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Did Someone Intentionally Try To Crash The Crude Contract?

Tyler Durden's picture





 

We have noted the incessant slamdown in the precious metals markets, and highlighted that the only thing that can slow the flood of liquidity into each and every market is a rise in energy prices. The former represents 'trust' in the system; the latter represents 'real economics' as it squeezes the global economy forcing the central banks to pull back or tighten (see China's lack of rev repo recently). To wit, we just noted the plunge in WTI this morning; but Nanex, given their depth of data, noticed something considerably more concerning... "Because the circuit breaker tripped after the market had somewhat stabilized, we think another large sale appeared that would have decimated prices - which CME's circuit breaker logic picked up on, causing the halt." Did someone intentionally try to crash the WTI Crude contract? And if so, who? We don't know, but the usual suspect (singular) does emerge, considering that with gas prices hitting new February daily record every day, and every dollar in increase in WTI means even less (seasonally adjusted) GDP, and less consumer purchasing power, those evil speculators who are taking the Fed's free money to buy commodities (and very unpatriotically not the S&P or Russell 2000) must be promptly punished.

Via Nanex,

On February 20, 2013 at 11:01:36, the April 2013 crude oil futures contract was hit with over 2500 contracts within 2 seconds sending prices sharply lower. Oddly enough, 12 seconds later, all CME oil futures contracts halted for 10 seconds. Because the circuit breaker tripped after the market had somewhat stabilized, we think another large sale appeared that would have decimated prices - which CME's circuit breaker logic picked up on, causing the halt. This large ghost sale must have been canceled before the 10 second halt ended. Another explanation is a software bug in CME's circuit breaker code, which we doubt because they have had great success with their circuit breaker logic.

 

 


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Wed, 02/20/2013 - 13:37 | Link to Comment Flakmeister
Flakmeister's picture

Do you think?

Wed, 02/20/2013 - 13:40 | Link to Comment Xibalba
Xibalba's picture

Why would THE PRESIDENTS WORKING GROUP ON MARKETS try to crash commods?  

 

 

 

oh right, to defend that funny money called USD's

Wed, 02/20/2013 - 13:44 | Link to Comment THX 1178
THX 1178's picture

Silver, gold and oil slammed. It is a coordinated effort to keep the USD ponzi scheme running just a little longer. Desperation.

Wed, 02/20/2013 - 13:50 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Per the comment above, for anyone who still listens to the talking heads on cnbc when they laugh off the "Plunge Protection Team"....

Executive Order 12631--Working Group on Financial Markets:

http://www.archives.gov/federal-register/codification/executive-order/12631.html

Wed, 02/20/2013 - 13:53 | Link to Comment fourchan
fourchan's picture

an interview with some of our fellow citizens in charge of the ppteam

http://www.youtube.com/watch?feature=player_embedded&v=Jr7McLhZmyE

Wed, 02/20/2013 - 14:21 | Link to Comment SamAdams
SamAdams's picture

This is obviously the work of the PCT, Plunge Creation Team.  Much like the PPT, they seem to have the ability to create zeroes and ones at will. 

Wed, 02/20/2013 - 14:28 | Link to Comment strannick
strannick's picture

Now you know how us Silverbugs feel... Dont worry. The CFTC is on it. Bart Chilton has on his Inspector Clouseau hat, investigatory magnifying glass in hand, looking for manipulation elephants in garbage cans, fluffing his boofon hairdo for interviews with Lauren Lister.

Wed, 02/20/2013 - 14:31 | Link to Comment Stackers
Stackers's picture

Sorry, that was me. I was in the daytrader chat room and joked around everyone should sell WTI at exactly 11:01

Wed, 02/20/2013 - 15:14 | Link to Comment DeadFred
DeadFred's picture

What you can take from this is that Goldman and JPM are both long WTI. Otherwise the breaker would have let the trades through the way they do with the PM trades.

Wed, 02/20/2013 - 14:07 | Link to Comment Xibalba
Xibalba's picture

They laugh it off because they are paid to 'keep the dream alive' 

Wed, 02/20/2013 - 14:47 | Link to Comment CPL
CPL's picture

Until the last refinery is closed and nobody gets to drive or turn on the lights.

Again, oil should be 340 bucks a barrel, no if's, and's or but's.  Can't hold an asset price down in a market where the other 99.9999% of all products have increased 500% over four years.

Cheap is good, only if it's reasonable to the situation and outcome.

Wed, 02/20/2013 - 15:09 | Link to Comment Totentänzerlied
Totentänzerlied's picture

$340 seems a wee bit cheap.

Wed, 02/20/2013 - 15:25 | Link to Comment steve from virginia
steve from virginia's picture

 

 

Priced as a human labor equivalent a gallon of gasoline should cost $1,500.

 

Imagine the kind of economy we would have if gas was too valuable to waste? What if gasoline was like ...

 

... gold?

Wed, 02/20/2013 - 18:00 | Link to Comment Kitler
Kitler's picture

http://www.firstenercastfinancial.com/forums/showthread.php?t=432

Three weeks of human powered effort per gallon of gas. Try to get someone to push around your Hummer for three weeks for 4 bucks.

