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Today's WTF Chart
We know it is early in the day for a divergence chart, but the inexorable bid for US equities overnight (amid dismal global economic data from China and Europe) juxtaposed against the seemingly rational response of US Treasuries to drift lower in yield as growth expectations fade just leaves us saying WTF...
so what is driving S&P 500 futures? Why AUDJPY of course...
And remember, once Europe closes the correlation flips to EURUSD...
Which reminds us, as would make perfect sense in a world where Europe's economy is in depression (and tail risk has been removed) Spanish, Portuguese, and Italian sovereign bond spreads have collapsed 30-35bps since Friday...
It would seem that all that excess BoJ/Fed liquidity is now in A-B-J mode - Anything But Japanese...
Charts: Bloomberg
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Thanks for posting this Tyler. This is damn near unbelievable. When the fuck is this going to roll over? I guess there's just not enough bad news/economic prints out there. And its not the EURUSD.
Um I think you meant to say...
Thanks for posting this Tyler. This is the new normal in these rigged, bizzaro world, clusterfuck, corrupt, bullshit, ponzi schemed, fake markets.
All fixed for you FL_Conservative.
Sorry and thanks. I keep forgetting that the "free" is missing from these "free markets".
It's ok. We all forget we are in a simulated reality from time to time.
And sure as shit....here comes the EURUSD ramp. UFB.
massive transfer of wealth. wait til the s and p drops-even more wealth to those ever few with billions already.
Gotta concentrate on the positive...all those millions of Americans written off the unemployment statistics gotta do something, and looky here, they are all sitting around watching Netflix and getting fatter by the day. Netflix rises by over 40 bucks in one day! This is so bullish Rob Pisonme must be walking around with a big wet stain on his pants from all the loads he's been busting.
If one re-reads: http://www.zerohedge.com/news/2013-04-22/only-chart-required-price-us-st... and takes a look at this quote:
Then you would know that 5 * balance sheet = NYSE market cap. ... The markets are going higher. How much higher? Moar higher.
This all ends well right? Doesn't it?
Whoa. Deja vu.
When currencies across the globe are being debased at an ever increasing pace all sort so strange things happen. It's almost as if we are witnessing the quantum action of the sub-atomic particles of economics unfold in the seeable realm and we cannot make heads nor tails of the results.
I think it best to just move the veiwer out to a dimension we can understand and forget the small, unknowable movements that mae up this clusterfuck waiting to happen.
Here is what we know - it is all going to end badly. What we don't know are all the crazy, incomprehensible actions that will take place between here and there.
Exactly, why the disconnect? Simple answer;
http://research.stlouisfed.org/fred2/series/BASE
Looking at that chart, in the first half of 2011 we had a similar rate of increase in the monetary base as we have this year. For the first 6 months or so of that year the monetary base increased by roughly 700 billion before it flattened out in June-July. When it flattened out the markets tanked at the end of July(although they topped the first week of May, the plunge didn't take place until the end of July).
We are now 4 months into this year, and the monetary base has increased roughly 450 billion in that time period. However, being that the Fed's bond and MBS buying is going to happen every month this year with no hope of flattening out during that time, am I to assume we won't see more than a 3% 'correction' in the US equity markets for the next 8 months?
I mean this shit is already FUBAR, and I can't even barely bring myself to check in to see what the stock indices are doing anymore because of the complete and total lack of any correlation to other markets. What the hell is it all going to look like if we ramp for another EIGHT months on zero growth?!
My questions are only half rhetorical, because the lack of sense that any of this makes, actually has me at a loss for answers. Frustrating.
"When currencies across the globe are being debased at an ever increasing pace all sort so strange things happen."
ATM yours is a Beautiful description of the transition in a chaotic system (mathematical chaos, not random) from one attractor (state) to another attractor. You can predict what the attractors are, but you can not predict to which one you will go once the transition starts. Neither can you predict the trajectory of the system between attractors.
Until next time,
Engineer
Guys/Gals, for a beautiful description of the forces at play, please read "Irrational Exhuberance" from Shiller. And for the consequences of that exhuberance read "This Time is Different" the Margaret Reinhart. You'll need to fill in the blanks between both books but you will have the most complete picture possible of what is going on and why. Neither author dears to place the blame where it belongs, but between both they make it obvious even to the sheeple!
