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Equity Melt Up Accelerates; Bonds Also Bid

Tyler Durden's picture




 

The melt up is accelerating and with the momentum tailwind back, newsflow is once again irrelevant: any news that is even remotely good is trumpeted, and any bad news - such as Europe's right storm rising in the northern states, and left storm surge in the states that demand more handouts from the northern states or China sinking a Vietnamese boat, the most serious bilateral incident since 2007 - are once again (and as usual) nothing more than a catalyst for hope for even more liquidity injections. End result: the S&P futures this morning are 5 points above Goldman's year end target of 1900 and 45 points away from its June 30, 2015 target. Can this breakneck scramble on zero volume continue until Grantham's bubble peak level of 2,200 is hit? Well of course: after all anything goes in the centrally-planned new normal.

To be sure, this is an equity only phenomenon: moments ago the Bund future hit its highest level since May 19, while the 10 Year remains unchanged at 2.53% as it continues to price in the new "deflationary" (and Japanese) normal. And as has been the case during all such divergences of late, either bonds or equities are making a horrible mistake: the question remains: who? Since all equities are doing is tracking FX pairs to the pip and have completely forgotten all about fundamentals, we have a pretty good idea what the answer is.

In Asia, Chinese stocks are lagging (SHCOMP -0.3%) following the announcement of an equity offering from a large state-owned construction firm which is adding to concerns that a number of state-owned banks and industrials will soon be selling shares to recapitalise balance sheets. As political risks bubble away in Europe, there is a renewed focus on geopolitical tensions in the South China Sea after Vietnamese authorities reported that a Chinese navy vessel has attacked and sunk a Vietnamese fishing boat. Shortly after the incident was reported, Japan’s Chief Cabinet Secretary Suga announced that Japan would begin cooperating with Vietnam on maritime safety.

The Nikkei closed bearly lower as it is once again tracking the USDJPY tick for tick, and the narrowly-traded pair had a 15 pip "plunge" right around the Japanese close, only to recover its losses in time to push its other favorite correlation pair, Spoos, higher. Not helping Japan was a Reuters article which claims that the BoJ has already begun early planning on how to wind  back its extraordinary stimulus policies. Citing central bankers familiar with internal BoJ discussions, the article says that with inflation already past the half way mark to the 2% target and with early evidence suggesting that the economy has weathered last month’s sales tax hike, Governor Kuroda is keen to outline a strategy that avoids the market confusion and volatility that the Fed triggered in May 2013. There are also concerns about what a wind back in stimulus could mean in an economy where the BOJ has been buying about 70% of newly issued government debt, including nearly all new 10-year benchmark bonds sold by the government (Reuters).

Looking ahead, today sees the release of US Durable Goods Orders, Services & Composite PMI, Consumer Confidence Index as well as BoE’s Carney, ECB’s Draghi and Praet on the speaker slate.

Bulletin headline summary from Bloomberg and RanSquawk

  • Spot gold is seen sharply lower as participants continue to seek comfort in Poroshenko’s victory in the Ukrainian Presidential elections and consequent de-escalation of tensions in the area.
  • Stocks have also continued to benefit with the DAX and E-Mini S&P once again printing fresh record highs after tripping large stops as the UK and US return to market.
  • Treasuries decline, 5Y and 7Y notes lead, before week’s $108b note auctions begin with $31b 2Y, which yield 0.385% in WI trading vs 0.447% April award.
  • Protest parties racked up gains across the 28-nation European Union in elections to the bloc’s Parliament, turning the assembly designed to unite Europe into a chamber for politicians who want to tear it apart
  • The U.K. Independence Party, which wants to pull Britain out of the EU, took first place in elections for the European Parliament, winning a national vote for the first time; Prime Minister Cameron said he will not enter into any pacts with UKIP, saying Nigel Farage’s party is out to “destroy” the Tories
  • In France, Marine Le Pen’s National Front parlayed complaints about too many immigrants and a lenient penal system into 26% of the vote, dealing a blow to Socialist President Hollande
  • The ECB plans to charge lenders as much as 15 million euros ($20.5 million) a year to recover the costs it incurs from supervising them
  • In seeking to revive Europe’s ABS market, Draghi risks an unprecedented reach into the functioning of the financial system that could backfire, according to academics including former Bank of England Deputy Governor Paul Tucker
  • Ukraine’s government said it inflicted “significant” losses on pro-Russian rebels and retook a major eastern airport a day after President-elect Petro Poroshenko vowed to wipe out the separatists
  • The U.S. Department of Justice should investigate allegations that delays in health care at military veterans’ hospitals were covered up, lawmakers from both political parties said
  • The Chinese government is pushing domestic banks to remove high-end servers made by IBM and replace them with a local brand, according to people familiar with the matter, in an escalation of the dispute with the U.S. over spying claims
  • Vietnam and China traded barbs over the sinking of a Vietnamese fishing boat, their most serious bilateral standoff since 2007 as China asserts its claims in the disputed South China Sea
  • Sovereign yields mostly lower. Nikkei +0.2%, Shanghai -0.3%. European equity markets mixed, U.S. stock futures gain. WTI crude and gold lower; copper slightly higher