It's a bargain.

Wed, 02/20/2013 - 14:10 | Link to Comment darteaus
darteaus's picture

Or, it could be a cash-out, no?

Wed, 02/20/2013 - 14:31 | Link to Comment THX 1178
THX 1178's picture

Slam the price and then buy as much as they can? If so, systemic failure will come MUCH faster.

Wed, 02/20/2013 - 15:53 | Link to Comment darteaus
darteaus's picture

I really don't know, but the Walmart, Catepillar & Foxconn data suggest widespread near term slowdown.

Maybe they can't hold the flood waters back any longer, or they've decided they can make money leaning in the other direction.

Wed, 02/20/2013 - 13:45 | Link to Comment Againstthelie
Againstthelie's picture

Hm, as a gold and silver futures trader i can only laugh. This is almost daily occurence in our "market".

Is now oil becoming a centerpiece of the inflation expectation management, too?

Wed, 02/20/2013 - 13:49 | Link to Comment Divided States ...
Divided States of America's picture

They just testing it on oil futures before it goes live on the ES futures....i think the experiment was very successful today.

Wed, 02/20/2013 - 13:49 | Link to Comment VonManstein
VonManstein's picture

So for the to gain 0.30% we need down 3% 1.5% 2.2% 1% and Equites ~0.5% >> KING DOLLAR LOL

 

Wed, 02/20/2013 - 13:50 | Link to Comment kill switch
kill switch's picture

I think we are finally witnessing the fuck storm..This ride down is going to be epic,,bring in the drones..take the guns...man this is fun shit!!

 

 

The kill switch

Wed, 02/20/2013 - 13:59 | Link to Comment tecno242
tecno242's picture

could be...

any change to the status quo these days could cause ugly chain reactions

Wed, 02/20/2013 - 15:08 | Link to Comment ZeroAvatar
ZeroAvatar's picture

There, for a week or two, it seemed as though all the plates were spinning together, smoothly, and that they could stay that way.

 

Suddenly, now, though, the gyroscopic movement is beginning to wobble, the plates are starting to fall......

Wed, 02/20/2013 - 14:16 | Link to Comment Stoploss
Stoploss's picture

Johnny? Is that you??

Wed, 02/20/2013 - 13:37 | Link to Comment JustObserving
JustObserving's picture

Yes

Wed, 02/20/2013 - 13:59 | Link to Comment max2205
max2205's picture

High gas kills snap.  Cash is wack. Ben wants everything cept oil to scresm higher. 

Helping bonds reverse as well

Wed, 02/20/2013 - 13:38 | Link to Comment Flakmeister
Flakmeister's picture

How many of those contracts sold were naked?

Wed, 02/20/2013 - 13:44 | Link to Comment Gypsyducks
Gypsyducks's picture

All of them

Wed, 02/20/2013 - 14:03 | Link to Comment Flakmeister
Flakmeister's picture

Thanks, but it was a rhetorical question....

Wed, 02/20/2013 - 14:13 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Here's your rhetorical answer:

http://i3.kym-cdn.com/entries/icons/original/000/003/105/fat_man.jpg

PPT at work in the USTREAS.

Wed, 02/20/2013 - 14:45 | Link to Comment Flakmeister
Flakmeister's picture

I wonder which of the ZH regulars that is?

Wed, 02/20/2013 - 14:51 | Link to Comment Hulk
Hulk's picture

I think its knukles, LOL !!!

It could also be "son of Burl Ives"

Wed, 02/20/2013 - 19:19 | Link to Comment CPL
CPL's picture

That guy has a rock solid ab.  He must be juicing because he's got hair growing out his ears.

Wed, 02/20/2013 - 13:38 | Link to Comment Cdad
Cdad's picture

Nice "market."  

Wed, 02/20/2013 - 13:41 | Link to Comment otto skorzeny
otto skorzeny's picture

"circuit breaker"-can't have anything drop too much-although a 10%+ spike up in NFLX is A-OK.

Wed, 02/20/2013 - 13:38 | Link to Comment Fidel Sarcastro
Fidel Sarcastro's picture

This video is responsible  http://www.youtube.com/watch?v=-sBexna-D_c

Wed, 02/20/2013 - 13:38 | Link to Comment slaughterer
slaughterer's picture

Blythe decided to temporarily switch over to WTI for a giggle. 

Wed, 02/20/2013 - 13:39 | Link to Comment localsavage
localsavage's picture

Sorry guys I only filled the SUV half full today.  I guess they caught it.  I won't let it happen again.

Wed, 02/20/2013 - 13:42 | Link to Comment otto skorzeny
otto skorzeny's picture

see alot of people at the station only putting in $20 at a time to get them a few more days til the economy takes off

Wed, 02/20/2013 - 13:50 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

I do notice that thise around me at the gas pump tend to look in awe as I fill up my entire tank and then rip out three 5 gallon gas cans and fill them up too.  In the future I am going to start driving a crappy car, wear crappier clothes, so as not to mark myself a target for the $20 filler-uppers.

