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World Markets React To Turkey's 425bps Rate Hike

Tyler Durden's picture


Judging by the reaction from SocGen and JPY crosses (and thus global equity markets), the Turkish Central Bank's decision - to tighten aka ubertaper - has solved all the tapering, tantruming, turmoiling problems in markets. TRY obviously dumped on the news (now at 2.18 -2100 from highs). JPY crosses instantly exploded higher, automatically lifting US (Dow +60) and Japanese (NKY +110) stock futures markets before they closed. Gold fell very modestly ($1). JPY continued to weaken and when markets re-opened, gold dropped further (-$6 at $1250); Dow is now +110 from pre-Turkey, NKY +175pts; S&P futures are up 10points on the news as stops are run to 1800 but the EEM ETF rallied around 1% (only).


TRY is ripping.. these are 2-week lows (or highs for the Lira against the USD)


EEM rallied then faded to a ~1% gain...


JPY was ramped and stocks followed...


Bear in mind that the 1,800 stop witch hunt perfectly tags the closing VWAP from Friday's dump-day - the big question is do we get follow-through...


But the Nikkei can't get enough...


Gold fell modestly on the news... and more when markets reopnened...



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Tue, 01/28/2014 - 19:10 | 4377273 Cojones
Cojones's picture

Inflation, just what Erdogan needs right now.

Tue, 01/28/2014 - 19:15 | 4377301 LawsofPhysics
LawsofPhysics's picture

Indeed, perhaps if the Fed really wants inflation they should tell all their primary dealers to pay 150% interest on all savings accounts.

let me be clear; roll the mother fucking guillotines, nothing changes otherwise.

Tue, 01/28/2014 - 19:34 | 4377364 Looney
Looney's picture

... "roll the mother fucking guillotines"

This is rasiss, homeophobic, and joyfully Schadenfreude. Love it!!!  ;-)



Tue, 01/28/2014 - 19:45 | 4377394 nope-1004
nope-1004's picture

Turkey is a far away country where they speak different from me, so I don't care.  Anyone know when American Idol starts tonight?


Tue, 01/28/2014 - 21:40 | 4377810 asteroids
asteroids's picture

The fucking Turks, as usual, are insane. An instant 8% raise of interest rates of a (supposedly)  developed country  should cause massive disruption. What appears to have happened is that the PANIC button was hit and the ES raised until people could figure things out. Expect things to return to normal shortly and Turkey to fall into the deep deep shit it deserves. If it doesn't, I assure you, there will be massive disruptions.

Tue, 01/28/2014 - 20:05 | 4377482 game theory
game theory's picture

Who has money in savings accounts anymore? 

Tue, 01/28/2014 - 19:16 | 4377305 BoNeSxxx
BoNeSxxx's picture

This market is a carnival freak show... who could trade this happy horseshit?

Tue, 01/28/2014 - 19:19 | 4377315 LawsofPhysics
LawsofPhysics's picture

Anyone with access to certain knowledge and the ability to front-run said freak show.  Confidence around the world in fiat is waning.  I remain long sharcropping and a dependable tribe.

Tue, 01/28/2014 - 19:22 | 4377333 BoNeSxxx
BoNeSxxx's picture

But wouldn't that be cheating?



Tue, 01/28/2014 - 19:22 | 4377337 spastic_colon
spastic_colon's picture

and the knowledge of month-end, SOTU, kill the january effect, bury crappy earnings, and front run tomorrows -10B announcement, no trader without access coulda known / s


gotta keep the show alive

Tue, 01/28/2014 - 19:27 | 4377326 Dr. Engali
Dr. Engali's picture

Actually once you accept the new reality, this is a very easy market to make currency in. The question then becomes what do you do with said currency. Personally I turn the gains into tangibles. The suppression of PMs combined with the levitation of the markets has been very beneficial to my stacks.

Tue, 01/28/2014 - 20:04 | 4377476 NoDebt
NoDebt's picture

"The question then becomes what do you do with said currency."

The central planners have an answer for that, too.  

Cradle to grave, my friend.  Cradle to grave.

If it's any consolation, you'll never be alone.

Tue, 01/28/2014 - 20:04 | 4377479 Freddie
Freddie's picture

He deserves it because he or Turkey is in with the Saudis, Qatar, USA, UK and Israel with the genocide in Syria against innocent Syrians.