US Event Calendar

  • 8:30am: Durable Goods Orders, Apr., est. -0.7% (prior 2.9%, revised from 2.6%)
    • Durables Ex-Trans, Apr., est. -0.1% (prior 2.4%, revised from 2%)
    • Cap Goods Orders Nondef Ex-Air, Apr., est. -0.3% (prior 3.5%, revised from 2.2%)
    • Cap Goods Ship Nondef Ex-Air, Apr., est. -0.1% (prior 1.5%, revised from 1%)
  • 9:00am: FHFA HPI m/m, Mar., est. 0.5% (prior 0.6%)
  • House Price Purchase Index q/q, 1Q, est. 1,3% (prior 1.2%)
  • S&P/CS 20 City m/m SA, Mar., est. 0.7% (prior 0.76%)
    • S&P/CS Composite-20 y/y, Mar., est. 11.75% (prior 12.86%)
    • S&P/CaseShiller HPI NSA, Mar., est. 166.20 (prior 165.35)
    • S&P/Case-Shiller US HPI NSA, 1Q (prior 150.39)
    • S&P/Case-Shiller US HPI y/y, 1Q (prior 11.3%)
  • 9:45am Markit US Composite PMI, May (P) (prior 55.6)
    • Markit US Services PMI, May (P), est. 54.5 (prior 55)
  • 10:00am: Consumer Confidence Index, May, est. 83 (prior 82.3)
  • Richmond Fed Manufact. Index, May, est. 5 (prior 7)
  • 10:30am: Dallas Fed Manf. Activity, May, est. 9.2 (prior 11.7)
  • 11:30am: U.S. to sell $25b 3M, $23b 6M bills
  • 1:00pm: U.S. to sell $31b 2Y notes
  • 11:00am POMO: Fed to purchase $2.25b-$2.75b notes in 2021-2024 sector

Central Bank Speakers

  • 8:10pm: Fed’s Lockhart speaks in Baton Rouge, La. 
  • 3:00pm: BoE’s Carney speaks in London
  • 8:00pm: BOJ’s Kuroda speaks at conference Supply

ASIAN HEADLINES

The Nikkei 225 (+0.2%) gained for the third consecutive session and traded near a 2-month high after tracking gains seen across European equities and US futures. Chinese stocks fell with the Shanghai Comp (-0.3%) and Hang Seng (-0.1%) weighed on by PBoC source comments which said the PBOC sees an improvement in data for May and will help reinforce policy stance, adding that policy stance may not include lowering the RRR any time soon.

EU & UK HEADLINES

Today has seen an extension of yesterday’s positive sentiment with both the DAX and E-Mini S&P printing record highs as the US return to market after the long-weekend. Positive sentiment has been aided the weekend reports Poroshenko is to be elected as Ukraine President and thus eroding the war premium as his first objective is to end the war which is in-fitting with Putin's calls on Friday and the weekend. Gilts have underperformed despite weak housing data from the UK as today offers the first opportunity for UK participants to respond to weekend comments made by BoE’s Bean who said he expects rates to hit 3.0% in 3 years. Prelim Barclays month end extensions show Pan-Euro Agg at +0.04y (Prev. +0.10y), Sterling-Agg at +0.06y (Prev. +0.02y)

US HEADLINES

Today sees the return of the US to market, with a host of tier 1 data from the US including Durable Goods Orders, Services & Composite PMI, Consumer Confidence Index. Prelim Barclays month end extensions show US Treasury at +0.13y (Prev. +0.08y)

EQUITIES

European equities are seen mostly higher across the board (although Eurostoxx is flat). Once again the FTSE MIB has seen strong performance following the  recent EU Parliamentary results which showed a resounding win for PM Renzi’s party and has rejuvenated expectations that the country will stick to budget deficit reduction measures. Elsewhere, the FTSE 100 leads the way, supported by InterContinental (+5.5%) after news they have rejected a USD 6bln takeover bid.

