Reid-Off; Boehner-On; McConnell-Off; Reality-Gone

Tyler Durden's picture

UPDATE: ES -7 after-hours from closing highs (McConnell-Off)

Equity markets started the day off slowly but with confidence disappointing and Harry Reid's name-calling, not even the arrival of the chosen one was enough to juice anything but a minimal bounce in stocks. It looked like S&P 500 futures (ES) were going to retest the flash-crash lows from last week but thanks to a well-timed piece of news that Boehner will be in session on Sunday night (though no accompanying notes on exactly what magical book of crap they will sign off - or not - on) was enough to spur Johhny-5 and his friends into algo-asm action. The initial jerk was perfectly to VWAP and the second jerk took AAPL up to yesterday's closing VWAP. This strength dragged ES higher - reconnecting with a less excited risk-asset market that had remained flat from the day-session open. FX and vol were the main levers to the upside with Treasuries less enamored - though HYG was lifted to fill Monday's gap. Mitch McConnell spoiled the party a little into the unchanged close.

As the markets ramped there were notable blocks and the large delta appeared to be sellers - which accompanied with VIX compression (big roundtrip today) suggests this strength enabled a few more big players to exit their underlying positions and unwind hedges. Gold rose as late-day USD weakness (and Treasury selling) jerked commodities higher. ES auctioned up to pre-Reid levels but was unable to hold those algo gains.


The S&P magically managed to get green for the month by the close...


The day in the S&P 500 futures market... with Scott Brown's on-again off-again facebook post impact... ending the UNCH!


Asset classes in general were all over the place with the US Open to EU Close session seeing a big EUR dump (on Reid's comments) after some more reptraiation strength early on. Gold rallied on that and stayed high all day. Evidently Treasuries (red) were not as excited with the ramp as the US and Oil)...


Equities did actually drop considerably more than risk-assets (upper right) in general today and the last day ramp dragged us back up to a more synchronized view of the world - even if correlations were weak overall. ETFs were relatively better-behaved (upper left) and stayed in close sync up and down - with VXX the major driver - though HYG was abused higher into the close (filling Monday's gap)... Cross-asset class correlation picked up notably into the close (lower right)



VIX round-tripped from low 19s to almost 21% and back down - and while much was made of VIX's compression it remains excessively bid relative to stocks - suggesting hedgers remain. Clearly, managers bid protection over the past week or so - knowing they could not sell down their exposures too aggressively; now we see headline-driven ramps that enable puts to be unwound profitably (higher vol and lower underlying price) and also to sell down exposure into the market's levered excitement (of retail) which then fades after-hours - just as it did after the last time - would not be surprised to see another ES cliff dive tonight.


Apple was heading for a 4 handle slowly but surely but the Boehner Boner enabled an absolute algo-gasm as we tested up to yesterday's closing VWAP...and stalled there


The problem, of course, as we tweeted an hour before the close, is that:




Charts: Bloomberg and Capital Context


(h/t Kosherham for Johhny 5 image)

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RacerX's picture

glad Boehner is still able to get it up.

economics9698's picture

Fuck it, life is good if you have a government pension.

Paula Bono Dockery about an hour ago via mobile; background-size: auto; display: inline-block; height: 12px; width: 12px; bottom: -1px; margin-bottom: -5px; position: relative; vertical-align: top; background-position: -628px -39px; background-repeat: no-repeat no-repeat;"> Heading to Maryland!

Snakeeyes's picture

Pure Kabuki theatre!

Dems want taxes to go and are using under $250k as the class warfare card.

Reps want military spending to be cut as little as possible.

Automatic spending cuts if the fiscal cliff is not solved amounts to 10% of the current Federal deficit. THAT'S IT!

Let's just go over the fiscal cliff. The media will blame Repubs and Obama/Reid will call for blood!

long-shorty's picture


Do you have a 240-minute delay on your Quotron, Tyler?

Michaelwiseguy's picture

Where are the google maps of Non-Gun owner homes, so criminals can target successful home burglary jackpots without fear if being killed by a home owner?

Renewable Life's picture

Be careful who you are calling a criminal.........

Soon, you'll be the criminal, if you don't get your weapons "registered" and your fingerprints taken, and turn in your mags over 10 rounds, etc


knukles's picture

And an RFID chip implanted.

