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Stolper's "Stopped Out" Mea Culpa: Down 2.1% On EURUSD In One Week
Nobody could see this coming, nobody. Then again, by now Goldman's irreplaceable FX strategist, perhaps the most valuable one ever (remember in finance batting 0.000 is the same as batting 1.000), most certainly has a form "mea culpa" letter.
Stopped out of long EUR/$ after dovish ECB and better payrolls
At the beginning of last week we opened a long EUR/$ recommendation on the back of continued improvements in the Euro area periphery, after Spanish PMIs suggested that the economy has about stabilised following many quarters of contraction. We continue to believe that this will lead to further narrowing in sovereign spreads in the foreseeable future, with EUR-positive implications. We also highlighted the strong differences in BBoP positions between the Euro area and the US.
In the event, a more dovish ECB than expected, emphasised by yesterday’s comments from Governing Council member Asmussen, and a sizeable positive surprise in US payrolls moved rate differentials sufficiently to offset the EUR/$ supportive factors. We closed the recommendation yesterday with a potential negative return of -2.1%.
The resulting jump in the EURUSD is not a coincidence.
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The outlook wasn't brilliant for the Mudville Nine that day...
Stolper at the Bat
~~~
The table wasn't breaking for the Wall St. crowd that night;
The house was up 12 big ones with no change of luck in sight.
So, when Paulson came out snake-eyes, & Bernanke missed his point,
A mood of deep depression could be felt throught the joint.
The euro bettors, cleaned of cash, were heading out the door,
But all the big high-rollers stayed to even up the score.
They said: "If only Stolper had a chance to roll upon the dice,
We'd have a chance to change our luck, which now is cold as ice".
Then suddenly their eyes lit up, a cry rose from their lips,
It echoed off the slot machines & rattled off the chips.
It rumbled through the blackjack games, where cards were being dealt
For Stolper, LUCKY Stolper, was advancing to the felt.
His nails were cleanly manicured, his face was richly tanned,
His suit was iridescent silk, that cost a couple grand.
The cuff links on his sheer bastite were rubies from afar
Between his teeth he cooly smoked a 90 buck cigar.
There was ease in Stolpers manner as he calmly placed his bet,
His hands were steady as a rock, his palms were free of sweat.
The other shooters, now revived, together had one goal
To place each C-Note they had left, on Stolper and his roll.
With confidence he gripped the cubes, his bearing cool & calm,
Then blowing on them softly, let them nestle in his palm.
"A seven dice", he murmured, as he looked up at the sky
& a hush went round the table as he raised his arm on high.
The cool is drained from Stolpers face, his eyes are tense & keen,
And all along his sun-drenched brow, deep furrows can be seen.
And now he firmly holds the dice, and now he lets them go
And now the air is shattered by the force of Stolpers throw.
Oh somewhere in this wealthy land there is a happy spot,
Where naturals are being rolled and dice are running hot.
And somewhere men are doubling up & winners scream & shout
But there is no joy in Wall St. ~ Lucky Stolper has stopped out.
<edited from Frank Jacobs>
Wondering which pile of fiat crap is going to tank first is exhausting work.
Considering the fairly robust nature of securities industry ego's, you don't play with him so very much.
Maybe you will get your reward in heaven...
If ZH would have told me that Crude would be $105/108 and the ten year would be at 2.65% 3 months ago I would have guessed the S&P would have been around 1350 right now. I am in awe of the mighty Bernak.
Seriously makes one consider taking the blue pill.
No freaking way man. That's a poison pill, like taking an IMF bailout.
The London Fail.
LOL, "poor" Stolper, being trashed by the bad, bad Tyler Durden of ZH. ;-)
meanwhile note the "dovish" ECB remark, after the news that a big chunk of national cb governors trashed Draghi's request to lower rates and the way the ECB is again "draining"
meanwhile I had a look at the FX-reserves of the FED system: some 45bn, if you don't count the Treasury's gold, of course. that's half as much as they monetize every month
oh, and the NYFED published a great (that's sarcasm) report on how much FX-reserves other central banks should hold, minutely analyzing their composition
imho it's amazing. the American public seems to have no clue what FX-reserves are. at all. some still think that the trillion-dollar swap deal is still going on, even though this is now back down to some 50b
some still think that the FED is supporting other central banks
dovish or hawkish words seem to be way more powerful than any action. just amazing
oh, and several megabanks that recently wrote about "chances of Dollar HY" being about 5% now publish reports where they state that it's absolutely impossible. also amazing how fast they turned around, or that they feel the need to write such things
He should be trashed. He is 1 out of 14. Anybody with that track record should be run out of town instead of being rewarded for getting the muppets on the other side of the squids trade.
don't get me wrong, I'm cheering for Tyler in his trashing of Stolper. though I'm a skeptical person, and I would not wonder at all if one day it would come out to the sunlight - perhaps through ZH - that the Holy Vampire Squid publishes a fake "Stolper" reccomendation and gives their "muppets" the correct one. the "Stolpers" are, after all, public. a bad, bad word for some, that implies no private profit generation
but on the other side I've heard Squid customers that candidly admitted to be muppets in order to gain a different access to the financial world - and bragging rights
I remember people that bragged about being customers of Bernie Madoff, you know, the one that had a pure Ponzi scheme going on and - gasp - went to jail for that
Somehow I don't think that screwing over the muppets is doing God's work. Call me crazy, but I have a different interpretation of what God's work is supposed to be.
