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Markets Tumble On "Good News" Jobs Report
If ever there was a more sad indication of just what the Fed's liquidity hosepipe of exuberance has done to global capital markets, it is this morning's reaction to a better-than-expected payrolls report. Good news, right? Oh no - not for risk... indicative that a 'taper' may be closer than some hoped, bond yields are blowing higher, stocks are dumping, Gold and Silver are tumbling, and the USD is surging. Still think a 'taper' is priced in? Still think markets reflect anything but the flow of fed money printing? Think again...
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Ima need a couple drinks this morning. "Couple Drinks" - Trailer Park Boys - YouTube
I hope someone calls out the BLS and asks how they reach their conclusion on the number of jobs added.
I picked a bad week to stop sniffing glue.
Hughie Lewis and the News should rewrite their song " All I need (is a couple of days off)" to "All I need is a couple of more drinks"
It was 1 minute before 8:30 when gold began to tumble heavily. How can that be?
The BLS is actually a room full of HFT algos. Next question?
Just a couple of drinks, Randy. Enough to protect me from the shithawks.
This should tell you all you need to know about the market. Even the market participants are aware they invested in a bubble that could blow up if the Fed tapers.
Yes, and they are in a high-stakes prisoner's dilemma. They cannot be the first to the exit door, for fear of losing their morningstar ratings, nor can they afford to be the last to the exit door when the algos go into full-on sell (as that "door" will actually be a window 50+ floors up).
Good thing there is $4.75B - $5.75B going in at 10:30.
Does this mean I can have my old job back? The one where I waste hundreds of dollars worth of ammo so I can lose my job, then my kids ask me why there will be no presents at Christmas this year.
Bullish!, Thanks Mr. Chairwoman
Markets trade on psychology just as they have for hundreds of years. People think fed printing causes higher stock prices so they buy stocks and stock prices go up. Did the fed printing cause higher stock prices? Not directly. It's Psy Ops maneuver.
Think about the actual flow. Fed prints $$ and buys bonds from the primary dealers. Primary dealers previously bought mortgage and US treasury bonds from their issuers. Mortgage bond proceeds went to home buyers who gave the money to home sellers who deposit the cash in the bank. The bank has excess deposits so they give the money back to the Fed. How much money went into stocks? Very little.
We don't have a Fed printing bubble. We have a market psychology bubble.
Kevin Henry disagrees.
Where the hell was he yesterday?
The Primary Dealers are Dealers, they always carry inventory and hedge it (however inefficiently).
Your inflation tax dollars, on the other hand, are being paid to TPTB to finance their extrication from the debt ponzi AT THEIR PROFIT (and your loss), which creates a wake in credit markets, some of which winds up in the equity markets.
Yield. That is all.
We don't have a Fed printing bubble. We have a market psychology bubble.
Yeah...and you don't have syphillis - it's all in your mind.
Nice discount on Gold. So, did anyone notice how Slovenia's banks are comming closer to a pop (bail-in cough cough)?
hedge accordingly bitchez.
im eagerly awaiting h-rat's 1050 word response to the NFP and the implications it has for fed/tapering......any second now. actually, it should have been posted at 7:32. whats taking so long?????
Would someone just tell me what to do?
Use Chris Farley as ur guide... Thats what I'm going to do...
What does your gut tell you? Do that opposite of what your gut tells you, then sit and ponder for a few hours, and do what you originally were going to do, but before you do that, think long and hard about what you should do.
Does that clear it up?
Don't worry... by this afternoon, the algos will fix it.
Looks like they fixed it before the open.
Pathetic, absolutely pathetic.
DavidC
http://www.reuters.com/article/2013/11/05/column-markets-saft-idUSL2N0IP1QW20131105
The QE deflation puzzle
Tue Nov 5, 2013 3:00pm EST
By James Saft
Nov 5 (Reuters) - When it comes to creating inflation, bond buying by central banks may actually ultimately be counterproductive.
Called quantitative easing, it continues to be a mainstay of the policy reaction to the ongoing economic malaise. Yet here we are five years later and the evidence that QE can kindle inflation, much less revive the economy, is decidedly mixed.
In part that may be because everyone realizes that QE isn't forever: ultimately the bonds the bank buys will have to be repaid. It is also true - and here we can consider the remarkable valuations of Twitter and Pinterest - that QE causes bad investments, which ultimately must be deflationary.
With U.S. inflation rising just 1.2 percent year on year in September, well below the Fed's 2.0 percent target, bond buying by the Federal Reserve will continue - a bit like the old joke about beatings carrying on until morale improves.
Very radical increases in bond buying in Japan under Abenomics - more or less a pledge to buy and buy assets until inflation reaches 2 percent - has also had only mixed success so far, with core inflation flat in the year to September. That this, the first time Japan core inflation hasn't fallen outright since the end of 2008, is seen as a victory is itself a bit of an indictment of extraordinary monetary policy.
