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The Halloween Yen Massacre Sends Market To All-Time Highs
Headlines:
- USDJPY rose 2.7% today - biggest day in 18 months back to Oct 2007; +3.7% on the week - bighest week since Dec 2009
- Nikkei +7.7% today - biggest day since March 2009; +10% on the week - biggest week since Dec 2009
- Russell 2000's up over 6% - best month in 15 months
- Russell +1.2% year-to-date
- Nasdaq at March 2000 highs
- 5Y yields up 12bps on the week - biggest increase in 6 months
- 2Y yields up 11bps on the week - biggest increase in over 3 years
- 5s30s flattened 10bps on the week - biggest flattening in 7 months
- Silver -6.1% on the week - worst week in 16 months
- Gold -4.7% on the week - worst week in 16 months
Perhaps the look on Jeff Cox's face sums up the day as talking head after talking head stepped up to reassure investors that the market is not beholden to central banks despite the most in-your-face example of it since the PPT in 2008.
Today... pic.twitter.com/09SeiCEykD
— Tim Backshall (@credittrader) October 31, 2014
Shorts were squeezed the most on the week since Dec 2011
Oddly, despite all the mainstream media hype, being "short" the weakest balance sheet companies (based on Goldman's "most shorted" index) has actually outperformed all major stock indices year-to-date...
But year-to-date bonds remain the biggest winners, silver the big laggard and the S&P up exactly the same amount as the USD....
October ended up being quite a month for stocks... best month for Small Caps in 15 months
And off the Bullard QE4 lows...
as the week's strength was all about fundamentals...
The day was odd to say the least - all the action occurred overnight and stocks actually faded off opening highs all day... until the close when we melted up...
As any question of sustainability was thrown out the window as VIX was heavily bid... until the late day when it melted up
HY Credit was not buying the exuberance either...
as stocks and bonds swung around each other...
Of course it was really all about USDJPY and Nikkei - that is a 1230 point rally in the Nikkei! and a 3 handle rip in USDJPY
Kuroda is happy
Nikkei's move since the FOMC in context
On the week, Treasuries closed higher in yield with a notable bear flattener... (30Y +2bps, 5Y +12bps)
The USDollar was strong all week, especially post FOMC as EUR and JPY weakness dominated
Commodities were weak as the US rallied but PMs were crushed...
Charts: Bloomberg
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Fucking weeeeeeee!!!
Inflate or die. Was there anyone that thought they'd do otherwise? They're certainly not going to admit defeat and default, like they should.
October ASE sales through the roof!! 5,790,000. Just updated.
https://www.usmint.gov/about_the_mint/index.cfm?action=PreciousMetals&ty...
I did my part. I say a big fuck you to these crazy assholes but thanks for the sale. Just bought 150oz in bars w/delivery at $16.60.
@Ness. Nice price. Bought a tube of Maples (I prefer them to Eagles) on ebay today. $20 a pop. But hey, it's fiat, right?
I'd pay $20 fiat to go to the zoo and watch the monkies throw shit at each other.
I'm buying all the way down. Doesn't matter. I'm taking care of my loved ones.
and I bought a gilotyne little dusted and rusty but it may work if need it
and I feel good now
Who the hell is SELLING metal at these prices...
Wait and see if one of the games will be, get miners on the ropes, shutter operations, then the financiers buy up production facilities, juice price. Voila....
Hope the fucking FRN dies before that.
Metal, no one. Paper futures, cash settled, all the banks.
DavidC
More like inflate and die...
Financial kamikaze, banzai and seppuku all rolled into one.
I believe Great Britain is the largest foreign holder of Japanese debt.
Again...stay liquid, stay smart.
YES!!! Backing up the truck!!! I LOVE it when I can buy my PM's on an incredible sale!!!
They will not let them step down until they will destroy everything beyond repair.
Yup, like Kyle Bass said Zimbawbwe has the best performing equity market, but your portfolio will buy you three eggs.
Japan better get to work on that $1 Trillion Yen keyboard shortcut symbol.
The day AFTER the elections might be a very interesting day for the "markets"...