There are probablities of zero where the event does occur (it's called tunneling) in quantum mechanics. Not sure how that applies here. Must have something to do with either not giving a shit or having no soul.
Sorry people, porn is porn is porn! No matter the charts, the outcome has not changed. A simple look back at history tells us everything we need to know about these charts and the end game outcome.
It's now just a waiting game and the theater of what TPTB will do to try and hold it together just a little longer...
DaddyO
when 'the buyer' has an infinite amount of fiat money it is sort of like playing Monopoly with a 3-year old who controls the bank - they'll buy everything and always win. It is cute when they are 3 but not when its a chubby little man with a Nero complex. Burning down the house....(cue The Talking Heads).
Or even better and older..http://youtu.be/A_sY2rjxq6M
It's all Bubble Bernanke and the inkjets now. Riding on the QE cloud from here on.
breifing.com has said what we all know...........
"Yet, the market is indicated to open higher because the fun mentals matter of knowing companies beat lowered earnings estimates and that weak economic data should keep the central banks in an easing frame of mind."
Never too early for a WTF chart!
Not as hunbelievable as the cost of a good Greek Virgin Light Olive Oil. The WTF moment comes after you realize it's increased 35% in one year!
You might have to go back to bacon greece.
That's funny!
Right now the Fed and the governments statistics take and adjust that by:
Current inflation rate /10 = new sheeple adjusted inflation rate.
Chances are 3:1 that the olive oil is fake. http://news.yahoo.com/exclusive-group-finds-more-fake-food-ingredients-0...
Ya at this point it is most likely recycled motor oil produced by Jon Corzine Inc.
I picked the wrong week to give up motor oil.
It's amazing that rather than simply trade the clear signals on the S&P chart, ZHers just ignore them as "irrational" or "unreal". The S&P 500 chart has demonstrated resilience in the face of GDP misses, wholelale inventory misses and NFP misses. All of this is teling you something. The S&P is pricing in future growth. Today's growth is yesterday's news. Economists and investors look at the green shoots in economy and infer future growth in the economy.
+1 MDB, you're always good for a laugh. Can you actually say this shit with a straight face?
MDB is that tracking cell phone still up your ass? I'm getting an echo....
Clear signals?!? Are you completely daft, or really good at faking it? All clear siglnals are that this shit is over priced and is not reflected in reality. S&P has decoupled from a lot of its historical norms to follow nothing but lunacy.
Hahahaha!
MDB......is the Anti Tyler!
Guys/Gals, lets not fight among us. Lets listen to each other. What he says is absolutely true, that is why I am going to business school, just to understand their view of things and how they think! They are wrong, but you need to get deep into their assumptions to argue your point. Polarizing and fighting innstead of intelligent discussion favor Bernanke, and is what allows him to keep on doing what he is doing.
Where is the falacy? The falacy is in the level of monetization. The more monetization, the more higher the bet is for one side or the other one (growth/inflation vs. stagnation/deflation), therefore the higher the gain of each block in the system, the higher the gain, the higher the likelihood of positive feedback loops that create bubbles (see "irrational exhuberance from Shiller). The key here is whether you trust on faith alone, whether the FOMC will be able to shrink the money supply fast enough to maintain under control the economic system. My position, similar to anybody who understands the physics of nonlinear, dynamic, non-stationary, histerisis prone feedback systems, and how they lead to fractal behavior and mathematical chaos behavior, is that once the system gets out of its control range, there is no way to bring it back short of stopping the world financial system for a few weeks to restart it with completely new rules. This is similar to what we do in any chemical plant whose control system gets out of whack.
So, the key question is: Does the FOMC know how much is too much? The answer is HELL NO. Therefore, they are running a monetary experiment to try to attempt to avoid what has happened in the past, bankrupcies and depressions that enable the restart with the health parts of the economy intact. And without an informed consent from the people they are placing at risk. Something you would go in jail for in the USA health care system. The solution, a dream of PhD student, has never been tested and the final outcome could well be much much worse than the depression and bankrupcies that it is trying to avoid. The point is nobody knows for sure. My point is who gave him the right to play with our lives? An unellected official? This is the line of argument we need to have and go as deep as possible. Insulting will only fracture us into small non-relevant pieces. If we start uniting and elevating the level of the discussion we will become a very threatening force to the status quo. There are plenty of scholars in the economics world that are very upset at what they see happening, but they do not have a forum for now, where they can both discuss and communicate with people in a way that the sheeple will understand.