FX

GBP has underperformed EUR, underpinned by the release of weaker than expected UK Mortgage Approvals data, month-end buying of EUR/GBP by a major EU central bank and in reaction to AstraZeneca (AZN LN) confirming talks with Pfizer (PFE) have ended. USD/JPY trades relatively flat despite earlier losses stemming from reports which suggest the BoJ has already begun early planning on how to wind back its stimulus policies.

COMMODITIES

Spot gold has been one of the notable movers this morning, taking out Friday’s low of USD 1286, and trading well below the 50, 100 and 200DMAs, following the aforementioned developments regarding the easing of tensions in Ukraine, which has also weighed upon the energy complex as both WTI and Brent crude futures trade lower heading into the North American open.

* * *

What happens next in European politics isn't so easy to see. Indeed it hasn't been a great few days to be a politician from an established political party as newer anti-establishment parties dominated the Euro and local elections in Europe and the UK. The outcomes were perhaps most extreme in the UK, Greece and France where the protest parties all made significant gains at the expense of the mainstream parties. In France, Marine Le Pen's Front National Party topped a nationwide poll for the first time in its history, with around 25% of the vote and as many as 24 seats in the European Parliament, while President Hollande’s Socialist Party scored only around 15%. The major parties scored relatively better in Spain and especially in Italy where PM Renzi’s PD party won a resounding 40%+ of the vote, by far outscoring the protest party Five Star Movement who had around half of that. Overall the European People’s Party – the alliance of centre-right parties from across the EU member states – retained the most MEPs in the 751-seat assembly, with early projections giving the alliance 211 seats, compared to 193 for the Socialists and Democrats. Early projections from the European Parliament showed that protest parties could win around 129 seats. Jean-Claude Juncker has already staked his claim to being the next President of the European Commission, which he says is justified by the European People’s Party’s status as the largest group in the new European Parliament.

For now these results are more of an embarrassment to the mainstream rather than something for markets to get very concerned about. In fact Italy's results are a positive as Renzi is clearly still enjoying a honeymoon period. However one can't help thinking that the probability of a radical general election result somewhere in Europe at some point in the remainder of this decade is high.

Given how quickly new parties are gaining traction, a party could eventually play a major say in European politics that hasn't even been set up yet. This will be an ongoing story bubbling up in background but one that markets will probably largely ignore until it’s more imminent. Indeed we don't have a general election in the peripheral scheduled until October 2015 when Portugal have to go to the polls. This is a few months before the Spanish election must be held.

Despite fairly strong sentiment in the markets that were open yesterday, Asian equities are having a mixed session overnight. Japanese shares (Nikkei +0.8%) are enjoying the best of gains helped by a slightly higher dollar-yen and reports in the domestic media that the government may soon consider cutting the corporate tax rate (Nikkei). There was also an interesting Reuters article today which claims that the BoJ has already begun early planning on how to wind  back its extraordinary stimulus policies. Citing central bankers familiar with internal BoJ discussions, the article says that with inflation already past the half way mark to the 2% target and with early evidence suggesting that the economy has weathered last month’s sales tax hike, Governor Kuroda is keen to outline a strategy that avoids the market confusion and volatility that the Fed triggered in May 2013. There are also concerns about what a wind back in stimulus could mean in an economy where the BOJ has been buying about 70% of newly issued government debt, including nearly all new 10-year benchmark bonds sold by the government (Reuters).

Chinese stocks are lagging (SHCOMP -0.3%) following the announcement of an equity offering from a large state-owned construction firm which is adding to concerns that a number of state-owned banks and industrials will soon be selling shares to recapitalise balance sheets. As political risks bubble away in Europe, there is a renewed focus on geopolitical tensions in the South China Sea after Vietnamese authorities reported that a Chinese navy vessel has attacked and sunk a Vietnamese fishing boat. Shortly after the incident was reported, Japan’s Chief Cabinet Secretary Suga announced that Japan would begin cooperating with Vietnam on maritime safety.