Tue, 01/28/2014 - 20:45 | 4377618 Wahooo
Wahooo's picture

Unless you're Iran selling your oil for lira and buying gold with that lira, why does this matter to anyone at all?

Tue, 01/28/2014 - 19:12 | 4377277 AL_SWEARENGEN

Cocksuckers push PM's down.  IT DOESN'T MATTER WHAT THE NEWS IS.  Gold & Silver go down.

Tue, 01/28/2014 - 19:15 | 4377294 camaro68ss
camaro68ss's picture

meh, buy more

Tue, 01/28/2014 - 19:16 | 4377311 AL_SWEARENGEN

1 OZ American Buffalo's are fantastic!!

Tue, 01/28/2014 - 19:16 | 4377309 LawsofPhysics
LawsofPhysics's picture

Personally, I like sales on PMs.

Tue, 01/28/2014 - 22:45 | 4378157 disabledvet
disabledvet's picture

these are entire mines on sale now.

You'll need to hire a very good mining company.

I hear this is a pretty good one:
Down a solid 14% to start the year.

somebody has really done the math here.
a "club we're not in" indeed.
but this ain't no country club.

Wed, 01/29/2014 - 07:53 | 4379090 CoonT
CoonT's picture

I always thought that the problem with miners, is that by the time they are the place to be, they get nationalized. 

Tue, 01/28/2014 - 19:13 | 4377286 NoDebt
NoDebt's picture

See, they got this.  No problem.  I am a convert and now believe deeply in the wisdom and benefits of centralized planning.

Tue, 01/28/2014 - 19:20 | 4377320 BoNeSxxx
BoNeSxxx's picture

I am drinking the Kool-Aid with you NoDebt...

Next time my brain tells me to buy FAZ, I am going to buy Apple and Netflix... Just like that Seinfeld episode where George does the opposite of everything he would normally do.

Let's see how it works out.

Tue, 01/28/2014 - 19:22 | 4377332 NoDebt
NoDebt's picture

Absolutely.  Remember, "it's not a lie if YOU believe it."  (George Costanza)

Tue, 01/28/2014 - 20:17 | 4377488 buzzsaw99
buzzsaw99's picture

ah, the costanza trade. only works if every instinct you ever have is always wrong

fazmobile = betting against the banks by giving money to the, er, banks. kick the tires, take it out for a spin around the block, but you damn sure don't buy it and put it into long term parking.

Wed, 01/29/2014 - 00:23 | 4378556 slightlyskeptical
slightlyskeptical's picture

That only works for betting on football. A wise man told me to take a look at all the games, narrow it down to four, study harder and narrow it down to one. Then bet the other way.

Tue, 01/28/2014 - 19:24 | 4377340 LawsofPhysics
LawsofPhysics's picture

I say the same thing everytime PMs go on sale.

Tue, 01/28/2014 - 19:14 | 4377287 the 300000000th...
the 300000000th percent's picture

Problem solved, dow 18000

Tue, 01/28/2014 - 19:55 | 4377439 Bunga Bunga
Bunga Bunga's picture

Central planner's wet dream.

Tue, 01/28/2014 - 19:13 | 4377288 FieldingMellish
FieldingMellish's picture

Who needs gold now that the massive economy of Turkey is (apparently) saved from destruction.

Tue, 01/28/2014 - 19:44 | 4377397 The Shootist
The Shootist's picture

Turkey has a vibrant gun industry for some reason.

Tue, 01/28/2014 - 19:14 | 4377295 the 300000000th...
the 300000000th percent's picture

All news is AWESOME NEWS!!!!!!!!!!!!!!!!!!!!!!!!!

Tue, 01/28/2014 - 19:15 | 4377296 pragmatic hobo
pragmatic hobo's picture

i thought everything was fixed already ...

Tue, 01/28/2014 - 19:15 | 4377304 FieldingMellish
FieldingMellish's picture

It was and now it is... again!

Tue, 01/28/2014 - 19:20 | 4377325 NoDebt
NoDebt's picture

It's the "Ford" global economy.  If you're even remotely a car-guy you already know what this means.







Thank God for central planning.  Without their wizard-like mechanical skills we could never keep this heap running.  Let's face it, we NEED centralized planning.  It's GOOD for us.  We should all learn to accept it and let go of our foolish free market ideas (and our liberty along with it, because we won't need it any more).  

