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Everything's Fixed - Russian FX Halt Prompts Buying-Panic In Stocks
Having once again broken its 100DMA, the S&P (and the rest of the US equity complex), the news that various platforms have halted FX trading in the Ruble (though they won't enact capital controls) and a modest bounce in oil prices seems to have sparked a EURJPY and VIX-driven v-shaped buying-panic very-visible-hand ramp in stocks into the European close... because nothing says dump VIX protection and BTFD in stocks with both hands and feet like totally disastrous US macro data and a global financial system on the verge of collapse.
The Ruble was halted..
And that sparked a Christmas Miracle...
Which sent everything ripping higher
Thanks to EURJPY
A 50 point swing in S&P futures and 400 pint swing in The Dow...
Because oil prices dead-cat-bounce to $57...
Now we see if the European close prompts another trend reversal...
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Well if you cant short the Ruble.... where else are you going to put your money.
Ok, this shit is starting to give me a headache
Hey, that worked pretty damned good. What currencies could we hault trading in next? (First wiseass who says The Dollar, gets it right in the neck.)
It only matters if people still believe it.
"Did he fire six QEs or only five?" Well to tell you the truth in all this excitement I kinda lost track myself. But being this is a .44 Printing Press , the most powerful manipulation tool in the world and would blow your market's head clean off, you've gotta ask yourself one question: "Do I feel lucky?" Well, do ya, punk?
Regards,
Cooter
Just bought a 10oz bar of the .9999 pure silver today. First phys purchase I have ever made. I guess I popped my cherry so to say.
be sure to buy an ounce of gold for every ounce of silver...& you'll be fine
Welcome to the club, froze25! Don't know if you bought from a dealer locally or through the internet and are awaiting delivery, but I can tell you this: when I first felt the heft and weight of my first 10 oz. silver bar, I was hooked for good. It's just so cool.
Good timing for you, silver has been whacked the past few days, back near its recent lows. Doesn't matter in the long run, I ignore the fiat measurements and just focus on the oz.
Also, the suggestion of buying an oz. of gold for every ounce of silver may be a bit over the top. At the current ratio (in the 70s), I'd advise one ounce of gold for every 50-60 oz. silver. And, hold some cash. Keep perspective and HAPPY STACKING!
Au:Ag=1:100
Uhh, Kevin, VIX is kicking ur ass..
"A fool's money in this market, will soon depart."- Confucius
Aaaaand... it's gone.
Thank's Fed, you saved us again.
funny how the "central bank feel good all is saved rally" happens right before meeting days
Think I'll go fondle my gold today. For some reason it just gives me a warm fuzzy feeling.
Pull up your boxer shorts like a man & raise interest rates, Mr. Yellen!
Step back. This was predicted as being part of the end scenario. Wild assed swings in the S&P and Dow. The only difference is that the reason is obvious, before we could not see what would trigger this.
Now, what comes after this in the script written years ago?
Interesting times.
largest single direction rally since 2011 debt crisis ..
http://hedgeaccordingly.com/2014/12/reporters-without-borders-66-journal...
Wait till the Fed has to buy the market to hold it up vs to run it up
Oh wait
What good is a plunge protection team if you can't use them every time the market has a harrowing 5% plunge?
'We' create this 10 ton flywheel, hand out monkey wrenches while mounting it in a school yard, run it up past 10,000 RPM, and innocently ask "What could possibly go wrong?"
Modern economics.
Algo adjustment takes so much time nowadays...
Something big is going down...
Absolutely. Russia HAS to do something, and immediately.
Might be a good time for ABC to re-air The Day After.
So this is why they put the breakers on Gold.
what the fuck is this bullshit???
oh, i get it - BULLSHIT...
btw - Just hit Apmex up for a cool 100oz's of Incurse Indians by Golden State Mint...waited til today cause the MoneyChangers playbook is more predictable than the fucking Raiders...
http://www.apmex.com/product/29007/1-oz-silver-round-incuse-indian
DEATH TO THE MONEYCHANGERS.
You guys in the US are the envy of people abroad!
I hope you realize and take advantage of the immense choice of PM products readily available to you; and for a price that still somewhat tracks spot.
Assuming you live in the UK...what is your favorite method of acquiring future reef projects?
I'm in western Europe.
The safest and cheapest way to get silver AND gold are still German online stores. (Even if you include shipping to the rest of Europe).
The only three products that are "fairly" priced are Maples, Philharmonics and Armenian Noah's Arks.
The premiums are outragious and the stores just ignore smack-downs.
Generic rounds are more expensive because there's an extra 19% VAT on them as opposed to "legal tender" coins.
This will never end. Seriously.
Same as it ever was
It ends in physical ruins, but until then....THE BANKERS WILL CONTINUE TO RAPE.
The Russian ruble crashed again on December 15, in the biggest fall since the last big crisis in 1998. The Central Bank of Russia (CBR) belatedly stepped in with a huge interest rate hike overnight, but it has been roundly criticised for being "behind the curve" and unnecessarily threatening the stability of Russia's financial sector.
"You have to kind of ask yourself what a central bank is doing when it lets its own currency fall by 10% in a day, when it has $420bn in FX reserves (like 18 months of import cover). This is extreme central banking, and the question is what are they trying to achieve?" asked the ubiquitous Tim Ash, head of emerging markets research at Standard Bank. "Moves like this create systemic risks – the risk of panic amongst the general population, and surely risks of major deposit flight. And it also comes on the back of already huge moves in the exchange rate."