This crap is going to keep on keeping on until supply chains fail.
Stupid has to hurt. There are no consequences, so they keep doing it. They are invincible.
Japan is merely the experimental lab rat furthest down the QE maze and thus closest to the warfarin-laced cheese-prize.
I keep thinking the same thing, but why the experiment. Does anyone question the outcome? Add in guns and then you have the American outcome. One little difference changes a lot.
Maybe they will let our nuke plants melt down without a solution too!
We are on the same wavelength, Missy. I wouldn't mind so much if only the elite suffered for their sins. Unfortunately, it will be you and I who pay the higher price.
It'll go on after the supply chains fail as well. That's when it'll really get crazy and you'll see the vertical lines on charts with log-log labels on the side.
I think I need to think about that one for a while. It is a lot to take in.
They only have one tool, printing. When they encounter problems they use it more, not knowing any better. We saw this play out in Weimar.
Weimar has a lot of help outside and inside, Japan is on its own. The people will just keep spending less untill they stop spending all together. Japanese and squeese a yen like nobodys business.
If Japan does break the yen it will all go sideways fast. But they dont want to break the yen just get people to spend money they will not spend. Old people dont spend much on anything other then healhcare and family.
Either the yen breaks for good or it goes back to 80. Abe will be shown the door and back to 80 the yen will go.
Remember Weimar!
Stupid doesn't hurt or even factor into the equasion when the nerve ganglia are all from the waist down
Yes maam, it is all about the JIT isn't it.. Problem is America is full of ignorant violent lying scumbags many with guns, most don't shoot well and have 100 rounds to their name but still a problem for when the trucks stop..
When will shit start going tits up?
JIT is great for dominos or zappos. I want a local stockpile of food and crops in process. Having some fossil fuel locally ready to harvest and in storage isn't a bad idea either.
If ya pick the right parts of the Country, you can have it too.
IMHO Its more like 12-16 rounds for the average ignoramus.
Enough to get stupid with.
I've been thinking it will be more like the month or two after the elections that'll prove to be when fear returns. The Republicans will likely take the Senate. I think we'll have a couple more months of still further rising stock prices, because the Republican take-over will be seen as a positive, but more importantly, oil's dive over the last few months will give consumers a false sense of security to spend their brains out on credit cards this holiday season. But no later than January, lookout. Asset deflation forces in the financial sector, renewed fears of economic slowdown and the need to monetize debt will bring out the QE talk again.
I agree wombat, but at the same time you are making sense and making common sense does not fit into the matrix..stop it or you will go to a FEMA camp! :-)
Gas price drop means around $20 extra per month for most people.
Dunno, I know folks who commute 50-100 miles a day in big pickup trucks and SUVs and see it as "just how it has to be." Then their partner drives too, maybe the kids. I have not been to a gas pump in a while (I walk a lot to work and back), I am shocked at how low it is ($2.42, WTF?). Last I checked it was 3.70ish.
Bingo - those households with low mpg vehicles will benefit way more than those plugin Prius asshats that take the subway. :)
In one word; elections.
Let's see if it stays low in January ...
Regards,
Cooter
The psychological impact of lower prices has a bigger impact on consumer confidence than the actual dollars saved. Most people can't even balance their checkbook - or even know what one of those paper booklet things are, bygone era and all. They don't really think much about the aggregate dollars saved. But everyone jumps for joy seeing a $2 handle on the per gallon price (or low $3 buck range) because that's more easily recognized. Hate to be cynical, but...
considering they were printing roughly (here in the us) about $230 per person(every single person counted in the 320,000,000) every single month for 4 years - well, it's a drop in the bucket. but - probably enough for them to feel rich enough again to simply credit card everything and anything they think they NEED to buy for the 'holiday' season.
the consumer is BACK as far as cnn sees this, and that means stocks rocket to the moon. plus the mid-term elections (doesn't matter who wins, does it, simply that it occurs) + santa claus rally. all stocks up at least 10% to year end. 12+% return on the year for the genius asset managers, and that obama and his team are clearly, brilliant.
/sarc - but i'm not joking about what stocks are going to do. will i invest? no. but, i'm a jerk. (with 30 day holding period handcuffs).
