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When An FX Margin Clerk Flaps Its Wings In Japan, US Stocks Slide
Both VIX and credit markets decoupled to the downside soon after Europe closed as equities clambered higher amid lower and lower volumes. As we headed into the last hour though both markets snapped higher to catch up to stocks and that mini-capitulation seemed enough for the equity rally to run out of steam. With the JPY strengthening all day, equities ignored the message of the carry traders until the close - when a big sell-side imbalance (and reality) smacked stocks lower to catch down to the all-important VWAP level once again. The USD saw its worst two-days since Oct 2011 giving up 3 weeks of gains. Gold and Silver are up nicely on the week (1.6 to 2%), outperforming today. Equities still managed gains on the day (despite the late-day tumble) and (oddly) Treasuries also ended very marginally in the green. The last few minutes of the day - normally kept open for some levitating algo to save the day - was a cliff-dive as news of FX margin controls on the all-important JPY carry driver smashed all risk-assets lower.
The USD had its worst two-days in 19 months...
The USD has been hammered (with EUR and JPY strength dominant)...
Credit decoupled after EU close, was ripped back to recouple then collapsed lower...
notice HY (light red) closed at the lows of the day!
just like VIX...
after the JPY margin chatter...
But at least we now know - in case it was ever in doubt - what the most leveraged to the carry trade are... (HY see above and Trannies and the Dow)...
Charts: Bloomberg and Capital Context
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So how much did the apparent worth of the US economy just decline in a few minutes because the Japanese are planning forex margin changes? LOL
Probably a lot, we wear things out 3 times as fast as they do so the numbers don't add up initially. But eventually the message gets thru.
What does the US Economy have to do with it? This is the stock market man - its all about predicting what the next hot ticker or ETF will be and buying that.
I mean do we really even need underlying companies? Just have a computer randomly generate quarterly reports and then we can take the underlying corporation completely out of it...
Leveraged carry , bitchez !
Gonna get interesting when the crackheads start killing the dealers because the crack ain't free no mo.
"A wino ain't afraid of nothing but runnin' out of wine...." - Richard Pryor
USDJPY under 100 tomorrow? Indicies down again even in the face of big POMO?! we shall see
Hoping for no news or bad news no volume retard overnight ramp-up. Target is spy @ 168.50 by COB friday to put it at the top of the channel it's been riding in the last 6 months.
about those yen carry trades...
He presses the lever and the balls shoot up...he waits...and the balls come back down again.
Nice markets, Mr. Bernanke. I'm sure millions of Americans are chomping at the bit to get into the wonderful Pachinko machine market you have built. Nice work, sir.
Fun fact: pinball machines in the USA were banned under gambling regulations until they changed from a game of chance to a game of skill.
How?
They added flippers and (later) the tilt option. True story.
Rah Rah King Doelarr!
(shout out to Mr Lennon Hendrix)
If Now() = Today() + (13.5/24) Then
Buy(Shares) *(-1)
I am going to buy some TULIPS!
You can pre order your BernankBulb now.
This is finally getting fun. Are the long nikkei crowd all going to get out of the trade before the others do?
Walk calmly towards the exit. No one panic please...
Huge POMO day Friday!!!
"Please do not worry."
Everything is coming together now...globally....feeling heavy you say?
The equity/bond Super Nova is just beginning to collapse into an immense Black Hole......
USDJPY under 100 tomorrow?
Offshore or not,the assets that the shadow banking system possesses are going to come under more scutiny as the U.S. Governments' trillion dollar intitlement deficits worsen.Like I said yesterday,in my opinion when the Feds come to the crunch,they won't bother with 100,000 in your bank account,why should they?There are trillions offshore that are hidden(well at least all the crooks evading taxes think it is).I always get a kick out of all these corporate gangsters and the banking shadow mafia.They never think that the politicians in Washington will pull the plug on them.When push comes to shove,they'll be told to repatriate the bread or the politicians will confiscate it.Count on politicians to bring out the patriotic,flag waving bullshite in order to save their rotten hides.It's too big an issue to ignore and will serve to pay off the deficit if necessary.Some say,that'll never happen.Wanna bet?They're sitting ducks and every politician now knows that that's the big reason for unemployment and the lack of tax revenue.It's either that or she all goes bust.
Wow, you act like this shit is real. Weird.
delusional gubmint overreach is always weird.
Kuroda: "who are u trying to get crazy with ese? Don't you know I'm LOCO?"
sawoff shotgun hands on the pump, get that liquidity injection up ur rump
la la la la la la la ~