Also, those of you who think you know where we will end (stone age), you are claiming to be god, because only him can know. All the computer power available in the world can predict only a few seconds forward in this system, given its complexity.
Until next time,
Engineer
Wrong, all this is planned by our evil Oligarchs, and they now have total control of the markets, through fed printing and HFTs. That's why the market is so far removed from reality. They know exactly how this is going to play out. This current financial system will collapse because it is unsustainable, and only those holding physical assets will save their meager wealth.
Maybe they'll crash the market, maybe they won't, but only they know. They should all be hung for doing this, because when this pig goes, it's going cause tremendous suffering for billions of innocent people.
"Insulting will only fracture us into small non-relevant pieces." okay spine001, we get your drift, and you are completely correct. we/I won't call MDB a worthless fucking troll spreading asinine shit nonstop from the bully pig sty from whence he's crawled. we actually need the Moronic Dipshit Bastard to counter our irrational exhuberance each and every morning from the growing cesspool we see forming in the world from the unlimited greed and corruptness of the powers that be. so, in closing, if Mad Dog Bitch would kindly post his mailing address, i think we all could chip in enough to send a used roll of ZH toilet paper as a token of our sincere apologies.
would love to see your inputs for the delta of volatility for a market pricing growth into perpetuity.
MDB: I enjoy your commentary on ZH as much as I enjoy your arguments with Rick Santelli and Joe Kernan on CNBC. Don't you think your Q-score would go up if you got hair implants? Or is it too late for that?
How does Obowels bone feel in your rectum?
It's not about logic right now. It's all irrational. It's how people feel that seems to be driving these markets. It's about being part of the herd. I can't believe I'm thinking this way but this ridiculous stock market could go to the moon soon. Remember some book called Dow 20,000? Right around Y2K? How stupid it sounded then and how stupid now. No one believes it - that's why it might happen.
And yes it might crash, maybe we're on the moon right now.
But one thing has been bugging me for a long, long time - it feels like a trap. Print money out of thin air, lend trillions to governments so the citizens become indebted tax slaves who move their wealth out of bonds into more risky assets. Blow up the risk on bubble as big as you can then POOF - watch them loose their wealth in an orchestrated stock market crash. When they wake up they'll have a lien to pay for the rest of their lives because of their government's debt. So Dow 20,000 might be what is needed to suck all that wealth in...including convincing you to sell your gold and buy S&P index funds.
Look! You just wiped out the middle class and transferred all that wealth and their future incomes to the central bank. Plausible?.
so then why are Japanese yields not skyrocketing?
That would be for the same reason its not happening here (FED = BOJ).
This will end badly. But good for us here.
While I would like to agree, and my first instinct is to agree, I must beg to differ.
Thermonuclear currency wars are not good for anyone. And those who survive may wish they had not.
Hey C.D. - might have to add "Global" as in Global Thermonuclear Currency Wars.
Just saying.
Shall we play a game? :)
I fail to see a "good" outcome in terms of what I have seen over my lifetime. My kids will never experience the life that I have had, but that doesan't mean it is not worth living. But there will be many hardships regardless of the preparations we are making.
Stay together and stay strong.
These markets remind me of those tottering alien machines in the original War of the Worlds movies, just before they fell to the ground.
Easy explanation.
If THEY don't bid equities, THEY will be Corzined, since THEY are leveraged.
Remember paper gold being corzined due to leverage?
Seth Klarman's verbatim:
If you buy a security to sell it to a greater fool, if there are no greater fools left, then you are the greater fool.
here is how it works in the u.s markets.
when all across europe, markets are down 2-3 percent, u.s markets are either up, or flat. basically, we never follow them .
however, when markets across europe are up 2-3 percent on the day, like today, the u.s markets of course follow them.
i really want to start my own company, ill take it public, i can report the shittiest possible earnings and my companies stock would still go through the roof and make me rich.
this has become so comical.
thismarketisrigged
"i really want to start my own company, ill take it public, i can report the shittiest possible earnings and my companies stock would still go through the roof and make me rich."
Sorry sir, the club isn't accepting any new memberships at this time.