And a little Ebola thrown in for good measure to secure the QE deal!
I bet the 4 foot 9 inch Yellen must be blowing Kuroda's 1.9 inch weiner in this picture!
Eww -egad!
take QE away and his dick will be 1/4" :-)
He looks like a Bond villain. James, that is.
The other kind too.
He looks happy $$$
Why didn't I buy the fucking dip???!! Cuz I'm a fucking idiot!!!
ror
Idiotic Japs.
Suicidal. Must be in their genes... Remember their tradition: seppuku, kamikaze. Kyle Bass was right: the japs will crash first, and what a show will that be...
How many yen to bitch slap Ron INsana?
"as the week's strength was all about fundamentals..."
Dear me, those fundamentals again.
Fundamentals of money printing, that is...
Off topic but holy shit I just seen the update on silver eagle sales.....5.79 million for October.
Great pic of Kuroda. Kind of puts a face to the madness.
Good play ... you saved the metals chart for last. Oh, the horror ..
Does this level qualify for blood in the streets ?
Good Lord, Abezilla underling " Haruhiko Kuroda" seems to have lost the ability to shoot flaming ¥ out of his mouth.
P.S. look at those high yield charts. We call that convergence.
I've said it before and I'll say it again, Central Bankers shouldn't take MDA.
MDMA got me feelin like a Champion
When Bullard was talking about 'QE4' what he meant was Japan....musical QE's.
But it has to be passed on to someone at least able to carry a tune...
This is not going to end well ...
BTFD Buy Gold Buy Silver Buy Buy BitCoin Last Price: $341
Dude should check his diaper. That doesn't appear to be just any laugh.
Thats his last laugh
I wonder how the Japanese feel about their new third world status?
This year has been the worst year i had ever had in my 23 years as a trader and investor
Lost so far 10% on the portfolio
nothink works for me
I am short : Dax,S^P,Russel2000,Indian mrkt, Biotechnology and some individual stocks such as Gpro,Tsla,Amzn and Twtr and Japan from today at 16750
Things that used to work for me dont work any more.
This is so frustrating and so far I see no silverling for me.
Fighting these crazy central bankers looks like suicide so far
I suspect you’re not the only one. Not only have algos nullified many past winning strategies, but front-running of today’s news may explain the odd recent action, for when central bankers coordinate, leaks are inevitable.
The most difficult thing is to adhere to methodology even when you strongly disagree with the antics of these largely unelected finance leaders. It’s folly to fight them, and the recent ramps makes one suspect it’s propelled by shorts given the odd volume patterns. It’s so tempting to say “this is madness” and get short on opens like today, but there’s nothing to collapse the balloon when they’re all in cahoots.
Traded very foolishly myself this week, fucked my whole month, but the only thing to do is forget it by Sunday night, and realize the forum to fight these bastards is not within your trading account. Psychology always the hardest part of trading, that won’t change.
Good post. My question to you is, for next week, are you with them?
My thoughts are, too steep of an incline for SPY right into previous highs. I'm not saying a double top. BUT, it seems some backfilling is in order. The problem for me is that moves that used to take 3-4 to play out, essentially happen in hours now. This activity in my opinion has a shelf life, ie, this mofo will crash at some point.
Given the crazy issues cited daily on these pages, I gravitated to pure daytrading (100% cash by 4:00), as it seems any longer term, intellectual approach is faded by the algos.
It took me years to find a framework that works, but on 'extreme' days (e.g., when we gap open above every moving average), I often fall back into the rookie mistake of trying to fade. There's no fading a massive short massacre, as large buy orders are waiting every few pennies down by our hemorrhaging brethren.
Also need to stop whenever something feels "funny", and I'm convinced the BOJ news was front-run, especially Tuesday's Russell non-stop ramp without even a few penny pullback for 6 hours, as well as strange action Wed and Thurs, a constant, low-level bid every 5 minutes. It definitely wasn't the Fed -- if that was the worry we'd have taken out the FOMC days' highs/lows in the first 15 min before a stronger post-2:30 move, and it was the quietest Fed day YTD.
just do opposite what is "smart" or "right" Unfortunately I cannot do it too :) I have no stomach to walk into the fire.