Dangerously falling inflation in the euro zone has prompted calls for the ECB to join in the bond buying, despite its signal lack of success elsewhere. The ECB is arguably already engaging in QE as its program of providing long-term financing to banks often leads to banks buying government bonds themselves.
So, QE everywhere, and everywhere unsatisfactory inflation and at least the threat of falling prices. Could there be a relationship? Part of the failure of QE may be explained by the fact that as a percent of broader money supply the amounts involved are small. Banks must lend and businesses invest or QE will be swamped.
In some ways, all of the inflationary effects of QE are short-lasting and liable to reversed. Not only is everyone involved aware that ultimately the bonds are not being bought and burned, but bought and held, and thus must be repaid or will be sold by central banks.
Also, QE encourages private investors to gamble a bit, perhaps leading to poor choices.
"Unproductive investment is by nature ultimately deflationary," Michaela Marcussen, global head of economics at Societe Generale, wrote in a note to clients. "This is a point also worth recalling when investing in paper assets fueled by QE liquidity and not underpinned by sustainable economic growth."
Deflation is a fucking myth as no society/currency has ever collapsed/died because their purchasing power was too strong.
With 7+ billion people (and growing) competing for a better quality of life, there is plenty of demand (and growing) for all kinds of real assets, commodities, and energy. "Dangerously falling inflation in the euro zone" - LMFAO!!!! What's the cost of living in most EZ countries again? Fucking morons.
"...the bonds are not being bought and burned, but bought and held, and thus must be repaid or will be sold by central banks."
I'm calling shenanigans on that. I'd be shocked if ANY significant amount of the newly created debt/toilet paper/magical illusionary money is ever moved off the FEDs balance sheet. Those Monopoly "money", imaginary debt obligaitions are being held to term on the FEDs balance sheet.
Isn't it easier to service debt with a cheaper dollar? LOLOLOL
Although the Fed is trapped......the motherfuckers were able to catch Gold in the same trap......and unfortunately Gold is going to be shaken out before The Fed.
Use the dollar strength to ur advantage... nothing has changed... When the Data points to taper on...and they still don't taper, you be gladed you used those stronger dollars to purchase real assets...
paper or physical? All of my ounces are still there (with absolutely no counterparty risk).
Please, when fraud is the status quo, possession is the law.
Believe me I'm with you in physical. However I have tough time when everyone says this is a good thing......perhaps it's because I'm all in, but 100,000 @ $1500 doesn't buy as much as 100,000 @ $1000......plus there is That little issue of fraud and manipulation that really pissed me off more than $ and ¢
Tylers, please don't even THINK about buying into any "tapering" nonsense this time around. The fact that the threat of it will be used to jawbone the "markets" does not at all equate to ZH having to buy into it ever actually happening.
Going forward, QE will only be increased, not diminished. I mean, how else they gonna keep the global Weekend at Bernie's going?
bingo.
I'm laughing because the massive beat FUBAR's 0bama's & the media's plans to blame the low number on the shutdown & thus the GOP.
[irony] With the economy so good then they must be about to raise interest rates? [/irony]
Global Governence, NWO or whatever fancy Psyche Warfare/PsyOp lingo The Global Criminal Oligarch Cabal Bankster Intelligence Crime Syndicate would like to use is all identical to them. The goal all done by design & all done by Agenda is Centralized Power of the Worlds Governments with vertically integrated Global Economies owned & controlled by them.
A New World Order or New World Banking Order for The Global Criminal Oligarch Cabal Banking Intelligece Crime Sydicate. Next stop, Serfdom in a Totalitrian Authoritarian Global Fascist Police State Dictatorship.
Nurse Ratchett? Nurse Ratchett! Yes, I'll take that lobotomy right now, if you please. What? No, without the anasthetics, I'll be just fine.
whats the market worried about? they can keep uncounting people for a long long time.
dont worry, equities will be green any second now.
bad jobs report= market spikes
good jobs report= market spikes
everything is bullish on this planet,
All this means is we've gone from BTFATH to BTFD. Any talk of tapering is ridiculous.
I concur Doctor. This slight dip has been perfectly orchestrated to encourage a big BTFD rally. No one, including Kevin Henry and everyone else who has access to millions of FDIC insured margin and a Buy button, believes these numbers nor do they believe the numbers will lead to taper. Taper will not end voluntarily. If we could get people to accept that, then we could move to a conversation about what will cause it to end involuntarily.
Gold's on sale.
So...gold's on sale again....keep stacking.
If you want to see the markets collapse, get a job.
Gold is being creamed so hard, I think need a drink. What a way to end Friday.
Lol, guess what happened at 9pm Beijing time? See former post for details, but several VERY LARGE chunks of cash just made their way onto the short side. Based on the 2 banks I monitor, it's about 4~5 billion that vested today. This shit's gotten pretty damned easy after figuring it out.