Wed, 02/20/2013 - 13:57 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

The drone drivers still know where you live.

Wed, 02/20/2013 - 15:21 | Link to Comment Raymond Reason
Raymond Reason's picture

Exactly, Dr. Dick.  The funny thing i've noticed is the number of young chicks checking me out, in my dented '98 corolla. 

Wed, 02/20/2013 - 17:59 | Link to Comment Papasmurf
Papasmurf's picture

Chicks are beginning to know that debt-free is the new hot guy.

Wed, 02/20/2013 - 13:40 | Link to Comment swissaustrian
swissaustrian's picture

I guess there are no circuit brakers in precious metals...

Wed, 02/20/2013 - 13:46 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

LOL.  No, that would be against... 'tradition'.  ;-)

Wed, 02/20/2013 - 13:52 | Link to Comment EscapeKey
EscapeKey's picture

They'll be put in place once gold makes a large move... upwards.

Wed, 02/20/2013 - 15:48 | Link to Comment ziggy59
ziggy59's picture

There is...2% rule only applies when pms climb...

Wed, 02/20/2013 - 13:40 | Link to Comment q99x2
q99x2's picture

Put a copper penny in the circuit breaker (if you can find one.)

Wed, 02/20/2013 - 18:01 | Link to Comment Papasmurf
Papasmurf's picture

Use a 90% silver quarter.  My dad always warned me that putting a penny in the fuse box could lead to corrosion and fire.

Wed, 02/20/2013 - 13:41 | Link to Comment DavidC
DavidC's picture

All I can see is complete and utter desperation in trying to keep the stock market up (more so after Greenspan's comments the other day). Dow back up to more or less where it was on today's figures - go figure...

DavidC

Wed, 02/20/2013 - 13:42 | Link to Comment Jason T
Jason T's picture

FEd to be hawkish today...don't think they like those rates rising....  

Wed, 02/20/2013 - 13:43 | Link to Comment TruthInSunshine
TruthInSunshine's picture

ObaMao rang Gensler and said "f*ckin' Bernanke's 'Virtuous Circle' monetary policies are making gas prices problematic for me again, beeeyotch!"

Wed, 02/20/2013 - 13:44 | Link to Comment akarc
akarc's picture

China. I watched the cartoon.

Wed, 02/20/2013 - 13:57 | Link to Comment Cult_of_Reason
Cult_of_Reason's picture

NY Fed was ordered to walk crude down (tries to resuscitate the consumer).

Wed, 02/20/2013 - 13:46 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

That's just crazy talk Tyler. Everyone knows there's no such thing as a conspiracy nor is there manipulation in our 'free' markets.

/sarc

Wed, 02/20/2013 - 13:47 | Link to Comment Orly
Orly's picture

According to "Bear," a poster over at FXBriefs.com, there is a major commodity hedge fund that is crashing and burning.

Tyler should check it out...

:D

Wed, 02/20/2013 - 13:54 | Link to Comment EscapeKey
EscapeKey's picture

link, pls

 

Wed, 02/20/2013 - 13:57 | Link to Comment Orly
Orly's picture

I tried to find it but it appears the post has been removed from FXBriefs.com.  (That's not cool, by the way...)

My apologies for what may be inaccurate information (or may turn out to be accurate only in retrospect...).

Sorry about that.

-_-

Wed, 02/20/2013 - 14:11 | Link to Comment seek
seek's picture

It hasn't been removed: http://www.fxbriefs.com/?p=2377#comment-1508

But it does look like it could be a recycle of the RanSquawk rumor. This is apparently who "Bear" is according to the link on FXbriefs: http://www.orbglobalinvestments.com/richardlowe/

So it seems like he could be in a position to know.

 

Wed, 02/20/2013 - 17:59 | Link to Comment Teamtc321
Wed, 02/20/2013 - 13:59 | Link to Comment Downtoolong
Downtoolong's picture

One squeeze is all it takes these days. At least it's not to the upside this time, or we would be looking at $150 crude and $5 Gas.

Wed, 02/20/2013 - 14:05 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

And the biggest moves up all always are preceded by the biggest moves down.

Chart that, bitchez.

Wed, 02/20/2013 - 14:11 | Link to Comment EscapeKey
EscapeKey's picture

unpossible! according to the VIX - which is in no way manipulated - large sudden moves simply don't happen.

Wed, 02/20/2013 - 13:48 | Link to Comment Mrmojorisin515
Mrmojorisin515's picture

These markets are so irrational the only thing you can do is laugh.  Its like a dog chasing a car, no reason the dollar drops from 80.5 down to 78 and then back up to 80.6 in a few weeks, the trends don't exist except that everybody knows shit is fucked.  The past few months, since QEwhatever was announced has seen the metals crushed, the market up, the 10 year allowed to lose a bit of value to show some semblance of a real market, and oil staying in a tight range right under 100 bucks.  All utter bullshit, but come on people, we've been reading this site for years and no its all utter bullshit, until its not ;)

Wed, 02/20/2013 - 13:53 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Takeaway?  In a broken market where everything is manipulated (like former East German company statements), and price discovery becomes a Wheel Of Fortune, only the Big Players dare speculate for a quick buck.  Everyone else:  Head for the fiscal shelter, i.e. stay liquid, maintain personal cash-flow, minimize expenses to bare essentials, and mitigate risk.  'Invest'/Speculate/Gamble at your own risk.