So then just do not play until this shit blows up. Today the doomed car of central banking racing for the wall just shifted a gear higher.
This is just the starting gun, we ain't seen nothing yet!
This shit storm has been brewing a long time and the real match has been lite now. Next up, not a mere few trillion... Quadrillion is on deck baby, these bitches won't stop until the whole mother fucker goes up in literal flames.
Bukle up!
can't wait till the markets FINALLY figure out this will crush S&P earnings ... and capex spending
Got Recession?
OCC this week gave ANOTHER warning on subprime auto lending going sour
won't be long
what's OCC? thanks...
Office Comptroller Currency
deputy's speech tuesday
http://occ.gov/news-issuances/news-releases/2014/nr-occ-2014-146.html
He's losing it
https://www.youtube.com/watch?v=-A65N3Efnn0
According to Natixis FICC Research:
http://personal.crocodoc.com/SU8Hy8u
In reality, central banks control only the prices of the assets they buy directly
When a central bank buys an asset directly (often government bonds), it drives up the price of this asset, the demand for which increases.
But the prices of the other asset classes increase only if the economic agents that have sold the first assets to the central bank use the money received to buy these other asset classes.
This transmission of increases in asset prices to all asset classes is therefore unstable, since it depends on the behaviour of investors and savers. Since 2012, we have seen that central banks’ purchases first led asset sellers to buy risky assets (equities, corporate bonds), whose prices rose. But in the recent period, the rise in risk aversion has turned them away from risky assets, whose prices have fallen, and they have invested the money received from the central bank in risk-free assets.
There is therefore no stable monetary policy "risk channel"; the only asset prices that are controlled by central banks in the longer run are those of the assets that central banks buy directly. This could in the future push central banks to buy riskier assets if they want to change their prices in a stable manner.
Central banks’ asset purchases have a direct impact on the prices of these assets
When a central bank buys financial assets, it increases demand for these assets, which directly drives up their prices.
This occurred with purchases of Treasuries and ABS in the United States (Charts 1A and B) and with government bonds in the United Kingdom and Japan (Charts 2A and B), and with the announcement of covered bond purchases in the euro zone (Chart 3).
But the impact of the central bank’s asset purchases on other asset classes is uncertain
- The central bank buys assets (especially government bonds, Charts 1A, 2A and B above).
- It pays by creating money (Chart 4).
- The economic agents that sell assets to the central bank use this money to buy other assets. But they have a free choice: a quantitative easing policy will drive up the prices of the assets that economic agents choose to buy, not the prices of the others.
- We also saw from 2011-2012 until the spring of 2014:
• A tightening of credit spreads (Charts 5A and B, 6A and B);
• A rise in the stock market (Charts 7A and B, 8A and B).
- But investors’ risk aversion has risen since the spring of 2014, (Charts 9A and B): they no longer buy risky assets and the prices of these assets have corrected downwards, whereas long-term interest rates on risk-free government bonds have fallen sharply (Chart 3 above, Charts 10A and B).
Conclusion: The risk channel is not robust
The transmission of the rise in the prices of the assets the central bank buys directly to a rise in the prices of other assets is therefore unstable, since it depends on investors’ attitude and their risk aversion.
The "risk channel" is the mechanism through which the central bank’s monetary creation drives down risk premia.
We have seen that this mechanism is unstable: it functions only if economic agents use the money created by the central bank, in exchange for purchases of risk-free assets, to buy risky assets.
If their risk aversion rises, this mechanism disappears - and so does the risk channel. In that case, the only remaining possibility for the central bank is to buy risky assets directly if it wants to drive down their prices.
That is one happy chink. I'm sorry, I mean jap.
When you have a power plant in ongoing meltdown...
When your aging population is overwhelming the system...
When you are decades into QE, anyway...
When 39% of Japanesse women and 36% of Japanesse men don't want to have sex...