Tue, 01/28/2014 - 19:23 | 4377335 FieldingMellish
FieldingMellish's picture







Tue, 01/28/2014 - 19:24 | 4377343 NoDebt
NoDebt's picture

Have no fear.  Even if you can't get it to the shop the centralized planners have a tow truck to come to your aid.  It's called a bail out/in.

Tue, 01/28/2014 - 19:26 | 4377345 FieldingMellish
FieldingMellish's picture

More on that from POTUS tonite....

Tue, 01/28/2014 - 19:31 | 4377360 Dr. Engali
Dr. Engali's picture







Tue, 01/28/2014 - 20:22 | 4377535 Snoopy the Economist
Snoopy the Economist's picture

Repeated entry

Tue, 01/28/2014 - 19:55 | 4377440 Miffed Microbio...
Miffed Microbiologist's picture

I thought it stood for:


Which is what the economy has been for us little wage slave serfs for years. Only central planners could envision fixing a putrefying slab of meat this economy has become to a state of a living vibrant animal. We have little to lose now so pull the damn plug please.


Tue, 01/28/2014 - 20:07 | 4377491 Legolas
Legolas's picture

It's the "PONTIAC" global economy.


There, fixed it for ya !


Wed, 01/29/2014 - 09:14 | 4379217 F em all but 6
F em all but 6's picture





Tue, 01/28/2014 - 19:19 | 4377302 Dr. Engali
Dr. Engali's picture

Holy Shiite ! Now all we need is an untaper announcement from the fed and we are off to the races.

Tue, 01/28/2014 - 19:19 | 4377318 fonzannoon
fonzannoon's picture

To me this was all about the Nikkei. It closed below 15k yesterday. They need t o ramp the shit out of it to keep Abe in the game.

Tue, 01/28/2014 - 20:47 | 4377625 Mark123
Mark123's picture

I understand Ade is the only guy left buying $US (other than the Fed with funny money) can't rock that boat!

Tue, 01/28/2014 - 19:29 | 4377359 Silver Garbage Man
Silver Garbage Man's picture

False flag then un taper........we got to save face.

Tue, 01/28/2014 - 19:33 | 4377367 Dr. Engali
Dr. Engali's picture

No the false flag will come when it's time to collapse the markets. We aren't there yet.

Tue, 01/28/2014 - 19:41 | 4377384 Silver Garbage Man
Silver Garbage Man's picture

We could go from here to collapsed markets very quickly.

Tue, 01/28/2014 - 19:45 | 4377402 Dr. Engali
Dr. Engali's picture

When they collapse this market, it will be in nano- seconds, but they will have a reason behind it and a false flag is just the ticket. They don't need a false flag to untaper. They can use any old economic excuse.

Tue, 01/28/2014 - 19:44 | 4377392 Son of Captain Nemo
Son of Captain Nemo's picture

Agreed Doc. But we're getting very F-ing close to the big "C".


Tue, 01/28/2014 - 19:16 | 4377306 The Capitalist ...
The Capitalist Review's picture

The Boom turns to Bust as the interest rates rise, the cost of production price signals were lies. The boom was a binge that's a matter of fact and now it's devalued capital that makes up the slack.

How dare the CBT have more backbone than Mr. Yellen and his predecessors

Someone's getting fired.......

Tue, 01/28/2014 - 19:18 | 4377307 the 300000000th...
the 300000000th percent's picture

no comment, i give up


Tue, 01/28/2014 - 19:19 | 4377317 surf0766
surf0766's picture

How much did it cost the U.S. taxpayer. Because we will soon find out in the coming weeks what the bailout really was.

Tue, 01/28/2014 - 19:24 | 4377339 phijammaslamma
phijammaslamma's picture

During the Asian Financial Crisis in 1997,  almost all the Asian countries were forced to raise interest rates -- Phillipines, Indonesia, Korea, Hong Kong, etc.,  and I remember the immediate reaction was negative as it meant the crisis was getting worse and the countries were going to have to take alot of pain.

I guess the difference now is we have automated trading which buys futures if X moves up or Y moves down?

Tue, 01/28/2014 - 19:31 | 4377362 chump666
chump666's picture

That's right, I have faith in the machines and idiots running the show, so therefor any crisis, like a full blown EM/Asian crisis is nothing.

Tue, 01/28/2014 - 19:28 | 4377354 gwar5
gwar5's picture

Paul Volcker is alive!

Tue, 01/28/2014 - 19:37 | 4377377 lordbyroniv
lordbyroniv's picture

Too many spinnging plates.  No way they manage to keep them all going.