I refuse to believe Stolper has any muppets until proven otherwise. I think this guy stolper is like the crazy guy from office space in the basement with the stapler. That's why his name is Stolper. Stolper/stapler. There are no coincidences. This will continue to be a big joke until he burns GS headquarters down and ends up on a beach drinking mai tai's.
I could only hope to live long enough to see it happen.
Rationalizing that people like Stolper and firms like Goldman are stupid is a huge mistake. More likely this means that you don’t see or understand their game. There’s no shame in that for you or me, and it doesn’t imply they are moral, ethical, or just. On the contrary. shielding their real game from the masses and disguising their business as something else is a big part of their effort, and a big part of what makes it profitable for them.
I don't think GS is stupid. I think Stolper is fake, fabricated, to the extent that he has no actual clients that actually follow these garbage recommendations.
God's work will be done when man disowns his materialism and his ego.
Obama is working to remove our materialism.....but I'm not sure what he's going to do about his ego.
when the squid recommends a trade it means they have something to sell. even the muppets know that by now.
Goldman 'clients' get a bucket of Bazooka Joe gum & a secret decoder ring when they sign up for an account...
.. yes, like "famines", "natural desasters", "wars"(particulary of the religious kind), "burning heretics at the stake", telling fathers to kill their sons to prove their faith, rape and murder of little children, stoning people to death for adultery(well women anyway), setting humanity 1000 years behind in scientific progress, etc. etc. yes "God" has been very busy since when invented him
How is it that firms like Goldman, which consistently call markets so badly, can have entire quarters without a single day of trading losses? For you or me that would be like a twelve sigma event. Obviously they aren’t playing by the same set of rules that you and I are. Obviously, neither the Fed nor any other bank regulator of any significance feels a need to even ask, let alone find an answer to that question. Obviously that’s a failure of these publically funded organizations whose basic charter is to ensure markets are fair and efficient for everyone.
Compare the 3 trillion in consumer credit spending monthly in the US, with the 4 trillion traded each day in the FX space. Seems odd doesn’t it, i could never get my head around the sizes involved. 95% of it is "speculation", and only a fraction of the money is delivered. You have to conclude that the bulk of the money traded is used to move the market, just to punish people who are out of shape positionally.
There are practically no rules in FX. There is no rule for front running, you can meet Bernanke at the coffee shop and he could tell you what he plans to do; then you could express what he told you, legally, in the FX market to the tune on billions, without any fear of prosecution.
The same thing goes for traders at institutions, they can send each other all kinds of information about their FX intentions, its not illegal. Broker A can phone trader B and say, im willing to sell x amount of euro 30 pips above the spot, if you can take it up there, you can have the order, and a box of cigars. But in the span of that 30 pips, the broker wipes the nearby stops from his book and pockets the money.
The problem is that the retail flows don’t get near the market, they sit on the books of greedy brokers. If the retail flows went into the real market, the nature of the trading would change. As it stands, the game is totally all sewn up; privileged accounts, privileged brokers, privileged platforms, privileged traders, sniggering away at the silly retailer getting out of shape.
They are going to take it up because the USD is too high at 84. But if you are on leverage, you have to be right on timing too. And if you believe it is all rigged, they are going to knock the CAD up 4% as well. FOREX is nothing but a place for central banks to paint exchange rates to where they all agree things should be, much like Iran and China do.
"Offset the.....supportive factors"
I'll have to use this one sometime...a classic
Stopler must have a desk drawer full of these weasly little cliches that he consults when needed, or maybe there's a Goldman Communications team that spends all day devising them...
I just say thanks for the money. And hope a new anti stolper is on the way soon...
its not personal, its just business.
Dear [muppets] clients,
I'm sorry, I fucked up. On a brighter side, some day it will go up and we will be long then. Until then, just view this as a short term bump in the road where we give money to others before we get it back [hopefully]. Regards, TS
http://vegasxau.blogspot.com
' We closed the recommendation yesterday with a potential negative return of -2.1%. '
Beautiful use of spin. It is not a LOSS its a negative RETURN.
Well sure. There was a return. It was just a shade under 98-cents on the dollar. Just another day on the set of the Muppet Show.
oops, whats the comission on that?