The great philosopher, Hillary Clinton, summed up Kuroda's position best:"What difference does it make?"
koruda looks like he's "snapping off" in that picture !
getting off on QE
friggin messed up shit, forsure
There is something very demented with finacial markets the past few years. Gold has basically been falling since the onset of QE3 on the supposed realization that QE is not inflationary. Stocks on the other hand have rallied immensly as they are the direct beneficiaries of QE. So the Fed decides finally to put a stop to QE and what happens? Stocks rally back to the previous highs while gold takes a further bath. How could it be that something that benefits form QE is not affected from its termination while something that does not is hurt? If that is not enough, today the BOJ increased considerably the size of their QE sending the Yen reeling. Gold takes a further hit on the all-powerful correlation of gold to the Yen. Never mind that Japan is a minor buyer of gold. never mind also that the world's 3rd largest economy is going into full ponzaification. It's the correlation that counts.
All this says to me 2 things. First, there is an economic war going on between the US (and its subserviant nations) and the BRICS which the west is winning (for now). If you are in the first team you get to enjoy low interest rates and stable currencies. Smashing gold gives the zero-yileding currencies of the west further credibilty. The BRICS get the wrong end of the stick namely high interest rates and falling currencies. Second, the level of lunacy in the markets is at such an extreme that I think we are near the end of this madness.
Next stop for gold $1050 and then a little bounce. Silver $15 and the same. On their way to sub $1000 and sub $10. Yen first, then Pound, then Euro... King Dollar will be the last man standing.
This is not the end, nor the beginning of the end, its not even the end of the beginning.
I happen to disagree with you. But would like to hear your reasoning, you never post that. Are you just pulling numbers out of your ass like the rest of us?
Why would anyone even accept yen for payment for anything? Except for taxes, anyway.
And what kind of nation uses a currency that makes routine purchases involve such huge numbers? Pick something bigger, what is WRONG with these people? And they want to devalue it, so the numbers are even bigger still...
Fuck you Japan. Fuck your too-proud-to-admit-they're-wrong leadership, and fuck your too-stupid-to-do-anything-about-it people.
And fuck your stupid anime cartoons too. And while I'm at it, fuck that zippy pop-music with the shrieky Alvin and the Chipmunks-sounding pre-pubescent girl singers...
See if the markets consolidate at these highs, or if it's the mother of all timely mark ups the big dicks offload into. I mean , perfect time for Ebola to take hold of western economies , and at least that'll be a feasible out for the bankers/ governments, as they blame ebola for the mother of all economic collapses in western cities.
I mean, not as if we're seeing any dodgy quaratine practices with a level 4 contangion about to blow about the shopping malls is it ?
We blame the coming ebola pandemic for the collapse of our world economies.....
Yes indeed. I still think this is a plausible scenario. The recent (bullshit) rally has now given anyone who needed to be out, out. It has also taken pressure off of the administration just in time for the elections. Yes indeed, ebola would be a good stool pigeon to blame the collapse on. 18 trillion in debt and a stated 4 trillion (who knows what it really is) in Fed balance sheet increase, no those are not the reasons...it's ebola, you fucking dumb serfs. ABC news, CNBS said so.
That was some true chart porn!
I think I have a stiffy....
today Japanese have no honor, thus no seppuku, but a fuck you!
stupid dip buyers. will they ever learn?
Much of today's shit show was based on the assumption that this gives Draghi enough muscle to push the Germans. I don't see Germany folding yet. This coupled with fiscal gridlock if the Republicans win the Senate and next week might bring some cold water. If bubba folds and the dems hold could be 2200S&P.
Round-robin QE to infinity. The US Fed, ECB and then the BOJ.
Expect QE4 to QEn. Until the dollar blows up. The Yen blows up first.
I'm sure it was done to make their goods and services more affordable to the rest of the world and will result in huge infrastructure commitments in order to keep up with demand. Certainly not to cover the asses of the wealthy who have made horrible investments.
Jap wanders into an aussie echange to swap his yen for $ and is impressed by the amount he gets, so happy that next day he returns with a buddy, but this time they only get half as much. "hey how cum we get less money today?" "Fluctuations the teller explains." "Well fluck u aussies too!"