yen will now grind toward it for the rest of the week (w/ or w/out BOJ intervention).  This was scouting to see what lies ahead.

Tue, 07/12/2011 - 18:22 | 1449719 MrBinkeyWhat
MrBinkeyWhat's picture

Some serious computer geek needs to go and slap SkyNet around. Bitchez.

Maybe a little...never mind. ;-)

Tue, 07/12/2011 - 18:25 | 1449727 dabug
dabug's picture

Deglobalization bitchez

Tue, 07/12/2011 - 18:32 | 1449743 bigwavedave
bigwavedave's picture

i just see the us taxpayer averaging down. getting longer at lower prices.

Tue, 07/12/2011 - 23:01 | 1450386 Ned Zeppelin
Ned Zeppelin's picture

Sorry your avatar distracted me - what did you say? 

Tue, 07/12/2011 - 18:37 | 1449758 foxmuldar
foxmuldar's picture

Who needs comedy central when I have Zero Hedge to get my laughs. Yes Juice Box you really are Japanese.

Tue, 07/12/2011 - 19:08 | 1449817 oogs66
oogs66's picture

volatility is increasing across the board.  investors/desks/hedge funds will have to take smaller positions....just like your post earlier today about credit vol, the same thing is happening on fx.  smaller positions will decrease liquidity and the uncertainty can't be good for real business....screw the political stuff they are blaming on business hiring/etc, fx vol is real and scary and is beyond the control of people

Tue, 07/12/2011 - 19:16 | 1449829 Atomizer
Atomizer's picture

This debt ceiling debacle is all about shoring up new monies to bailout the EU via IMF. IMHO.

The IMF has announced that on January 1, 2011 changes in the relative weights of the four currencies in the Special Drawing Rights (SDR) basket will come into effect (Press Release No. 10/434). The initial weights assigned to each currency in the SDR basket have been adjusted to take account of changes in the share of each currency in world exports of goods and services and international reserves.



Tue, 07/12/2011 - 19:40 | 1449885 unum mountaineer
unum mountaineer's picture

IMF Names China's Min Zhu As One Of Its Deputy Managing Directors. How much time does lagarde have?

Tue, 07/12/2011 - 20:18 | 1449973 Atomizer
Atomizer's picture

She will remain until her realization sets in. It won't be long before the process hits a brick wall.

The new Basell III/FSB used car salesman make or break moment will have an epic fail. I personally want this fraud to end, the spider web is getting bigger each day. You understand. If not, just turn on the lights and watch cockroaches take cover. LOL

See, as each ponzi net is set.. It becomes a domino effect when someone wants to pull their monies from the portfolio.

Tue, 07/12/2011 - 19:17 | 1449831 Diablo
Diablo's picture

wonder what chris pia and/or moore cap is up to these days. 


Tue, 07/12/2011 - 19:17 | 1449832 Piranhanoia
Piranhanoia's picture

Isn't someone hacking these to make this happen?  Think someone is breaking in to the code and programming various computers to puke?  Or does every country with enough pull get to rig it when required?

Tue, 07/12/2011 - 19:22 | 1449839 mynhair
Tue, 07/12/2011 - 19:24 | 1449845 Atomizer
Atomizer's picture

Lets see what LaGarde has to say either tomorrow or Thursday.

This is all a choreographed play for the peasants to fear/comply.

Tue, 07/12/2011 - 20:32 | 1450004 FischerBlack
FischerBlack's picture

Back where it started. Thank you BOJ!

Tue, 07/12/2011 - 20:35 | 1450014 jack stephan
jack stephan's picture

General Jack D. Ripper: No, I mean when they tortured you. Did you talk?
Group Capt. Lionel Mandrake: Ah, oh, no... well, I don't think they wanted me to talk really. I don't think they wanted me to say anything. It was just their way of having a bit of fun, the swines. Strange thing is they make such bloody good cameras.

Tue, 07/12/2011 - 21:09 | 1450098 GaS man
GaS man's picture

this is a classic liquidity provider bank move , get to end of the day, when no one notices you clean out all those pesky stop losses for 15 minutes or so and then move the market back to where it was over the next 2 hours. The big LP banks and the big margin FX houses are in constant battle but each needs the other now. The margin FX guys cost the banks so much in scalping that from time to time they are allowed to make their monthly proft in a few minutes. The OTC FX players stay neutral and the clients cop it

Tue, 07/12/2011 - 21:55 | 1450230 dperson
dperson's picture

repatriation bitchez

Tue, 07/12/2011 - 22:09 | 1450263 Johari Ichiban
Johari Ichiban's picture

Yen -- The New Reserve Currency

Tue, 07/12/2011 - 22:43 | 1450348 King
King's picture

Yen and CHF buy-side stops are notorious, further exacerbated by illiquid trading hours and general risk aversion.

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