Tue, 01/28/2014 - 19:40 | 4377385 magne13
magne13's picture

And an EM hiking rates like this is good for equities just why? I am so confused, well I guess everyone should raise rates then if stocks are going up now because of higher rates! 

Tue, 01/28/2014 - 19:50 | 4377417 magne13
magne13's picture

So I guess this rally should be faded pre FOMC? Let me check the emini end of month puts 5.00 breakeven 1775 hmm might be a good way to get long after we trade all the way back down there.

Tue, 01/28/2014 - 19:49 | 4377418 magne13
magne13's picture

So I guess this rally should be faded pre FOMC? Let me check the emini end of month puts 5.00 breakeven 1775 hmm might be a good way to get long after we trade all the way back down there.

Tue, 01/28/2014 - 19:43 | 4377389 Fix-ItSilly
Fix-ItSilly's picture

turkey goes the route of Greece - economic tailspin.  Key is if Erdogan is a teflon man.

Syria threatens unrest on Turkey's border. iran economy remains stunted. Iraq is a mess.  Military leadership returns to Egypt.  MOnetary card may collapse Erdogan's house.

Tue, 01/28/2014 - 19:48 | 4377411 Bdelande
Bdelande's picture

Since when do rapidly rising EM interest rates stimulate growth?.............  
Once the quants sort out / reprogram their currency triggered algos...................we crash right back down on Global growth concerns...... 

Tue, 01/28/2014 - 19:50 | 4377422 Yen Cross
Yen Cross's picture

  lmao. This what full retard looks like.  usd/try

  Look at the spread in upper left corner. It was over 100 a little while ago.

Tue, 01/28/2014 - 20:30 | 4377569 walküre
walküre's picture

425 bps higher because the Turkish economy already struggling with the lesser rate is now going gangbusters with the higher rate!

If that's not an invitation to the growing group of Islamists in Turkey which by the way are opposed to usury and any form of monetary manipulation, I don't know what is?

Erdogan, you're toast. May the Islamists take over and first kick out NATO, then join with Russia.

Blame and fault lay fair and square with bankers again.

Tue, 01/28/2014 - 20:40 | 4377600 PowerPlayer
PowerPlayer's picture

If the FOMC tapers tomorrow we'll see the Yen weaken even more.  The only questions is will US equity markets make new highs tomorrow or next week?  

Tue, 01/28/2014 - 20:43 | 4377615 Mark123
Mark123's picture

This move really squeezes Turkish business and people - and for what purpose?  So they can keep the price of imports (oil) down?  Why shoudl they care????  EVERY other government is going nuts trying to destroy the value of their currency. Imagine what you would think if you lived in Turkey!!

The bankers must have been scared that the lira would collapse...and that is not allowed for fiat. 

Tue, 01/28/2014 - 20:57 | 4377669 wiseindian
wiseindian's picture

Yyyyyep... all is well. Surely... says right there on CNBC. 

Man I sure hope gold gets pummeled into the ground. I missed the last round of taper driven fire sale in December and don't want to miss out on this round, even if I do eventually lose it all while boating.

Tue, 01/28/2014 - 21:24 | 4377750 yogibear
yogibear's picture

In the Central Bankster's theater some participants started the curtains on fire.

Tue, 01/28/2014 - 21:37 | 4377792 pudding
pudding's picture

All is well!

Tue, 01/28/2014 - 22:21 | 4378025 chump666
chump666's picture

It means America is recovering.


f*ck me dead

Tue, 01/28/2014 - 23:01 | 4378217 SDRII
SDRII's picture

The IMF just warned Turkey back in October about imbalances, capital flight and policy rates

Basci ushered into the bank with Erdogan circa 2003. He is NOT and MIT man

AKP vs. Gulen fallout?

Wonder how western desks were positioned?


Tue, 01/28/2014 - 23:06 | 4378233 SDRII
SDRII's picture

Erdogan blames interest rate lobby (international) for protests...



Wed, 01/29/2014 - 08:51 | 4379179 drdolittle
drdolittle's picture

Seems easy enough. Go long stawks, flat or short metals. I got pissy after repeatedly trying to short the overextended market. By the time I came to the realization that it's going up mainly by fiat I became sorta scared of the inevitable shearing. They're gonna slam it down and get lots of people. Then they'll roll out hte mandatory contributions to treasury, to protect people from the market.

I'm taking my ball and going home.

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