Market Update: Risk-Off, Reality-On

Tyler Durden's picture


Things are escalating rather quickly... Treasuries have soared to yesterday's low yields (below 1.90%), S&P 500 futures are cracking lower on heavy volume -10 points (with the cash S&P below yesterday's lows) - after the other indices all went green earlier. The FX market is in a mini-crisis with EURUSD dumping and JPY strengthening considerably and rapidly. In Europe, it is worse as Portuguese, Spanish , and Italian bond spreads are snapping wider to post Cyprus wides; Spanish and Italian equity markets are tanking down 3-4% on the week; and GGBs are back under EUR50 - their lowest in 3 months. Gold and Silver are rising as Copper and Oil slide. Swiss 2Y rates are negative at their lowest in over 2 months. VIX is up 33% from Thursday's lows and back above 15% - biggest 2-day jump since Nov 11.

Equity Indices once again managed to get green from Friday but that ended rapidly...


and while S&P 500 cash is below yestereday's lows, futures stil have some room to test...


EUR weakness and JPY strength... oops

as EURUSD breaks below the 200DMA...


Protection is bid as VIX leads the way down...



and Europe is getting out of hand fast...


Charts: Bloomberg 


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Tue, 03/19/2013 - 12:13 | 3347537 Cursive
Cursive's picture

Wake me up when we get to SPX 600.  I might be interested in "investing" again.

Tue, 03/19/2013 - 12:18 | 3347572 otto skorzeny
otto skorzeny's picture

I'm holding out for DJIA 600

Tue, 03/19/2013 - 12:21 | 3347593 Cursive
Cursive's picture

@otto skorzeny

We can always hope.

Tue, 03/19/2013 - 12:23 | 3347615 Element
Element's picture

Full of HFT bots though.

Tue, 03/19/2013 - 12:30 | 3347668 DoChenRollingBearing
DoChenRollingBearing's picture

This may be just HFT as well, but I see that gold just started (a few minutes ago) another little mini-spike...



The Central Bank of DoChenRollingBearing added some gold to its reserves just yesterday...

Tue, 03/19/2013 - 12:34 | 3347707 otto skorzeny
otto skorzeny's picture

I'm continuing my bank run.

Tue, 03/19/2013 - 12:39 | 3347728 DoChenRollingBearing
DoChenRollingBearing's picture

$1613 and still running...  But, I own gold for the long-haul, these short-term upspikes are a nice change, as usually gold goes DOWN after I buy it.


$1614 at 12:39 US ET...

Tue, 03/19/2013 - 12:45 | 3347804 MillionDollarBonus_
MillionDollarBonus_'s picture

Good thing I bought US treasuries as a hedge. Not only am I collecting a risk free return, I'm also hedged against any instability in the market.

Tue, 03/19/2013 - 12:46 | 3347811 otto skorzeny
otto skorzeny's picture

you're en fuego today

Tue, 03/19/2013 - 13:06 | 3347834 DoChenRollingBearing
DoChenRollingBearing's picture

I cannot argue with that short-term move, MDB.  H/T!  But, that seems to me to be smacking of trading..., at the right time (soon?), you may want to sell those Treasuries...


Au at $1615 now, just in case you wanted to know, MDB.

Tue, 03/19/2013 - 13:27 | 3348159 dumpster
dumpster's picture

a hedge against .. lol  your hedge was probably a foot long subway .. with white bread.

did they give you back your 25 cent change or did you walk out with out giving the tip


Tue, 03/19/2013 - 12:49 | 3347786 TruthInSunshine
TruthInSunshine's picture

When the SPX is at 600 again, you'll know beyond any iota, atom or quark that the Higgs boson bottom is not in, and that Bernanke's "Virtuous Circle" monetary/macroeconomic/psychological/behavior modification/sociological/marketing/telemarketing/as-seen-on-TV policies have been discovered to have been fraudulent by even the mass of sheeple, so I wouldn't recommend buying the dip at that time.

Besides, most publicly traded corporations will already own most of their now deeply distressed "stock" anyways, long ago having borrowed money at 0.5% to 1% by corporate bond floats and having bought back huge blocks of their own shares during the "salad days" of 2009 through 2013.