Wed, 02/20/2013 - 13:51 | Link to Comment Herdee
Herdee's picture

Just watch DXH13 - U.S. Dollar Index (ICEFI),if she takes out 80.90 today and breaks through resistance at that level,your going to see commodities take another hit.Ya,there's a giant glut of crude on the market with Canada,Libya,Russia(now the worlds biggest producer) and especially IRAQ pumping to beat hell,all at a time when the U.S. has now become self-sufficient.I'll see $50 dollar oil in the next two years or less.The world economy is in a tailspin and going knowhere but down.

Wed, 02/20/2013 - 13:52 | Link to Comment ekm
ekm's picture

Absolutely correct

Wed, 02/20/2013 - 14:04 | Link to Comment nope-1004
nope-1004's picture

If it takes out 80.90, it will be promptly brought back into "line".  A rising dollar is not what the govvy wants.

 

Wed, 02/20/2013 - 14:42 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Only the insider flies on the wall know, but think about potential coordinated "saving" of countries like Japan, who have a debt-to-GDP trajectory that brings them closer to collapse than other G7 or G20 nations (also, UK).

It's like another Plaza Accord, or Bretton Woods, or Nixon-shock, just in a different form and for different reasons this time.

"Oh, okay, we'll allow it..." goes the meeting, but you'd never know it by reading the official joint communique.

Just a thought.

Wed, 02/20/2013 - 14:14 | Link to Comment Dr. Engali
Dr. Engali's picture

Good luck with shale oil at that price. If oil drops belw $80 shale oil is dead.

Wed, 02/20/2013 - 14:48 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The oil is getting more and more expensive to produce.  This will mean the price will stay high, or cut into GDP.  Maybe oil comes down but equity would crah.  If that happens you think moves will be into fiat?  Lol.  Whatever.  We will see who is right soon enough.

Wed, 02/20/2013 - 17:19 | Link to Comment Ident 7777 economy
Ident 7777 economy's picture

No.

 

You're looking at 'synthetic' valuations and NOT real costs ...

Wed, 02/20/2013 - 18:06 | Link to Comment Teamtc321
Teamtc321's picture

Tell that to the service provider's in the sector with blown out input cost since 08'. Margin compression has been utterly fucking horrific within the sector.

Wed, 02/20/2013 - 18:10 | Link to Comment Ident 7777 economy
Ident 7777 economy's picture

1) Sounds like the differentiiating factor is relative COST of one producer vs another. 

2) Explain how service providers fit into the ovrall picture; sounds as if he/they did not have costs under control, since *someone* is still producing, refining, selling product and making record profits ...

 

Wed, 02/20/2013 - 13:52 | Link to Comment ekm
ekm's picture

It is simply one of the warnings from the gov that crude oil will be crushed to as low as $15 temporarily.......VERY VERY SOON.

Wed, 02/20/2013 - 13:55 | Link to Comment EscapeKey
EscapeKey's picture

yeah good luck getting any supply from athabasca - or any other region where oil doesn't flow freely out of the ground - at that price.

Wed, 02/20/2013 - 14:01 | Link to Comment ekm
ekm's picture

 I said.....TEMPORARILY

Wed, 02/20/2013 - 14:50 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

And the DXY goes to 150.  Lol, sure, because the dollar is backed by winged unicorns and talking teacups.

Wed, 02/20/2013 - 13:58 | Link to Comment fonzannoon
fonzannoon's picture

Does Saudi Arabia own any tresuries? Because $15 is war on them and they will dump them.

Wed, 02/20/2013 - 14:00 | Link to Comment ekm
ekm's picture

They have already pre-sold their quota at $110 brent.

They want a crash.

Wed, 02/20/2013 - 14:03 | Link to Comment fonzannoon
fonzannoon's picture

why do they want a crash? Are they not making profits at higher prices?

Wed, 02/20/2013 - 14:11 | Link to Comment ekm
ekm's picture

Not at all.

Profit is made when the product is sold.

At brent $120 they'd be stuck. Nobody can afford it as far as real economy is concerned.

Wed, 02/20/2013 - 14:12 | Link to Comment fonzannoon
fonzannoon's picture

I see above you said Temporarily.....what happens after temporarily?

Wed, 02/20/2013 - 14:18 | Link to Comment ekm
ekm's picture

Same cycle.

It goes back up to 120 after opec does REAL CUTS.

 

Opec is infamous for never cutting, regardless of how much the media says they are. Who's gonna cut? Venezuela?

Wed, 02/20/2013 - 14:46 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

ekm, you are the king of all rumors.  I'd like you to post some data for a change to go with your hairbrained theorys.

