Bonds, Gold, And Yen Smash Higher As Stocks Tumble

Tyler Durden's picture




 

Well that escalated quickly...

 

USDJPY is collapsing...

 

Gold and silver are well bid

 

and Bond yields are tumbling

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Thu, 04/24/2014 - 09:54 | 4690347 Charles Nelson ...
Charles Nelson Reilly's picture

no Ron Burgandy clip?

Thu, 04/24/2014 - 09:55 | 4690352 Harlequin001
Harlequin001's picture

Yen???? WTF...

'Cos the yen's just 'valuable' isn't it, not...

Thu, 04/24/2014 - 10:04 | 4690407 Spitzer
Spitzer's picture

Carry trade unwind.

Tyler can you explain this ?

Thu, 04/24/2014 - 10:10 | 4690434 SoberOne
SoberOne's picture

BREAKING NEWS: Russia annexes Crimea region.

 

/$

Thu, 04/24/2014 - 10:15 | 4690452 SoilMyselfRotten
SoilMyselfRotten's picture

Roller Coaster....of love. Say what??

Thu, 04/24/2014 - 10:19 | 4690466 viahj
viahj's picture

well, isn't this mighty convenient for todays $29b 7yr autcion?

Thu, 04/24/2014 - 10:38 | 4690544 Occident Mortal
Occident Mortal's picture

Hmmm, only Russian markets are supposed to go down.

 

Isn't that what Obama has been promising?

 

 

The costs are supposed to be over there ->

Thu, 04/24/2014 - 10:25 | 4690469 Dr. Engali
Dr. Engali's picture

The Yen carry trade is when traders borrow for free from Japan and then use that money to buy treasuries which they can book the spread and use them for collateral to lever up and buy more stocks. Typically they will sell Yen and buy USD to buy risk assets. This works fine as long as the USD/Yen stays within a certain range. If something happens and that forces a risk off deleveraging ( think margin calls) then traders are forced to buy Yen in order to pay back the debt.  The buying of Yen and selling of dollars causes the Yen strength.

 

Hope this helps. 

Thu, 04/24/2014 - 10:35 | 4690531 Old Man River
Old Man River's picture

When it comes to money and all that, I'm about as bad off as a rubber-nosed woodpecker in a petrified forest. Thank you kindly, Doctor. This helps.

Thu, 04/24/2014 - 10:44 | 4690570 Dr. Engali
Dr. Engali's picture

Glad I could help. I like your analogy. I've never heard it before, and if you don't mind I'll be borrowing that..... well I'll borrow it even if you do mind ;->

Thu, 04/24/2014 - 12:47 | 4691098 debtor of last ...
debtor of last resort's picture

And buy stocks with it?

Thu, 04/24/2014 - 14:02 | 4691574 PAWNMAN
PAWNMAN's picture

How about this one.....As nervous as a long tail cat in a room full of rocking chairs.

Thu, 04/24/2014 - 14:58 | 4691940 motorollin
motorollin's picture

Thank you for this.

Thu, 04/24/2014 - 10:05 | 4690408 Arius
Arius's picture

i am really scared now ... please Doctor Evil ... please

Thu, 04/24/2014 - 09:56 | 4690355 rfaze
rfaze's picture

You should find a "safe house".......

Thu, 04/24/2014 - 10:22 | 4690481 Flux
Flux's picture

It sure as hell aint gold, lol! Well, not yet anyway.

In the meantime, stocks, bonds and REITs will serve you well.

Bank on it.

 

Thu, 04/24/2014 - 10:33 | 4690513 MeMongo
MeMongo's picture

Kinda suprised you didn't mention bitcoin too flux, I mean fonestar er uh MDB:-)

Thu, 04/24/2014 - 10:53 | 4690617 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Don't feed the libtard troll!!

Thu, 04/24/2014 - 09:57 | 4690364 Charles Nelson ...
Charles Nelson Reilly's picture

oooops, there it is!  

maybe a selfie of Obama & Biden will reverse the carry trade in the right direction.

