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These EM Currencies Did Not Get The "Taper Is Priced In" Memo

Tyler Durden's picture




 

As equity markets around the world try valiantly to hold on to yesterday's manufactured gains that 'proved' the Taper is a good thing, few have commented on the consequences that are already being felt. Emerging Market currencies were broadly pummeled overnight with Indonesia's Rupiah tumbling to 5 years lows and the Turkish Lira collapsing 1.9% in the last 2 days (its biggest drop in 4 months) to an all-time low.

  • *LIRA AT LOWEST VS USD ON CLOSING BASIS SINCE AT LEAST 1981
  • *TURKEY CENTRAL BANK TO SELL MINIMUM $50M FOR LIRAS TOMORROW

The Istanbul stock exchange is down 7.3% in the last 3 days (biggest drop in 6 months).

 

EM FX markets are not happy about the taper...

 

With the Lira breaking to a new record low against the USD (and EUR).

  • *LIRA AT LOWEST VS USD ON CLOSING BASIS SINCE AT LEAST 1981
  • *TURKEY CENTRAL BANK TO SELL MINIMUM $50M FOR LIRAS TOMORROW

So when does the Turkish central bank run out of USD?

 

with the Turkish stock index down over 7% in the last 3 days...

 

Charts: Bloomberg

 

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Thu, 12/19/2013 - 11:29 | 4260670 LawsofPhysics
LawsofPhysics's picture

Hhmmm, what if these entities want to "run out of U.S. dollars"?

hedge accordingly.

Thu, 12/19/2013 - 11:34 | 4260689 whatsinaname
whatsinaname's picture

So are the Indians going to lower gold duties again if that diplomat lady is not released ? I dont trust their politicians. That lady is tied to a (almost) free apartment in Bombay she got thanks to her father who was a bigwig Secretary for a Housing board in her home state.

Thu, 12/19/2013 - 11:37 | 4260702 Ying-Yang
Ying-Yang's picture

But it was a Tiny Taper.... really!

(that's what she said)

Thu, 12/19/2013 - 11:40 | 4260708 nope-1004
nope-1004's picture

That's what these nations get by aligning themselves with the evil empire.  Global financial war being played out here.

The quicker they all work around US fed lies and manipulation, the quicker they will prosper.

USD in time will be toast.

Thu, 12/19/2013 - 12:28 | 4260888 disabledvet
disabledvet's picture

The Fed's "Stewie Moment" has arrived!

Thu, 12/19/2013 - 11:35 | 4260692 Popo
Popo's picture

Taper or no taper, EM's are due for a very large and very painful correction.  Global demand is down, household credit in EM's is maxed out,  and the party is coming to a close anyway.    Add to that, rising political uncertainties across emerging markets and currencies that are too high to sustain exports -- and it's pretty clear there's a bloodbath coming in EM FX. 

Thu, 12/19/2013 - 13:03 | 4260984 ZH Snob
ZH Snob's picture

these EMs have to learn to keep up.  our beloved leaders have spiked the kool-aid.  life is good again.

Thu, 12/19/2013 - 11:34 | 4260687 alien-IQ
alien-IQ's picture

The beatings will continue until morale improves.

Thu, 12/19/2013 - 11:58 | 4260754 Sudden Debt
Sudden Debt's picture

The Turks don't beat people... they just ask questions while you're hanged in a Palestinian way...

 

It's actually also the favorite of the US army where they first hose you down with cold water while you're stripped naked, than they throw you on a cold concrete floor for a day and than they hang you for a few hours and after that they start throwing you arround like a rag doll while they ask questions while playing with your testicles. It may sound pleasant and sure there's people who actually pay for that kind of sick shit but for most common people it's not fun.

 

Thu, 12/19/2013 - 12:10 | 4260823 disabledvet
disabledvet's picture

Um, we do have a world currency (see Doc's comment below) and "the USA is now turning over all the data for mass production techniques of the Aegis Class missile destroyers and cruisers to the Royal Navy" as Felix Leiter pays MI5 a visit to discuss "meta data pooling."

Thu, 12/19/2013 - 11:32 | 4260688 Dr. Engali
Dr. Engali's picture

Damn if only we had a world currency......

Thu, 12/19/2013 - 11:53 | 4260756 slotmouth
slotmouth's picture

SDRs bitchez.

Thu, 12/19/2013 - 12:06 | 4260797 fonestar
fonestar's picture

We do.

Thu, 12/19/2013 - 12:19 | 4260841 Dr. Engali
Dr. Engali's picture

Bitcoin is not going to be a major global currency in a world were most people can't figure out how to program their DVR.

Thu, 12/19/2013 - 12:23 | 4260868 fonestar
fonestar's picture

Bitcoin's success does not depend on "most people".  If 0.01% of the world keeps buying more Bitcoin, the price goes up.  And "most people" are not as far behind technically as the citizens of the United States are.

Thu, 12/19/2013 - 12:33 | 4260897 disabledvet
disabledvet's picture

FOOOOOOOONESTARRRRRRRRR!!!!!!!!!