Wed, 02/20/2013 - 14:49 | Link to Comment ekm
ekm's picture

If one follows data from the media, that one is screwed (in general, do not take this personally)

Wed, 02/20/2013 - 14:59 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I couldn't agree more, which is why when I hear about all the "oil coming out of the ears" of Russia, and America, and the ME, I like to remember that oil is a finite good and the House of Saud lies about their reserves.  I like to remember that the energy returned on the energy invested is all that matters.  So goodbye tar sands!  Good bye fracking!  Light sweet crude is still the only King, and, if you haven't noticed, it is getting so hard to produce that there are wars that are being fought over it by the US MIC under cover of the Blue, Democratic, and Liberal Obama WH.

Wed, 02/20/2013 - 17:42 | Link to Comment Ident 7777 economy
Ident 7777 economy's picture

Define: "A finite good"

 

Time period, in your lifetime? No ...

Wed, 02/20/2013 - 17:50 | Link to Comment MSimon
MSimon's picture

EROEI is nonsense. If it costs nothing (or next to nothing) for the energy used it doesn't count.

Wed, 02/20/2013 - 15:23 | Link to Comment DeadFred
DeadFred's picture

The Saudis would love a temporary drop to $15. They are best able to weather some weeks at that price while all their competition goes belly up.

Wed, 02/20/2013 - 18:26 | Link to Comment ekm
ekm's picture

bingo

Particularly if the competition is called IRAN.

Wed, 02/20/2013 - 13:52 | Link to Comment hannah
hannah's picture

first thing i thought when i saw wti down...the gov tried to push prices down. pres hussein cant have $140barrel oil this summer.

Wed, 02/20/2013 - 14:43 | Link to Comment SDShack
SDShack's picture

Yep, the economy couldn't support $140 oil in 2008 with 5% unemployment. It sure as hell can't support it now with 8% unemployment (actually 11%). But with all the govt debt and every country racing to devalue their currency, the commodity inflation spike is guaranteed. Something has to give.

Wed, 02/20/2013 - 15:20 | Link to Comment The Heart
The Heart's picture

"But with all the govt debt and every country racing to devalue their currency, the commodity inflation spike is guaranteed"

Jim Rickards: Currency War 3 Has Just Begun.:

http://www.financialsense.com/node/10533

Wed, 02/20/2013 - 16:41 | Link to Comment TruthInSunshine
TruthInSunshine's picture

I'm fairly confident that rate of unemployment using a more honest measurement is at minimum (but still probably quite "under-capturing/reporting" measurement-- like U3 in the 1980s) is 14%.

I genuinely wouldn't be surprised if it's nipping at the heels of 20% in factual (not household survey OR payroll fiction) based reality.

 

Wed, 02/20/2013 - 15:12 | Link to Comment Not Too Important
Not Too Important's picture

$140 bbl?

What makes you think he cares? The election's over. Let the raping begin.

Wed, 02/20/2013 - 13:57 | Link to Comment tecno242
tecno242's picture

I'd just like to repeat that a long term gold chart looks like gold could crash to 1100 in a hurry if 1500 is taken out.

i'm curious though why the change in sentiment and potentially ugly charts w/ QE4EVA still going on

Wed, 02/20/2013 - 14:00 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Do you only chart gold, or do you also study the fundamentals of the finance system.  Because with talk like "Gold to 1100" I believe fundamentally you have no idea what you are talking about.

Gold is used as a reserve on the balance sheet of all banks, Central and Commercial.  With stocks elevated that means the books are balanced, as equity is an asset to prop up massive liabilities, but as Tyler has been pointing out, equity is over bought here.

So unless equity keeps rising, and good luck with that, something on the left side of the books will need to equal the liabilities.  Gold will be the rock in the books that does that, and that is why Central Banks have been loading up for the last few years.

Wed, 02/20/2013 - 14:03 | Link to Comment Confundido
Confundido's picture

Lennon....read yourself....you are simply expressing wishful thinking. Simple tautologies...Accept the fact that from time to time, if not always, the evil forces win.

Disclaimer: I am long gold up to my eye balls.

 

 

Wed, 02/20/2013 - 14:09 | Link to Comment tecno242
tecno242's picture

haha.. and i'm the one that doesn't know what i'm talking about.

all commodity charts currently have the potential for some sort of deflationary event occuring.. although i'm not sure why.

if a deflationary event occurs... stocks and commodities will get hammered.  Your balanced book theory wouldn't mean jack..

for a very recent example.. the 2007 crash had the potential to be very deflationary.. as a result the stock market crashed and gold went from 1100 to 700.. right to the point where the FED took extraordinary measures printing massive amounts of money and switched gears from deflationary to inflationary.

I can't tell you why quite yet... but commodity charts are indicating the potential for a deflationary event of some magnitude.

I can tell you this much... if gold breaks 1500... Tyler is selling it.

Wed, 02/20/2013 - 14:10 | Link to Comment fonzannoon
fonzannoon's picture

Then gold is just preceeding the huge crash coming in stocks. There is no way stocks get out of this unscathed. That brings the fed in to do massive additional QE and round and round we go.