Thu, 04/24/2014 - 09:58 | 4690376 Cangaroo.TNT
Cangaroo.TNT's picture

I couldn't find it on YT, but lately it seems the following would more appropriate:

All I know is, finally I get to kill somebody

Thu, 04/24/2014 - 09:54 | 4690348 Kreditanstalt
Kreditanstalt's picture

Nope...back to Truman Show-as-usual...(hic!) (Burp...YAWNNNN...!0

Thu, 04/24/2014 - 10:10 | 4690435 Oh regional Indian
Oh regional Indian's picture

I just realized, reading your comment, what a master stroke it was to call it the "True Man Show"....because of course it was anything but....

Thu, 04/24/2014 - 09:56 | 4690359 Randy Goodnight
Randy Goodnight's picture

Gold bitchezzzz!!!

Thu, 04/24/2014 - 09:57 | 4690365 Comte d'herblay
Comte d'herblay's picture

JBTFD

JSTFS

Thu, 04/24/2014 - 09:57 | 4690366 Super Broccoli
Super Broccoli's picture

why the fuck would investors buy yen when they're scared ?

Thu, 04/24/2014 - 10:01 | 4690388 Spitzer
Spitzer's picture

Unwind carry trade. ... Someone who is an expert can explain.

Thu, 04/24/2014 - 10:27 | 4690451 Oh regional Indian
Oh regional Indian's picture

Carry trade is borrowing a cheap currency at low interest rates, and investing overseas in higher yield instruments.

The bet you make is that the borrowed currency remains weaker than the invested one.

If that changes, it is called an unwind as everyone tries to buy (in this case Yen) to close out their positions.

The carry trade unwind is what WILL be the trigger of the coRRapse....

The low interest loans a la Japan are obviously only available to high risk hedgie types or crony speculators or the super well conected.

ori

Thu, 04/24/2014 - 10:55 | 4690624 disabledvet
disabledvet's picture

THIS is the carry trade.

It's all about high yield being something other than total crap (high yield for a reason) and "hedging" the currency risk. (in this case the world's most indebted economy...Japan.)

The Japanese are wisely in my view seeing this as an opportunity to buy up as many dollars denominated and dollar producing assets as possible...but with no recovery in sight interest rates in the USA could suddenly compressed...and that would make this seemingly straightforward "personal ATM" become a widow maker.

The Fed has forced everyone into struggling to find any alternative to treasuries.

one of those alternatives is unfortunately outright default...and we are now seeing the bankruptcies that are usually precursors to such an existential reality.

The Banks are simply not lending into this "thing." It would appear they're pushing for default here actually.

Thu, 04/24/2014 - 11:27 | 4690636 Flakmeister
Flakmeister's picture

Hardly....

Here are USD margin rates

http://www.tradingdirect.com/?gclid=COe9iJOw-b0CFe99Ogod4zwAWQ

A million dollars ain't what it once was....

Moreover, things like the Yen Carry trade  are how markets work, whether you like it or not... Cross currency interest rate arbitrage is a very old game...

The only real problem is that tax rate for unproductive behaviour of this kind is too low.....

Thu, 04/24/2014 - 10:02 | 4690395 NotApplicable
NotApplicable's picture

Unwinding a carry-trade?

Thu, 04/24/2014 - 10:03 | 4690400 MFL8240
MFL8240's picture

They don't the criminals just wants you to buy Yen so they manipualte the market to suck unsuspecting people into the wrong side of a trade!

Thu, 04/24/2014 - 09:58 | 4690369 buzzsaw99
buzzsaw99's picture

What is this Mickey Mouse shit? What in the name of Jesus H. Christ are you animals doing in my head? Why is Private Pyle out of his bunk after lights-out? Why is Private Pyle holding that weapon? Why aren't you stomping Private Pyle's guts out? [/fmj]

Thu, 04/24/2014 - 09:58 | 4690371 Spitzer
Spitzer's picture

Gold will shine when bonds start falling on this kind of news. Not rising.

Thu, 04/24/2014 - 10:00 | 4690372 Dr. Engali
Dr. Engali's picture

War is bullish fro the MIC..... BTFD.

Thu, 04/24/2014 - 09:58 | 4690375 jubber
jubber's picture

S&P is of course UP!