The kick-the-can global shell of an economic monetary structure, as hollow as it now is- translucent & brittle- is all riding on The Bernank's ability to keep successfully priming the "Virtuous Circle" pump, if even for a little while longer.

Tue, 03/19/2013 - 12:59 | 3347909 azzhatter
azzhatter's picture

Demonstrates the idiocy of ZIRP. People really have no incentive to keep any money in banks, there is no return or negative return and now the risk is explicit. I think we should see bank runs everywhere including the US. Think about it, keeping your money in the bank is now risk only-no reward

Tue, 03/19/2013 - 14:14 | 3348019 TruthInSunshine
TruthInSunshine's picture

Absolutely the opposite - the smart money, well those who have actual, realized "money," are all about preservation of capital at this point.

Of course, there aren't that many smart people as a % of the population, let alone that many people who have actual, rather than nominal/balance sheet money.


Tue, 03/19/2013 - 12:41 | 3347776 Praetorian Guard
Praetorian Guard's picture

Who cares, this shit is coming...

Tue, 03/19/2013 - 12:50 | 3347839 venturen
venturen's picture

what is investing?

Tue, 03/19/2013 - 12:13 | 3347542 Headbanger
Headbanger's picture

What's a "reality"??

Tue, 03/19/2013 - 12:17 | 3347566 otto skorzeny
otto skorzeny's picture

those are tv shows that people watch to escape the "real" reality(the one where everybody is broke)

Tue, 03/19/2013 - 12:28 | 3347647 SheepDog-One
SheepDog-One's picture

Funny how 'reality shows' are now just showing the most pathetic things imaginable so that most people watching can say 'Whew! Well I feel better, at least I'm not THEM!'

Tue, 03/19/2013 - 12:42 | 3347726 James_Cole
James_Cole's picture

Funny how 'reality shows' are now just showing the most pathetic things imaginable so that most people watching can say 'Whew! Well I feel better, at least I'm not THEM!'

You're out of your mind.

Tue, 03/19/2013 - 12:57 | 3347888 akarc
akarc's picture

I thought it was because the viewers could relate.

Tue, 03/19/2013 - 12:23 | 3347611 eclectic syncretist
eclectic syncretist's picture

like when the lookouts spotted the iceberg from the Titanic and were praying to God that it wasn't too late to turn and miss it. 

We are not far from that point in the markets right now.

Tue, 03/19/2013 - 12:30 | 3347662 James_Cole
James_Cole's picture

like when the lookouts spotted the iceberg from the Titanic and were praying to God that it wasn't too late to turn and miss it. 

There's the ultimate metaphor for humans, always hoping for the best while gunning right for an iceberg! 

Doesn't matter if people are really stupid or really smart, that seems to the one constant trait among most I've met. 

Tue, 03/19/2013 - 13:28 | 3348166 PeeramidIdeologies
PeeramidIdeologies's picture

It works on many levels. It's a well know fact that one can only see 10% of an iceberg from surface...

Tue, 03/19/2013 - 13:30 | 3348170 PeeramidIdeologies
PeeramidIdeologies's picture


Tue, 03/19/2013 - 12:39 | 3347759 tinsmith
tinsmith's picture

Remember that if the Titanic had just hit it dead on she would have been damaged, but could have stayed afloat and either limped to port or stayed up long enough for help to arrive. In a parallel to what TPTB have been doing, it was the attempt to 'avoid the pain' that doomed her. All of the can kicking and shenanigans has breached our hull, and the watertight compartments are filling. We are truly just re-arranging deck chairs at this point.

Tue, 03/19/2013 - 12:40 | 3347761 tinsmith
tinsmith's picture

Double post

Tue, 03/19/2013 - 12:14 | 3347545 Dr. Engali
Dr. Engali's picture

Darn that triple top at S&P 1565 is a bitch.

Tue, 03/19/2013 - 12:25 | 3347626 SheepDog-One
SheepDog-One's picture

Funny how the 'trouble times' conveniently come right at the old market tops?

Tue, 03/19/2013 - 12:34 | 3347698 Dr. Engali
Dr. Engali's picture

Yep it helps proved cover for new printing to help push the averages through resistance.