XitSam's picture

I was just thinking, the Lil' Abner character Joe Btfsplk, who always had a dark cloud over his head, would be updated in the modern era with a drone over his head. 

ShrNfr's picture

When it comes to short guns, that is the requirement in MA now. Magazines over 10 rounds for a short gun require a special permit.


Chupacabra-322's picture

@ Renewable Life,

"When plunder becomes a way of life for a group of men,living together in society,they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it."

-Frederic Bastiat, (1801-1850)

The Criminal Officials in Government are passing legislation and creating a survailence infrustructure which protects them from being hunted down and prosecuted from the Crimes Against The American People and Crimes Against Humanity which they have committed.

knukles's picture

Imagine if the Tin Man got a Heart, the Lion got Courage and the  Scarecrow, a Brain.....
And Dorthy, 3 Vicodins and a bottle of cheap wine. 

LFMayor's picture

you know that Judy.... Yellows in the morning, Reds at night!

max2205's picture

One day they will say, shit we should have made Corps pay what they should have. Gawd!

JPM Hater001's picture

When you say Dorthy are you talking about my wife?  I can finish this if you like...

DoChenRollingBearing's picture

Give a Bearing a nice glop of grease (pit in just right), and he is happy for thousands of revolutions!

sunaJ's picture

I like how algos give a shit what these people (Boehner, Reid, et al) say.  I do not pretend to know the future, but my personal macro analysis of our situation puts us in a vortex outside the control of Boehner, Geithner, Obama or Reid.  Sure, they occupy positions to do something about it, but it is clear they are either corrupt, scared shitless, powerless or oblivious (probably a mixture).  They are in the positions we have put them in to be able to do incredible things to confront the problem, but instead you have contests of Universe's Best Democrat, Republican of the Year and Most Profitable Shuckster to Special Interest.  Meanwhile the gravitational vortex of power - whether financial or political (it is the same center of power) continues to plunder anything they wish and will continue until it is all gone - one hand owes a ton of money, the other hand owns a printing press.  They are the rule makers and seem just fine with industry writing the rules, thank you very much. 

I don't like to get biblical, but JFC.

MachoMan's picture

Algos don't give a shit about anything but executing commands (HAL).  The idiots that coded them give a shit or, alternatively, expect other people (algos) to give a shit about what the talking heads say...  self fulfilling prophecy.

stocktivity's picture

My personal analysis ...It's all Bullshit!!!!

eatthebanksters's picture

Who is applying the most pressure to Barry and Harry right now? The unions or Jamie, Lloyd and the Wall Street'll know based on the type of last minute deal that gets done.

ball-and-chain's picture

It'd be kind of cool if we went off the cliff.

What would that look like?

Would Obama give me more food stamps?



Glass Seagull's picture



Single, white equity index seeks volume-weighted average price.  Pet friendly.

GMadScientist's picture

Does "pet friendly" cover putting snakes in your ass? Get back to me; I gotta shoot while the light is still good.


Renewable Life's picture

Who do these monkeys think they are fooling at this point????

This shit is more scripted then SNL, and worse then a B-Movie film festival!

Timmy G comes out and says Debt Ceiling is Dec 31, cue Obammy in Hawaii for a late night fly over, Boner says no deal, Reid says no deal. MCconnell says "maybe a deal", Boner schedules the late night Sunday session, and Reid says maybe, Obammy at 11:45 Saturday night will unveil "his plan" to save the world..............

Its in your court GOP stooges!

Cdad's picture

It takes exactly 16 minutes post close for every BlowHorn [CNBC] talking head to change tune from "fixed" to "oh shit."  

What a joke the U.S. equity market is.  Would someone please just turn off the BlowHorn satellite, please?  Thank you.

CrashisOptimistic's picture

HFT moves the market the direction the headline reading algorithms say to move it.  It doesn't matter what CNBC says.  If you were writing those algos, would YOU let it read anything on the CNBC website/wire?

Just sell out, get out of the market and buy farmland.  There's nothing else.

MachoMan's picture

There's not much else for people with very spectacular means...  for most plebs, farm land is already cost prohibitive...  as is gold.  The noose is tightening.