Wed, 02/20/2013 - 14:13 | Link to Comment tecno242
tecno242's picture

you are assuming that the market never changes it's opinion of the effectiveness of QE

if a big QE announcement ever fails to create the expected reaction.. from that point the FED is neutered and loses

Wed, 02/20/2013 - 14:17 | Link to Comment fonzannoon
fonzannoon's picture

I personally think the fed does not want to risk getting neutered. They will not announce additional QE under any circumstances. It will be back door bailout after back door bailout from here until the day it's all over.

Wed, 02/20/2013 - 14:22 | Link to Comment tecno242
tecno242's picture

they can back door bailout all they want..

if they lose control of rates and market reaction.. they can do nothing but watch

there would be a massive hoarding of cash as all assets fall, including bond prices, all at the same time.  Velocity of money will plummet therefor it wouldn't matter how much you intend to print.

 

Wed, 02/20/2013 - 14:57 | Link to Comment SDShack
SDShack's picture

Never underestimate the ability of the Fed and Govt to do ANYTHING to protect themselves. Unlimited QE is the mildest remedy they will use. If the SHTF like so many say, and the barbarians are truly marching on Washington, then it will be Greece*Infinity, except the protesters will all be armed. That is why the Fed and Govt will stop at nothing to protect themselves. Drones will be the least of our worries. They will suspend all basic rights of assembly, search and seizure. Private ownership of gold will be outlawed. Gun right will be severely restricted or eliminated. Basically,  the govt will stop at nothing to protect itself and will sacrafice every citizen to do so. Sadly, many citizens will be sheep to the slaughter. 

Wed, 02/20/2013 - 15:37 | Link to Comment The Heart
The Heart's picture

"Sadly, many citizens will be sheep to the slaughter."

This is a strange kind of a calm before a storm?

Purim comes on the 24-25 and it just seems weird that there are these kinds of distractions happening to take the attention away from what may be happening RIGHT NOW in the ME. Who is preparing to do what?

http://www.zengardner.com/purim-why-war-on-persia-iran-could-start-march...

It seems that the babylonians are losing control, and more and more people are seeing the wicked money god beast for what it is. The one eyed, one legged retarded inbred chicken with a switch blade and it's finger on the button is trapped in the corner with a dozen 12 gauges aimed at it's pointed head. What will it do? That evil chicken that hates all of you is so tricky, and desperate. Dangerous waters we are approaching we are. Soon, it could come. Another False Flag Event to retake the control using evil Hegelian methodologies to attain the death and total lock down of the nation of the free and brave.

 

 

Wed, 02/20/2013 - 18:26 | Link to Comment Bandit und Buster
Bandit und Buster's picture

 

Synagogue Rising   .... www.synagoguerising.com

Wed, 02/20/2013 - 23:55 | Link to Comment The Heart
The Heart's picture

Correction:

Purim is on 23-24.

Because it is on a Saturday, the celebration is then held on the Thursday before. That would be the 21st, tomorrow!

So, 21, 23, 24, or when? The Monday after? Will Isreal strike Iran soon?

Is this why the fear factor and sell off is happening?

Tick...tock...

Wed, 02/20/2013 - 14:44 | Link to Comment akarc
akarc's picture

"and that is why Central Banks have been loading up for the last few years."

Then they are getting or missing a hell of an oppourtunity.  1550 would be a bit scary. Seems to me a perfect oppourtunity for some country to rush in and be the one to own the most.  

Golds been acting wacko of late. The Fed trying to push the markets and the house doing their best to save the 2% that create all the jobs and where the fuck is the inflation???

I'm having a fuckin panic attack. What would I do w/ my gold? Buy butter? Who the fuck is gonna have any butter?

And ammo is getting scarce.

As a friend of mine said a while back.  Wait until the crowds in the big cities start heading for the country side!


Wed, 02/20/2013 - 15:01 | Link to Comment tecno242
tecno242's picture

what u would do is relocate to a country with a stable localized economy (if one existed) and trade your gold there for the local currency

Wed, 02/20/2013 - 16:25 | Link to Comment The Heart
The Heart's picture

"what u would do is relocate to a country with a stable localized economy (if one existed) and trade your gold there for the local currency"

And now, more and more all over the country people are asking just where is such a place that the babylonian banksters don't already have a controlling central bank at? North Korea and Iran? It has destroyed most countries already, set up china to be the next world's money engine, and now hungrily hounds to destroy the last somewhat free country, the USA. The whole chicken-pot pie is quite the amazing story even just seeing some of the dominoes that have been set up to crash the rest of the story, upon a Friday's ticking.

Lets see, Iran is about to be attacked possibly, and so is NK maybe. Now, where was that place to go? And where is it safe to be when all the fallout hits? Who is east of Iran after say God forbid, some sort of nuklear event happens? Just one small one. Ask, who is east or north, or even west of the fallout that will surly have it's way in the winds making fukushima look like a picnic in the dark park of death? Does anyone ever think about these things when it comes to profits, and the sustaining of ones own human life experience? Any third grader knows, that the fallout will absolutely effect every soul on board. No one will escape the initial hit or...the following hits.

If you have not seen this movie and completely grasped the deep meaning, you should.

http://www.youtube.com/watch?v=upg2eqNbF3w

Choice! The Creators greatest gift to each individual heart on board. Every single one has a vote. Total annihilation, or world-wide peace and plenty?