Tue, 03/19/2013 - 12:15 | 3347548 McMolotov
McMolotov's picture

Burnin' down the house.

Tue, 03/19/2013 - 13:44 | 3348281 GoinFawr
GoinFawr's picture

They must be using natural gas... it's having another opposite day

Tue, 03/19/2013 - 12:15 | 3347552 slyhill
slyhill's picture

Make moar popcorn!

Tue, 03/19/2013 - 12:15 | 3347557 Hedgetard55
Hedgetard55's picture

Ben will fix this and print up 6 bil for the Cypriot banks.

Tue, 03/19/2013 - 12:37 | 3347747 CrimsonAvenger
CrimsonAvenger's picture

No kidding! He's printing $85B a month, and he can't spare six to paper this over? On $85B, $6 is like the tip you'd leave for a bad waitress.

Tue, 03/19/2013 - 12:16 | 3347560 otto skorzeny
otto skorzeny's picture

flat by close-"Stocks are off their lows for the day"

Tue, 03/19/2013 - 12:17 | 3347569 BlueCheeseBandit
BlueCheeseBandit's picture

GREAT GLORIOUS DAY! A time of healin for the wrongs that have been done to us all!

Tue, 03/19/2013 - 12:17 | 3347571 The Invisible Foot
The Invisible Foot's picture

They still have the ramp-up attempt at 3.

Tue, 03/19/2013 - 12:20 | 3347588 glenlloyd
glenlloyd's picture

I'm betting that it'll be much less rampy today

Tue, 03/19/2013 - 12:22 | 3347599 fuu
fuu's picture

Maybe off rampy.

Tue, 03/19/2013 - 12:22 | 3347603 akarc
akarc's picture

Apparently New Zealand is preparing just like Cyprus

Tue, 03/19/2013 - 13:06 | 3347978 DosZap
DosZap's picture

Apparently New Zealand is preparing just like Cyprus


"There will come a time when what seems right will be wrong, and wrong will be seen as right".


We have entered that truism a while back(and not just the Pols/Bankers but the populations thinking as well)

How can you justify a depositor funded bailout, when their purpose is to just be depsitors?.

Why should they be held accountable for crappy investing on the Banks part, using their funds?.

YOU cannot. And no such thing as a wealth tax is either,taxing double is immoral and damnable.

New Zealand is also evidently gone FAR left.

Tue, 03/19/2013 - 12:18 | 3347577 LawsofPhysics
LawsofPhysics's picture

Right.  The "official" markets are a long way from reflecting any sort of reality or true price discovery.  What garbage.

Tue, 03/19/2013 - 12:22 | 3347601 LawsofPhysics
LawsofPhysics's picture

time to play dominoes...

Tue, 03/19/2013 - 12:18 | 3347580 Panafrican Funk...
Panafrican Funktron Robot's picture

Some reality to consider:  

In March 2006, housing permits (not seasonally adjusted) were at 1.94 million.

In March 2013, housing permits (not seasonally adjusted) were at 0.67 million.

Mind you, not seasonally adjusted housing permits are probably the only housing metric published by .gov that is has even a decent amount of connection to reality.

Welcome to the recovery.

Tue, 03/19/2013 - 12:33 | 3347696 Panafrican Funk...
Panafrican Funktron Robot's picture

Just to add to the tragicomedy:

In March 2006, the average sale price was 298K

In March 2013, the average sale price was 286K.

Now, consider that even per the b.s. CPI metric, we've experienced 15% total inflation in that period.  So, in "chained dollar" terms, that March 2013 number goes down to 243K.  Summary:

Permits are down 65% compared to 2006 peak.

Sale prices are down 18.5% compared to 2006 peak.

Tue, 03/19/2013 - 12:20 | 3347587 ekm
ekm's picture

Only if primary dealers and major euro banks default on their CDS loss payments. 

That would happen only if the Fed stops QE on Wednesday.

Tue, 03/19/2013 - 12:48 | 3347824 swissaustrian
swissaustrian's picture

Not gonna happen, EUR/USD is way too low for the FED.

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