...except as front companies for the drug cartels.
The American Dream!
(can't remember who came up with that)
Why stocks continue to go up. History is your friend.
http://articles.businessinsider.com/2011-11-26/markets/30443754_1_stock-...
Just a little market pumping to give the institutional bagholders a higher perch from which to parachute.
Should see a swift sell off at the bell.
"Should see a swift sell off at the bell."
You forgot that AAPL reports today so indexes will remain up 1+% so hedgies etc can sell into the gains. But a nice thought.
Nope. DOW +100!!
"She's breaking up Captain Ben. We need moar fiat." - Sulu
"Full speed ahead and damn the Gold bugs." - Captain Ben
Sulu: Captain, it's still not enough! We're being pulled into the Jackson Hole!
Captain Ben: (makes hard decision) Mr. Scott! Jettison the Equities Markets! Their detonation might be enough to kick us clear!
Scott: (in printing room) Aye, they might, Captain! They just might!
In background, other crew members are grabbing for their cell phones, making frantic calls.
Holy smokes! Texas Precious Metals sold out of their Eagles allocation in 8 minutes! They had like 13,000! I just tried to buy and it wouldn't let me! DAAAAANG. Silver is FLYING.
https://www.texmetals.com/silver-eagle-monster-box.html
Somewhat off topic, but I have avoided purchasing pm's that have a currency valuation on them such as the silver eagle which is clearly marked $1. Couldn't the government recall the silver eagle and reimburse the holder face value, as in $1? Anyone have a correct answer to this?
I'll pay you 2 dollars for it.
Understand?
Ummmmm....no.
Think about it.
fun.gi.ble
Toolshed, he's a cheap bastard.
But I'm your friend.
I'll give you $4 -- in two-dollar bills!
Generous offer there espirit, but I'll give him 4 dollars and for every ten a bottle of jack.
And I'll give you 1 silver eagle for 10 bottles of jack. black label please.
I can see that we'll have to build a consortium (aka cartel) to set prices so that we all profit. Free market kapitalism, yeah baby!
There are several schools of thought on the topic.
My view is simple. They can and will change the rules of the game when it suits them to do so. So diversify your PMs as much as you can. I own some US Gold Eagles. I also own other forms of Gold. Same for Silver.
Iron frying pan and a torch will allow silver to change form. So will a five pound hammer and anvil.
That's exactly why I don't worry about it. It's not to hard to turn an eagle into a gold bracelet.
Coin shops have "melt buckets", you can too.
An old microwave and a silicon carbide crucible.
http://www.youtube.com/watch?feature=player_embedded&v=GwQ4C2dNkp4
Just be careful the insulation you use isn't flamable.
CD it's so good to finally see a picture of you. How did you land the "cenegenics" ad contract?
Good luck to them. I'm sure that campaign would go about as welll as firearm confiscation.
I'd melt or pound it into an unrecognisable ingot or some damn ugly jewelry first. And that wouldnt be illegal because its not actual currency, right?
No one is going 2 reimburse anything, why would a robber reimburse the victim anyway
"Sir, you and your family must exit your home while my S.W.A.T. team searches it for the terrorists and the precious metals they have stored inside without your knowledge."
yes, i do....they can try and do whatever they want...it is up to you whether you go along with it....if they ever do that , we will go out in style. because if we get to that point and you lay down and accept it . that is a life i dont need....so if any intruder came to rob you of all your hard work and saved rewards, would you just let them?
Remember a person a while back who mentioned, several times, on ZH, that a dinghy laden with all of his PMs, had unfortunately sunk while he (?) was out on the water. He was very torn up over it, and couldn't remember where it sank. How.....convenie....er, unfortunate.
Will you give it to me if I give you a Hamburger today?
Don't think they'll try to take it with the dollar designation, just an executive order in an "emergency".
You don't have to give it to them, FDR only got 15% if that.
"this will end badly"
"it's different this time"
"BTFD"
"WTF"?
Oh, that's the sand bagged auction from yesterday, soaked up by the euro market to pump them up until their close when our two bill auctions kick off resulting in a 200 point day today..
What did i win Alex??
AUDJPY? is there a memo that goes out telling everyone which carry is the new carry? seriously. AUDJPY is a cross between 2 horrible curriencies. AUD will crumble along with commodities and china.