While UK and US markets were closed yesterday, in Contintental Europe we saw a gap tighter in periphery European yields led by Italy (-17bp) and Greece (-24bp). The Italian MIB index also surged higher (+3.6%) with investors welcoming the strong showing from PM Renzi’s party relative to that of the Five Star Movement party. In the EM space, the search for yield intensified and sentiment was buoyed by the results of the Ukrainian presidential election which resulted in a fairly comfortable victory for businessman Mr Poroshenko. Poroshenko easily outpolled his nearest rival with more than 50% of the votes (vs Tymoshenko at around 12-13%). Our Russian strategest Yaroslav Lissovolik writes that the participation rate was quite high at near 60% and if no second round runoff is needed, this will be a positive factor for markets as they can focus on the resolution of other policy issues. Russian CDS rallied (-0.5bp) and the MICEX index (+0.7%) both strengthened to their strongest level since late February. Back in DM, S&P500 futures closed at record highs of 1904 (or +0.37%) overnight before the Memorial Day early trading halt. The EURUSD (+0.1%) held up pretty well despite a speech from Draghi who said that the ECB is watching deflation risks and stands ready to act. The ECB President also said the central bank should be alert to the negative feedback loop between low inflation and inflation expectations.

We have a relatively quiet day ahead as market participants in the UK and US return to their desks. The ECB’s policy forum continues in Lisbon today so expect some headlines. US durable goods orders, Consumer Confidence and Case-Shiller home prices are the main events on the data calendar. Our own DB Global Financial Services Investor Conference kicks off today in NY where there will be a number of Bank and Financials CEOs speaking. EU leaders meet in Brussels to begin talks to choose a next European Commission president. In the EM world, we have the Hungarian rate decision and South African GDP on today’s calendar.

Looking out over the rest of the week, Brazil BCB holds its policy meeting tomorrow. On Thursday, the US Commerce Department publishes its second estimate of Q1 GDP. Recall that the first estimate came in at just 0.1%. Thursday’s data docket highlights include US jobless claims, pending homes sales, Brazil inflation and Philippines Q1 GDP.

Friday will be a data rich day as European markets begin to redirect their focus on next week’s ECB meeting. Data wise there is US personal income and spending, Japan CPI for April (which will be affected by sales tax hikes in that month), Brazilian and Canadian Q1 GDP and the Chicago PMI.

 

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Tue, 05/27/2014 - 07:11 | 4797730 billwilson
billwilson's picture

Gold is not down due to Ukraine (that would have been yesterday), but to option expiry. It always goes down on options expiry. Great way to make money in the unrigged markets.

Tue, 05/27/2014 - 07:32 | 4797733 GetZeeGold
GetZeeGold's picture

 

 

I'll just take some physical gold.....you kids can chase that paper crap.

 

Chasing ever rising equities in a terrible economy? Sounds like trouble.

Tue, 05/27/2014 - 07:38 | 4797754 negative rates
negative rates's picture

Gold is fer spendin, not saving.

Tue, 05/27/2014 - 08:18 | 4797831 BeetleBailey
BeetleBailey's picture

+1,000

FUCK SPOT PMS!

anyone trading them.....GOD FUCKING SPEED.

Tue, 05/27/2014 - 07:26 | 4797737 fonzannoon
fonzannoon's picture

Look at the awesomeness of this article as they spin what is going on as bullish. It's just tremendous.

 

http://www.bloomberg.com/news/2014-05-26/bad-credit-no-problem-as-shares-of-balance-sheet-bombs-rise-94-.html

"Gains are being sustained by speculation that the corporations whose finances put them most at risk will thrive as the economy improves."
“Having a weaker balance sheet isn’t a liability or a drag on potential company performance at this point,” David Kostin, chief U.S. equity strategist at New York-based Goldman Sachs, said in a May 20 phone interview. “In an economy that’s getting better, you can operate perfectly fine with a little more leverage.”

“There’s insatiable demand for high-yielding, lower-quality instruments, and companies are taking advantage of that to get money,” 
Tue, 05/27/2014 - 07:28 | 4797742 Non Passaran
Non Passaran's picture

I'm so relieved to hear that everything is so perfectly balanced.
Forward, comrades!