Yen Cross's picture

 Reid And McConnell are a couple bi-polar kindergarteners, and Boehner is Dr. Strangelove.

Everybodys All American's picture

I'd punch ____ in the mouth if I ever saw that bastard.

GMadScientist's picture

State-sanctioned (if not mandated) bear trap: SHUT!

nmewn's picture

Sooo, ummm, how much is the federal government on the hook for flying O'Barry back & forth to Hawaii...again?

GMadScientist's picture

Skype from a bunker would be much cheaper and wouldn't freak out the natives at all.


nmewn's picture

Less of a carbon footprint too (for all the Mayan/Gaia/Prius drivers out there)

The figure I saw was a twenty six million dollar vacation, by the way ;-)

knukles's picture

But you get to walk, peasant.
For you are responsible for saving the planet.

All by your lonesome.


And here's an old hockey stick you can use as a crutch.

nmewn's picture

Fuck it...I'm gonna hijack sumpin ;-)

GMadScientist's picture

I've never flown Gangnam-class, but I hear it's nice.


knukles's picture

Priceless Visual of Obey, VallieieeJ-Rat, rappin' on out.....

No wonder Mooch stayed behind

(Stayed behind.  Get it, behind?  Hah ha ha ha ha ah)

edit: (was a big decision on her part)

stocktivity's picture

"Sooo, ummm, how much is the federal government on the hook for flying O'Barry back & forth to Hawaii...again?"

Don't forget Michelle and the kids....and the secret service...and Michelle's hairdresser...kid's tutors...ect ect.    No problem...we American's are such a giving society.

ShrNfr's picture

Hey, the gotta still use a cargo plane to get Mochelle and her shopping back into town. That costs real money.

Cursive's picture

Incredible.  There are other words, but that's what I've got for now.  Who would want their wealth tied to this not-so-funny farce?

ceilidh_trail's picture

Your comment is exactly what has made the last few years such a pain in the ass. How can anybody make a competent decision when we have these clowns running around?

falak pema's picture

No, no the bounce is back; this is roller coaster time! Remember! 

edb5s's picture

This market has no shame. 

Freddie's picture

What did Mitch McConnel say at the close?   We are in circus land.   I guess when the USSR imploded it was kind of like this.

Shizzmoney's picture

Well, it kind of was.....except like in the USSR, the government's checks to the military haven't bounced.


Everybodys All American's picture

McConnell said any spending bill must originate in the House and not the Senate by constitutional law. Reid complained like a little bitch that the House hasn't sent him a bill he can pass. Same old same.

nmewn's picture

And he was exactly right...all spending bills start in the House.

Reid's been opening his breast pocket and flashng (like a pervert) some sense of the senate document...a glorified's value in law and in the discussion at hand listed as absolute zero.

Reid obviously wants to go over the "cliff" or he's an idiot...take your pick.

Freddie's picture

Thanks for the info "Everybodys" and "nmewn."  Reid is the biggest POS that ever walked the earth.   he was involved in a accident in Nevada a few weeks ago on the Interstate in his black SUV followed by security SUV.   It is sickening how this vermin has endless atff, security, perks we can only dream off.

The Roman senate destroyed Rome and these vermin are doing the same thing.

nmewn's picture

"The Roman senate destroyed Rome and these vermin are doing the same thing."

I have noted this before and it bears repeating...I believe.

What we have here now is, an ex-senator as president (Obama), an ex-senator as vice-president (Biden), an ex-senator as secretary of state (Clinton, with another waiting in the wings to replace her, Kerry).

Basically, the three top positions of the executive branch having shared allegiance with a legislative branch...the senate.

Freddie's picture


I can tell you another thing - most Senate seats were rigged in 2012 plus TOTUS to make sure the Dems held the Senate.  Late night voting, overvoting, early voting, rigged machines, etc etc in FL, OH, WI, MI, PA and others.  I doubt WA, CA, and OR have had an honest election in the past 20 years.   WA governor's race stolen multiple times from Dino Rossi and others in Seattle.   These people are ******g criminals.

The Roman Senate sent the military out of Rome because they did not want them there.  Ditto the USA.   The Senate is one of the biggest sources of evil in this country by far.