Thu, 12/19/2013 - 13:28 | 4261063 Duke of Earl
Duke of Earl's picture

They can't program it, but everyone owns one.

Thu, 12/19/2013 - 11:35 | 4260693 FieldingMellish
FieldingMellish's picture

The USD is moving into a bull market. MillionDollarBonus was correct.

Thu, 12/19/2013 - 11:38 | 4260717 LawsofPhysics
LawsofPhysics's picture

Good for any dollar holders, well at least as long as the existing debt can be serviced and the future liabilities/budget can be funded...

Thu, 12/19/2013 - 11:49 | 4260753 orangegeek
orangegeek's picture

USD monthly shows that USD is still has a way to go before breaking out, but yes, USD should eventually head sharply higher

 

http://bullandbearmash.com/chart/dollar-monthly-closes-remains-bull-chan...

Thu, 12/19/2013 - 11:59 | 4260778 semperfi
semperfi's picture

vs what?  Gold?

Thu, 12/19/2013 - 12:05 | 4260793 FieldingMellish
FieldingMellish's picture

vs everything.

Thu, 12/19/2013 - 11:42 | 4260728 NIHILIST CIPHER
NIHILIST CIPHER's picture

Doc E          "Damn if we only had a world currency".................in the words of Isaac Hayes........shut yo mouth. That has serfdom written all over it.

Thu, 12/19/2013 - 11:46 | 4260735 Dr. Engali
Dr. Engali's picture

You know that's where they are taking us. We are just one crisis away.

Thu, 12/19/2013 - 11:55 | 4260763 AvoidingTaxation
AvoidingTaxation's picture

Got gold? You can go everywhere with some jewellery on you, and exchange it with the local currency.

Thu, 12/19/2013 - 11:46 | 4260732 Sudden Debt
Sudden Debt's picture

Damn... I was just planning on investing in that stable country where the muslim brotherhood is gaining power...

to bad...

 

Thu, 12/19/2013 - 12:35 | 4260914 disabledvet
disabledvet's picture

How is Antwerp doing these days anyways?

Thu, 12/19/2013 - 11:48 | 4260741 virgilcaine
virgilcaine's picture

Bitcoin looks relatively stable compared to EM's and Stawks.

Thu, 12/19/2013 - 11:59 | 4260776 semperfi
semperfi's picture

I have some tulips for sale if you are interested.

Thu, 12/19/2013 - 12:08 | 4260814 fonestar
fonestar's picture

Because comparing flowers to a global currency makes a lot of sense (to idiots).

Thu, 12/19/2013 - 13:28 | 4261070 semperfi
semperfi's picture

yet another sucker player in the latest casino craze called 'bitcoin'

Thu, 12/19/2013 - 11:46 | 4260743 Sudden Debt
Sudden Debt's picture

I just received a mail that promisses a 25 euro discount if I buy 100 euro's of litecoins :)

 

MOVE OVER BITCOIN, THE NEXT SCAM IS IN TOWN!!

Thu, 12/19/2013 - 12:34 | 4260908 disabledvet
disabledvet's picture

(Cue six billion dollar man theme) "we can make it better, faster, strong. We have the technology."

Thu, 12/19/2013 - 11:55 | 4260768 semperfi
semperfi's picture

Awesome! The faster we fuck up other countries the faster they will drop the $US and the faster the fucking Wall St + D.C. Crime Syndicate will be relegated to the dustbin of history.

Thu, 12/19/2013 - 11:57 | 4260777 Iam Yue2
Iam Yue2's picture

There is a silver lining. Collapsing currencies will make them more competitive, whilst whacking EUR, GBP and USD exports to EMs

http://www.fxweek.com/fx-week/opinion/2304244/em-sell-off-will-have-last...

Thu, 12/19/2013 - 12:12 | 4260827 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Don't worry. This is all de-coupled from developed markets, which are paragons of fakeness.

Shhhhh.

Anyhow, let's trot out the decouple meme again!

Thu, 12/19/2013 - 12:16 | 4260834 DOT
DOT's picture

No worries about "running out of dollars". If neccessary a few pallets of those handsome new $100s will be "unaccounted for" at Incerlik.

Thu, 12/19/2013 - 12:18 | 4260848 Iam Yue2
Iam Yue2's picture

Sssshhh, there is also the small matter of the Turkish corruption raids to consider (if one was that way inclined)....

http://www.bbc.co.uk/news/world-europe-25446668

Thu, 12/19/2013 - 13:10 | 4260996 czarangelus
czarangelus's picture

Doesn't make any sense that less mismanaged currencies would fall post-tapir. Is this some fancy way of the US sacrificing its periphery satraps to keep its head above water?

Thu, 12/19/2013 - 13:22 | 4261039 virgilcaine
virgilcaine's picture

The Btc fever is still going strong!

Thu, 12/19/2013 - 14:41 | 4261322 hugovanderbubble
hugovanderbubble's picture

Thanks Tyler, Have a nice Xmas Season all ZH team,

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