Choice!...please use it well.

Wed, 02/20/2013 - 15:11 | Link to Comment Not Too Important
Not Too Important's picture

'Wait until the crowds in the big cities start heading for the country side!'

Not if they can't get the gas. Long suburbs!

Or at least until the food runs out . . .

Wed, 02/20/2013 - 16:00 | Link to Comment The Heart
The Heart's picture

"Wait until the crowds in the big cities start heading for the country side!"

One tank of gas will be about the size of the diameter around most big cities that will fall into the chaos the babylonians have long been preparing for. There will be the road blocks and death pits that many will make a frantic dash to, and find the end of the road at.

Watch out for what comes on any Friday that can be the triggering event?

We all just witnessed on the big cruise line boat a live-lab sample of how fast society can break down into primal conditions, thus testing the real core essence of one's spiritual center. What the future holds for many is to be on one of two sides. Those who will eat, and those who will kill to eat. The god will become the stomach, and all that will matter is the scavenging for food and safety. The evil babylonians will use food as a weapon against the people they are setting up to be too poor to feed themselves already. In the first months, the babylonians will be slow to respond so as to let the populace chew themselves up first. After the slow to a crawl commerce on the roads ceases, and the well orchestrated depletion of the supply chain happens for months, those who have survived up to that point will be given the choice to come under the killing umbrella of the govt with GMO nano-chip laden food to offer for compliance and conformation to the new world order of the cashless society for the profiting corporate banksteronians all across the globe, but mostly in London.

Wed, 02/20/2013 - 16:54 | Link to Comment ImReady
ImReady's picture

But, But... the FOMC said they may be looking at an exit strategy

 

 

 

Wed, 02/20/2013 - 14:01 | Link to Comment fonzannoon
fonzannoon's picture

tecno no one who actually owns a real ounce of gold gives a shit anymore. $1500, $1100.....$500...

They will buy more, You are watching people flipping paper contracts.

The miners are the most interesting to me. They are getting shorted to death.  They actually create supply.

My guess is the US is causing a crash in gold so that they can get some sheep to dump physical so they can hand Germany a pile of gold jewelery that the sheep dumped.

Wed, 02/20/2013 - 14:11 | Link to Comment tecno242
tecno242's picture

ironically... if you hold tons of gold.. you are betting that the FED wins

other than that.. you are only creating a SHTF guns and butter reserve.. which i'd rather have guns and butter.

Wed, 02/20/2013 - 16:34 | Link to Comment Village Smithy
Village Smithy's picture

But guns and butter and gold would be best.

Wed, 02/20/2013 - 13:56 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

If the Teams of POMO, internationally I might add, continue to try to make the markets, they will break them. 

Reality will trump magic at the end of it all.

Wed, 02/20/2013 - 14:01 | Link to Comment Confundido
Confundido's picture

The question is....will you be still alive by then?

Wed, 02/20/2013 - 14:00 | Link to Comment Downtoolong
Downtoolong's picture

Don't tell me, Corzine is back in the game.

Wed, 02/20/2013 - 14:01 | Link to Comment Confundido
Confundido's picture

Why would precious metals also not halt trading at 2am, 4am, 8:20am, 10:30am?

Wed, 02/20/2013 - 14:03 | Link to Comment Hongcha
Hongcha's picture

California is basically at $4/gallon right now ... this is the nose-above-the-waterline level ... if it goes on to $4.25 or merely just hangs above $4 a high-pitched signal starts in the immediate atmosphere ... never mind the crushing $3.50-3.80 that they are trying to condition people to accept ... they need to drop it back there ... SPR reserve release rumor in the wings?

Wed, 02/20/2013 - 14:59 | Link to Comment SDShack
SDShack's picture

Gas is $4.19 to $4.39 a gallon here in SoCal right now. If nothing changes, it will be $5+ this summer. No way the economy can sustain this.

Wed, 02/20/2013 - 15:38 | Link to Comment steve from virginia
steve from virginia's picture

 

 

 

Sorry kids,

 

Auto-centric Cali is in the Peak Oil cross-hairs. Too bad they ('They') got rid of the Red Car.

 

This is how it goes ... it starts getting worse as time passes. Eventually there are physical shortages and rationing. Coming to a suburb near you.

 

Wed, 02/20/2013 - 17:29 | Link to Comment Ident 7777 economy
Ident 7777 economy's picture

 

 

Hongcha:

 

" ... SPR reserve release rumor in the wings? "

 

As a move to threaten crude-supply contract chasers? 'cause supply would not seem to be the issue (the SPR is not refined product) 

Wed, 02/20/2013 - 14:06 | Link to Comment DUNTHAT
DUNTHAT's picture

AAAAAAAAAAAAHHHHHHHHHHHHHHHHHHhhhhhhhhhhhhhhhhhhhhhhhh!!!!!!!!!!!

Smell the M A N I P U L A T I O N.......