Thu, 04/24/2014 - 10:00 | 4690379 Kreditanstalt
Kreditanstalt's picture

Aaannnnndd......WE HAVE LIFTOFF!  Back to green!   

Thu, 04/24/2014 - 10:00 | 4690380 sunny
sunny's picture

Thu, 04/24/2014 - 10:00 | 4690382 Kreditanstalt
Kreditanstalt's picture

Nothing will change until the first DIVIDEND CUTS.

Thu, 04/24/2014 - 10:01 | 4690386 The Axe
The Axe's picture

That shit was scary....LNKD and its brothers   monkey hammered...no buyers....Where is all the liquidity that HFT provides....???????   

Thu, 04/24/2014 - 10:02 | 4690397 Ignorance is bliss
Ignorance is bliss's picture

The grand cardinal cross strikes. How funny that the greatest astrological event in memory coincides with the beginning of WWIII. Better get real money while you can.

Thu, 04/24/2014 - 10:18 | 4690460 ParkAveFlasher
ParkAveFlasher's picture

Actually, the real pioneers of the GCC are emerging with power through grace.  The under-developed natives are translating the energy into hostility, and suffering themselves for it.

Thu, 04/24/2014 - 10:02 | 4690398 Hulk
Hulk's picture

Damn those fucking manipulators, just who the fuck is buying so much gold in a thinly traded market ???

Thu, 04/24/2014 - 10:11 | 4690401 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

off topic

http://www.washingtonpost.com/politics/probe-dhs-watchdog-cozy-with-offi...

Probe: DHS watchdog cozy with officials, altered reports as he sought top job

The top watchdog for the Department of Homeland Security altered and delayed investigations at the request of senior administration officials, compromising his independent role as an inspector general, according to a new report from a Senate oversight panel.

Charles K. Edwards, who served as acting DHS inspector general from 2011 through 2013, routinely shared drinks and dinner with department leaders and gave them inside information about the timing and findings of investigations, according to the report from an oversight panel of the Homeland Security and Government Operations Committee.

A year-long bipartisan investigation by the panel also found that Edwards improperly relied on the advice of top political advisers to then-Homeland Security Secretary Janet Napolitano and acquiesced to their suggestions about the wording and timing of three separate reports.

The Washington Post obtained an advance copy of the Senate document, which will be released to the public Thursday.

Edwards’s actions occurred while he was seeking President Obama’s nomination to be the permanent inspector general overseeing DHS, the third-largest government agency, with a $39 billion budget and more than 225,000 employees.

...

Anyone who thinks these problems will be fixed from the inside and just put the other guy/team in and they will make it all better needs to have their heads fixed. Unless you first cut the puppet master's strings nothing changes.

Smaller government attached to puppet strings is still a controlled puppet....

Thu, 04/24/2014 - 10:04 | 4690409 Dr. Engali
Dr. Engali's picture

Gold up in the face of global conflict? Who in their right mind would want such a barbaric relic?

Thu, 04/24/2014 - 10:09 | 4690429 Hindenburg...Oh Man
Hindenburg...Oh Man's picture

This shit is getting real.

Thu, 04/24/2014 - 10:34 | 4690524 Flux
Flux's picture

Sigh ...

You are all so gullible.

Thu, 04/24/2014 - 10:51 | 4690606 Charles Nelson ...
Charles Nelson Reilly's picture

you've added quite a bit to the conversation today!

sigh..... YOU ARE SUCH AN ASSHOLE!

Thu, 04/24/2014 - 11:31 | 4690763 F.A. Hayek
F.A. Hayek's picture

3 months as a member before starting to post must be the goal of the troll handlers so their minions can have a little 'street cred'.

Thu, 04/24/2014 - 10:14 | 4690447 Longarm
Longarm's picture

Welcome to the jungle, we got fun 'n' games
We got everything you want, honey we know the names
We are the people that you find, whatever you may need
If you got the money, honey we got your disease

In the jungle, welcome to the jungle
Watch it bring you to your kn-kn-knees, knees
I'm wanna watch you bleed..........

Thu, 04/24/2014 - 10:15 | 4690449 Fast Twitch
Fast Twitch's picture

Was that just a financial warfare shot across our bow...?

BITCHEZ !!

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