Tue, 05/27/2014 - 07:33 | 4797745 GetZeeGold
GetZeeGold's picture

 

 

Unemployment is down.....but a record number of people don't have a job.

Tue, 05/27/2014 - 07:36 | 4797751 fonzannoon
fonzannoon's picture

Check out this comment from the article. Everyone is figuring it out.

"This phenomenon is the result of algorithmic trading in indexes and the trade to sell the index leader and buy the index laggard on the theory they have an innate tendency to converge in the near future. Bloomberg continues to hallucinate theories of individual stock selection for phenomena that arise in algorithmic computer trading/"

Tue, 05/27/2014 - 07:40 | 4797758 negative rates
negative rates's picture

Oh yeah, those tits up traders.

Tue, 05/27/2014 - 08:15 | 4797823 petolo
petolo's picture

Yellow Icebergs portside.

Tue, 05/27/2014 - 07:37 | 4797753 NoDebt
NoDebt's picture

In other words, BUY EVERYTHING.  Doesn't matter what, it's all going up.  But the junkier it is, the higher it will go.

Tue, 05/27/2014 - 07:41 | 4797759 negative rates
negative rates's picture

Brass monkey, that funky junkie.

Tue, 05/27/2014 - 07:41 | 4797762 fonzannoon
fonzannoon's picture

"But the junkier it is, the higher it will go, when the recovery that is just around the corner gets here....at which point....rates will shoot up....and then....oh shit....

Tue, 05/27/2014 - 09:52 | 4798109 disabledvet
disabledvet's picture

"Zero hedgers get the PTB's number." I agree with all of these comments and look forward to the "ZH Forward" now.

Absolutely...."the prima facie ridiculous meme" (even from the flow tards pretending to be Tylers Durden) is now "buy everything and everyone."

This flies in the face of the reality that we're running out of cash period at a very alarming rate.

Gold and silver look clearly to have put in a bottom here as all fiat EVERYWHERE looks suspect.

It is truly laughable and of course pathetic for the Tylers to downplay Europe as a "kinda nothing burger" as clearly the European experiment clearly has been smashed to pieces "and with every election going forward further looking out for number one" (Italy, France, Sweden, Britain, etc) will be the result.

I also think this is a warning shot for the two party system in the USA. Republicans and Democrats both could be about to be swept into the dustbins of history.

Tue, 05/27/2014 - 08:06 | 4797810 BeetleBailey
BeetleBailey's picture

I saw the same claptrap during 2000 - 1998 - 1994 - 1985 fonz.

Breath-taking the utter BULL SHIT that pukes out of these sleazefucks

Tue, 05/27/2014 - 07:25 | 4797739 Space Animatoltipap
Space Animatoltipap's picture

Before the total collapse first new rounds of QE and other communistic activity by the FED cartel to keep the craziness going. Of course.

Tue, 05/27/2014 - 07:27 | 4797740 AdvancingTime
AdvancingTime's picture

Stock prices are rising but good jobs are not being created. The implications of poor job creation are massive. The biggest may be that a huge number of people are dropping from the work force. Often these people have little in the way of savings, this means that the burden of caring for them will be transferred to society.

If to many people shift into this category we will slowly wear down through attrition. Finding a fair way to share and balance the work load that goes on every day may be one of the most important problems facing our modern world. Not discovering a solution to this dilemma bodes poorly for our consumer driven economy and adds to the toxic problem of inequality. The article below looks at how this effects society over time.

http://brucewilds.blogspot.com/2013/09/implications-of-poor-job-creation...

Tue, 05/27/2014 - 08:08 | 4797813 Fuh Querada
Fuh Querada's picture

Fuck off and take your useless blogspot with you.

Tue, 05/27/2014 - 08:32 | 4797876 Ponzi Pontiff
Ponzi Pontiff's picture

I had to log in just to tell you to get your spammy ass to fuck.  Jizzwad. 

Tue, 05/27/2014 - 07:35 | 4797747 Dr. Engali
Dr. Engali's picture

Wars and violance breaking out everywhere, governments overthrown, the elites are being rejected en masse via the election process, nobody has any money, and the cost of living is going through the roof. All this and the 'markets' continue to rally on like nothing is happening and PMs are contained. How can you not marvel at the planners handy work ?