We buy their wares, they send the flows our way.
You are witnessing the effects of liquidity beyond excess as all assets rally like crazy. That's all. Don't try to glean anything fundamental from it regarding the state of the economy. Market pricing mechanism has been purposefully broken by policy makers to create the appearance that all is well.
Gold,Silver,Oil and Asshats are not rallying like crazy.... That has WTF written all over it.
True, but the money printing is nowhere near over. Give it time.
Rotation of paper gold into stock markets should be good for a 50% pop. I say DOW 20,000 by July.
... and here's WTF report of the day from redbook ...
"Redbook said certain retailers reported lower customer traffic as shoppers followed television coverage of the Boston Marathon bombings and the subsequent manhunt for the two suspects."
I have seen so much WTF shit in the past four years that there is almost nothing makes me ask WTF.
Yep Doc. A WTF moment now would be a return to fun-de-mentals.
I have yet to figure out how AUDJPY is driving this as Australia is slowing due to reduced Chinese consumption and signs their real estate bubble is about to burst.
In the real economy Cat and Copper say things ain't pretty. In the world of paper, only the annoited can play in Fantasyland. After all, .Gov has their back. And naturally, you've got .Gov's back. No ?
Gist of G20 meeting: let BOJ do whatever it wants so long as it buys sov credit and stocks.
You know it's effed up when Netflix is the newly sanctioned safe haven for your retirement fund.
Everything "Evil" gapped down at the open Oil,Gold,Silver,Coal,Natgas, $VIX, .....BTFP Buy the Fucking Ponzi
he stock, commodity and currency exchanges have been reduced to gambling dens whereby the more powerful traders with deep pockets move the markets to maximize their own profits at the expense of the remaining not so powerful players.
The big boys have enormous money power to move the markets in the direction which results in maximum profits for themselves. They effectively use the media to lure the other players in the market to a position where they would incur maximum loss.
The markets will fall only when the banksters have eliminated all the short positions and only they themselves have positioned themselves to profit when the market falls
OR
When an unexpected world event catches the banksters with their pants down and the softwares they use to rig the markets go berserk beyond their control.
http://www.marketoracle.co.uk/Article35345.html
www.letstalkmoney2012.in
European markets are up between 1.5% and 2.5%.
DAX is closing in on all-time high.
I guess socialism is a financially sound system that helps business grow. LMFAO
Someone is lying. (more than likely, quite a few people are lying). Another trading opportunity folks.
I guess SP500 going to 1700 this year. It has no resistance up - none. It actually has a far, far easier time going up than down. Has for 4+ months. Even intraday it struggles to back off on the futures - they jam it, bid it and hold it. Volume drops off but that does not equate to selling. We are already 40pts higher than thursday - simply amazing. Even up 12-13 the futures keep trying - up 15, up 17 up 20 - there is no upper bound. On the downside there is almost always a lower bound - any time its -10 from high point they come in and aggressively buy.
Can't we just start ignoring the obvious? It seems 2 work for others, does it not.
No worry, Bubble Bernanke and the Fed will double QE, if that doesn't work they will double it again.
Public unions will start demanding higher pay in the scheme of things.
If you look at the flow I wounder if this is large Japanese pension fund or lifer ie selling yen buying dollars and then SP ie some type of asset reallocation..
Printing money doesn't look good so print stocks to the moon then do a 40% international bail-in and bam, all bank and soverign debt is extinguished. Interest rares are comin down to flush bond markets into stocks as well.
Citadel and their ALgos went ape shit turbo mode lololol
fucking bullshit.....
ignore everything until it's time to pay attention. there will be a memo detailing the exact time to pay attention. look for it.
If 10yr yield is diverging from SPX it indicates a correction, right on schedule for May might I add, is on the horizon. Why? Smart money piling into 10yr treasuries to hedge correction, dumb money piling into stocks to "buy the dip" which could end up being a very painful move. HOWEVER, I've been wrong before! Take what the market gives you to make a profit since our govt has made it practically impossible for normal citizens to get any kind of a return from other sources.
Blow-offs die hard.
Fade it.
Better to risk negative interest in the bank than risk annilation in the stock market.
At least my savings is in RMB denominated account rather than USD. I get, at least, some arbitrage gains.
401a money socked in money market. I am investing like a 70 year old.