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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 linniepar
linniepar'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 !!

Thu, 04/24/2014 - 10:19 | 4690467 Bastiat
Bastiat's picture

Had the same thought.

Thu, 04/24/2014 - 10:32 | 4690510 MillionDollarBoner_
MillionDollarBoner_'s picture

My feeling is that all the smashdowns of the past months were preparatory to this explosive move up. After all, proper manipulation demands pre-emptive action.

Whether this is the beginning of the big move up is hard to say. Its already been caught so its not really that strong.

Nonetheless, the big move up is coming and it can't be too far off now. Shit is getting real in Ukraine...

Thu, 04/24/2014 - 11:03 | 4690593 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Yep gotta increase the value of the gold and silver when the faith in the paper is lost to keep the mercenaries and controlled puppets fighting to keep the empire alive. Take their coin and refuse to fight. The mercenaries will stop marching real quickly once the paychecks get light. Hell take their precious and pay them off to turn against the beast...

It is all just forms of idoltry anyways just like believing pieces of paper and weapons alone are guarantors of freedom and rights. It is a very Unchristian deception fostered on people,

Thu, 04/24/2014 - 10:40 | 4690553 Ban KKiller
Ban KKiller's picture

And the price of lead?

Death to fascist pigs. Know any oinkers? "Animal Farm" is here to stay...now that they can run computers. 

Thu, 04/24/2014 - 10:46 | 4690581 I am a Man I am...
I am a Man I am Forty's picture

Where is Reggie "I've been bearish on Apple since $200/share" Middleton???  Need his opinion on Apple's gross margin INCREASE.  Apple's up 8% today.  Also need his opinion on how he got it so wrong.

Don't let him bullshit you into believing he picked the top at $700/share, he's been negative since $200/share.

 

Thu, 04/24/2014 - 10:49 | 4690591 orangegeek
orangegeek's picture

spot gold still within a bear channel

 

http://bullandbearmash.com/chart/spot-gold-daily-stalling-support-sidewa...

 

a stronger USD may push gold lower, but for now, it's  holding

Thu, 04/24/2014 - 12:03 | 4690625 Spungo
Spungo's picture

why the hell does JPY ever go up?

(nevermind, already answered in thread) 

Thu, 04/24/2014 - 11:17 | 4690710 SheepDog-One
SheepDog-One's picture

Stawks tumbling, well into the green. Yea whatever...Shit Show.

Thu, 04/24/2014 - 11:17 | 4690712 TalkToLind
TalkToLind's picture

My truck doesn't even beep anymore when I back it up.  I just quietly BTFDs, then I wait for an annoyed courier to deliver a small yet extremely heavy package.

PS, if the courier ever asks what happened to the machine I was building with all of those "machine parts", I will tell her I lost it in a boating accident. 

Thu, 04/24/2014 - 12:02 | 4690914 SubjectivObject
SubjectivObject's picture

Transformers, tell'em they're transformers (heavy iron and copper thingies that go in electrical equipments).

Thu, 04/24/2014 - 12:06 | 4690934 SubjectivObject
SubjectivObject's picture

Seems apparent to me that there's a Fed mandated algo that unloads sells if there is any daily price action approaching 2% of that day's lows.

Thu, 04/24/2014 - 12:36 | 4691062 hangemhigh77
hangemhigh77's picture

No need for guns when you can crash the whole US economy by destroying the dollar in about hmmmmmmm, a day maybe.  Might as well do it then the banksters can feel the pain.  The rest of us have nothing leftto lose so WELCOME TO THE PARTY YOU BANKSTER BITCHEZ.  Soon we'll really get the party started and start hanging your worthless asses for treason right next to your politician buddy.

Thu, 04/24/2014 - 13:49 | 4691473 Manipuflation
Manipuflation's picture

That's one hell of a swing.  Where is Jon Nadler to explain?  Wow somebody's asshole really hurts right now.  Friends ask me how I trade the precious metals markets.  I tell them that I don't and not to get involved with electronic trading.(exhibit A from Tyler above)  Stacking is what you want to do I tell them but only a few have.

Realistically though, I have been a part of the PM markets for 15 years now.  I've never been a market maker.LOL  I've watched PM prices for all of those years though.  I have studied economics as you all have.  I have never been beaten on a silver purchase.  I still never have been beaten but I am sitting $34 some an ounce silver at the moment.  Ooops.  Oh well, at least I have more $7 an ounce silver to make up for it. 

I have not taken a loss though because I have not sold the silver.  That's the key to playing PMs and taking physical into possession.  Anyone who dares trade ETF's and derivitives on PMs is a gambler.  I know I am preaching to choir here in some regards but there are new people on this board who need to know.  All the same, it still bears mentioning that the PM markets have been rangebound for over a year now.  Remember, I have been at this for a while. 

You can always expect wicked volatility in the PM markets.  I won't be the first to say this but the PM market is seriously fucked up.  The "market" has nothing to do with the metal itself.  It has nothing to do with supply and demand.  PM's are a commodity am I correct?  Yes, I am.  If you bid on pork bellys and call it would you get delivery?  Yes, you would.  If you bid in silver or gold and call it would you get delivery?  That would depend... and probably create a series of investigations by the .gov.  Who knows, you might want to start your own nation and are therefore a terrorist.  We can't have any of that because you need to put money into the crock market.  Invest in Facebook and margin call it.  What do you get for that?  A roll of toilet paper?  That's really the problem, you should not be able to trade things that you don't actually possess or things that do not exist.  It's a fucking dreamworld and I am not in it.  As long as this shit continues, we will never arrive a at a market price.

By all means of any economic theory I have read, quantitive easing SHOULD have caused a rise in the price of gold and silver.  Instead, we saw a fairly steep decrease in PM prices.  How the fuck does that work?  I am to believe that physical gold and silver are so liquid that they can flow into stocks and bonds?  I call bullshit just as all of you do.

I can see that I am getting worked up into a froth and it is too early in the day for that.  No one really knows the price of gold or silver compared to a dollar or a euro or any other scrip.  Keep stacking.  That makes the other fuckers nervous.

"If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered."

Thu, 04/24/2014 - 14:24 | 4691726 wiseindian
wiseindian's picture

Admittedly there was a $20+ move in gold today but I would hardly refer to a $7 something gain in gold as "smashed higher" unless the article was referring to the move from the earlier "smashed lower" this morning.  I mean a net gain today of ...0.6% ? The "stock" markets do that on a regular basis.

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