Tue, 05/27/2014 - 07:39 | 4797756 NoDebt
NoDebt's picture

New bumper sticker idea:  I <heart> Central Planning

Tue, 05/27/2014 - 07:43 | 4797763 negative rates
negative rates's picture

Old bumper sticker idea:  I <heart> Central Planning

Tue, 05/27/2014 - 07:58 | 4797790 BeetleBailey
BeetleBailey's picture

BEST BUMPER STICKER:  

 

FUCK CENTRAL PLANNING!

Tue, 05/27/2014 - 07:52 | 4797781 BeetleBailey
BeetleBailey's picture

True that Doc. Indeed.

THE MOTHERFUCKERS

LONG and (kinda) strong this morning...poised to do the Jap "in and out"...

again...

THE MOTHERFUCKERS

Tue, 05/27/2014 - 10:02 | 4798136 disabledvet
disabledvet's picture

The Civil War was deflationary. Never had a problem with the greenback during that horrific event.

Sure doesn't feel like that this time around. "The People" seem to be geling around "an alternative"...don't have total chaos of that I agree. The New Normal however clearly is not a process of reaching out and healing...let alone trying to find "better."

Indeed this thing is looking like a cattle prod. Can't put my finger on it yet but something has clearly broken here and the "solution" clearly appear to not be that at all.

Tue, 05/27/2014 - 08:03 | 4797757 intric8
intric8's picture

Its not like futures rise because the mass muppetry are being hornswoggled every morning by a disingenuous financial media. Shit is RIGGED. The entire financial system is now an obvious and total racket. The sickening positivity displayed in the indices that laughs in the face of grave developments both domestic and abroad can no longer be justified by the most creative metrics. Might as well play this bs ramp up into the next election.

Tue, 05/27/2014 - 10:03 | 4798142 disabledvet
disabledvet's picture

Why are treasuries rallying too....

Tue, 05/27/2014 - 08:01 | 4797796 g'kar
g&#039;kar's picture

FED is buying $2.75 billion today. Belgium must be helping out.

Tue, 05/27/2014 - 08:08 | 4797812 fiboman
fiboman's picture

10 year treasuries have already formed a reversal diamond pattern and are now bullish in the intermediate term.

http://goldenopportunitytrading.blogspot.co.uk/2014/05/bullish-bonds-upd...

Tue, 05/27/2014 - 08:45 | 4797921 InjectTheVenom
InjectTheVenom's picture

uhh, ok ... if you say so 

Tue, 05/27/2014 - 08:13 | 4797815 Notsobadwlad
Notsobadwlad's picture

"...either bonds or equities are making a horrible mistake: the question remains: who?"

That is only true under scenarios where there is not infinite printing and theft. In a world where one subset of creatures has the legal ability, created through the threat of force, to declare scraps of paper or electroinc bits monopolistically created by them, to hold the same value as anything else and then trade those scraps of paper and bits for anything tangible that they want, higher esset prices and selected infinite bond buying are possible. There is no lack of supply of fiat to buy an infinite amount of everything. The trick for them is to print it fast enough and buy things quickly enough that non-complicit people have no ability to compete.

Tue, 05/27/2014 - 08:16 | 4797827 Spungo
Spungo's picture

"There’s insatiable demand for high-yielding, lower-quality instruments, and companies are taking advantage of that to get money"

haha. I'm reading Seth Klarman's book, Margin of Safety, which was published in 1991, and it talks about this exact same thing happening in the 1980s. As interest rates fell, people demanded higher yielding bonds. The booming popularity of junk bonds, PIK bonds, and structured debt products injected tons of cash into companies. All of that money led to a lot of capital misallocation. Many companies were nothing more than ponzi schemes. A company with no profits would issue new junk bonds to pay the interest on old junk bonds. For a few years, it looked like junk bonds were a great investment. Very few companies defaulted because they were always able to get more money to keep the ponzi going. When the credit stopped, the house of cards collapsed. 

 

Tue, 05/27/2014 - 08:35 | 4797889 DavidC
DavidC's picture

"...which is in-fitting with Putin's calls...."

Do you mean "fitting in"? Please!

DavidC

Tue, 05/27/2014 - 08:50 | 4797943 yogibear
yogibear's picture

The Federal Reserve keeps on buying US treasures with infinite printed money until all faith in the currency is lost.

The Fed is also ensuring stocks keep getting the bids.

To replace all of Germany's gold as well as others the Fed has to buy gold cheaper and keep up their naked shorting.

 

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