Wed, 02/20/2013 - 14:07 | Link to Comment batz
batz's picture

 

 

 

Seriously, does nobody on Zerohedge have a feed to see what participant originated these orders? Come on, I thought this was a financial news site. Maybe that's where I'm wrong.

 

Wed, 02/20/2013 - 14:22 | Link to Comment Central Bankster
Central Bankster's picture

It helps when the users know what they are talking about. 

Wed, 02/20/2013 - 14:44 | Link to Comment batz
batz's picture

 

 

 

By, "know what they are talking about" do you mean, "has written a parser for said Nanex data feeds?" Because if that's what you mean - and you haven't, and I have - then by all means, go fuck yourself. 

 

Wed, 02/20/2013 - 17:31 | Link to Comment Ident 7777 economy
Ident 7777 economy's picture

 

 

 

batz:

 

Seriously, does nobody on Zerohedge have a feed to see what participant originated these orders? Come on, I thought this was a financial news site. Maybe that's where I'm wrong. "

 

My thought too ... in lieu of that info, we need a 'leaker' to reveal the source of the sell order ...

Wed, 02/20/2013 - 14:17 | Link to Comment darteaus
darteaus's picture

It's a cash-out:

 

1)  Smash the price of PM & WTI,

2)  Trade cash for all you can get your hands on, and

3)  Let inflation out of the cage.

Wed, 02/20/2013 - 14:13 | Link to Comment SDRII
SDRII's picture

EIA says US to Surpass Saudi Arabia production. And Russia in Natgas = shaping the battlefield. Add to it the EIA talking up the Cushing unlock coming to a theater near you soon...

IMF Warns on Saudi deficits.

Saudi Aramco cyber attack comes days after Saudi media says would shoot down IDF overflight

If you didn't know better, you might be mistaken in thinking someone wasn't trying to "shape the battlefield"

 

Wed, 02/20/2013 - 14:14 | Link to Comment Eternal Complainer
Eternal Complainer's picture

It's just like the old Wild West where anything goes and everything criminal is the law of the land.

Wed, 02/20/2013 - 14:20 | Link to Comment SillySalesmanQu...
SillySalesmanQuestion's picture

You hang on Missy...we go for a ride!

Wed, 02/20/2013 - 14:30 | Link to Comment Orly
Orly's picture

Why do I have the feeling that something really big just happened?

Wed, 02/20/2013 - 14:49 | Link to Comment akarc
akarc's picture

cause it is still happeniing?

Wed, 02/20/2013 - 17:16 | Link to Comment fuu
fuu's picture

1564 by the end of Feb it seems, nice early call.

Wed, 02/20/2013 - 18:53 | Link to Comment Orly
Orly's picture

Nah...something BIG. Like we can't even see it yet.  A sea change.

Wed, 02/20/2013 - 18:59 | Link to Comment fuu
fuu's picture

Ok but I was just giving you props where props were due. I have no opinion on something wicked this way comes.

Wed, 02/20/2013 - 20:53 | Link to Comment Orly
Orly's picture

Thanks but for what it's worth, yesterday I called for a reversal.  That's why I think something just happened.

Fed turned off the spigot to the European banks, maybe?  I guess we'll find out in about a week.  Somebody knows something somewhere.

:D

Wed, 02/20/2013 - 14:45 | Link to Comment MountainMan
MountainMan's picture

One day per week of this action would be perfect!

Wed, 02/20/2013 - 14:47 | Link to Comment nobusiness
nobusiness's picture

Do they ever Halt a stock on the way up?

Wed, 02/20/2013 - 14:54 | Link to Comment bugs_
bugs_'s picture

Hello this is the JPM Contract Crashing Desk...

Oh its you....

Uh huh....

Yeah...

What do you mean wrong contract????

Wed, 02/20/2013 - 14:57 | Link to Comment adr
adr's picture

So if oil jumped $10 would trading have been halted?

Wed, 02/20/2013 - 17:33 | Link to Comment Ident 7777 economy
Ident 7777 economy's picture

... again, (RTFM) it was a follow on sale that triggered the breaker (during the halt the trade/sell was cancelled was my read) ...

Wed, 02/20/2013 - 15:04 | Link to Comment earleflorida
earleflorida's picture

'as man walks through his life, he stumbles upon truth... then glorified bleached truths, and next onto lies, damn lies,and statistics, moving along he find himself in a delusional state, when finally reaching his wits-end, he realizes that a daily dose of a nostrum self-induced amnesia panacea is best for  his menial existence... as he trips upon his serendipitous equilibrium, only to find the downhill path of old age a tether-torn acquiescence meshed with a soulful  acquittal-- resting amongst the thrones a post'd sign appears, reading,'to old to soon... too smart to late', as he quietly laughs himself into a twilight slumber'    

just musing... 

Wed, 02/20/2013 - 18:46 | Link to Comment Bandit und Buster
Bandit und Buster's picture
  • Or in Deutsch,   'Too soon alt, too late shmart!"
Wed, 02/20/2013 - 15:13 | Link to Comment Soph
Soph's picture

...and we didn't see the collapse after the halt why, then? Clearly its got to be multiple shooters then, on the grassy knoll, and they need time to reposition to get a good shot.

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