The ruble has now lost over half its value to the dollar this year – a UK penny was worth more than a ruble on December 16 for the first time ever – while all previous attempts by the CBR to stop the rot have failed. Bankers like Ash are complaining that the central bank's rate hike of earlier in December by 100 basis points and the lack of intervention on the currency market have led to a rout that threatens to spin out of control. Russia watchers had been expecting at least a 150bp hike, and the ruble entirely ignored the increase and continued to slide, before taking another big step-down on December 15.
At a late night panic meeting on December 15, the CBR finally conceded defeat and pushed through a massive 650bp increase in the key policy rate that will almost certainly kill off growth in 2015 and lead to a deep recession on the order of "at least 4.5% in 2015 if oil stays at $60", the CBR said in a statement. The choice has become between a recession next year or a financial crisis now – and the CBR has gone with recession in 2015 as the lesser evil. "This decision is aimed at limiting substantially increased ruble depreciation risks and inflation risks," the central bank said in a statement.
The CBR also said early on December 16 that it would increase the maximum volume of foreign currency it provides to Russian banks, via its forex repurchase agreement auctions for 28 days, to $5bn from $1.5bn.
Unfortunately, the aggressive move looks to have been in vain. Despite coming out of the gate with a 9% gain at the opening of the market on December 16, the ruble has since given up all those gains and by midday Moscow time was down about 3% on the day.
Keeping the power dry
CBR Governor Elvira Nabiullina has made it clear that the last thing she wanted to do was hike rates, as she has been more worried about the effect on Russia's already low growth (Russia will finish 2014 with about 0.5% growth). But in the end, say critics, she now has the worst of all worlds: $100bn has been spent managing the currency lower; total rate hikes this year are still a growth-killing 10%; and the ruble's value has still been cut in half. Some are already calling for her head.
Nabiullina has said that she believes the fall in the ruble is "temporary" as it adjusts to the falling prices in oil, which are also "temporary" and she expects both to rebound next year. The plan was to keep the powder of hard currency reserves dry now, so that Russia could cope with the pain of long-term financial sanctions.
"This is a really high risk strategy from the CBR, and I think few global central bankers would buy into this one. The only thing I can think is what I have been saying for some weeks now, that FX reserves have been deemed mega strategic due to the geopolitical setting and to be conserved at all cost – while the CBR has also been told not to raise policy rates that much," says Ash.
Russia's heavy dependence on oil for budget revenues means that, now the ruble has become a freely floating currency since November, it is only natural for the ruble to recalibrate to the lower oil prices. The Brent oil price was just over $60 at the open of trading on the morning of December 16, but had dropped below this level by mid-morning. If oil loses about half its value, then so should the ruble. What traders and economist are objecting to is the fact that the CBR has not used some of its $416bn in forex reserves (down $4bn on the week last week) to smooth out the fall.
The danger is causing a panic. A crashing currency unsettles depositors, who rush to withdraw cash and destabilise the banking sector. Surprisingly, the crisis-hardened Russians have not panicked so far, as many have anticipated this devaluation, leading to soaring car and apartment purchases this year. But such a large movement could tip them over the edge. In the last two years both the Indian and Turkish central banks have faced similar crises, and massively hiked interest rates by hundreds of basis points to successfully quell fears and stave off potential bank runs.
The collapsing ruble will only hurt corporate Russia more. Underneath the currency crisis Russia has been suffering from a much more debilitating "investment crisis" – the instability means that Russia's business owners have halted investment plans and fixed investment was already falling this year, without which Russia has no chance of growth.
Banks are in a stronger position having already built up some $40bn in hard currency reserves in 2014 and so are better able to weather the storm. However, the high interest rates will kill their lending business, cutting them off from one of their main sources of income. It will also accelerate the accumulation of non-performing loans, which have been at modest levels in 2014 and are not an immediate threat to the system. But banks were already struggling to make profits in 2014, which were down by a quarter from the peak profits of over RUB1 trillion in 2012, and 2015 will be an even more difficult year for the sector.
Red lines
The generally accepted theory on the CBR's inaction is that the US/EU financial sanctions have been far more successful than Russia at first anticipated; with more than 1.8 years of hard currency reserves in the bank, Russian President Vladimir Putin calculated Russia could tough it out. However, now the CBR is called on to burn through about $10bn a week ,that cash pile doesn’t look quite as big.
The focus changed about two weeks ago at the CBR when it stopped intervening and allowed the ruble to sink unhindered as the hard currency reserves have become a "strategic resource". The CBR preferred to let the ruble slide so that it could keep its cash to support the banking sector and help cover an estimated $150bn of debt repayments that come due next year – mostly money owned by big state-owned corporations that have been cut off from refinancing their debt on the international capital markets by financial sanctions.
Oil prices fell to below $40 in 2009 and caused none of the panic that Russia is currently feeling. What scares everyone this time around is that oil prices could fall to $40 and stay there for at least a year. In 2009, low oil prices were seem as temporary and Russia's low debt levels reassured investors that it could borrow its way out of trouble if it really had to. Today, financial sanctions mean that Russia will have to rely entirely on its hard currency reserves and now no-one is expecting oil to return to $100 a barrel next year.
A debate has started on where the "red line" is for a fall in Russia's forex reserves; how far do they have to fall before Russia's financial system goes into meltdown? On paper, Russia should be fine, all other things being equal, until $60bn, or three months’ worth of import cover (and Ukraine's economy is currently defying gravity with half this amount of import cover).
The economist Anders Aslund suggested in a recent blog that Russia's reserves are actually $200bn of "useable money" and so a collapse could come even earlier, but as bne argued in a blog, this is an extreme view.
On December 16, the Association of Institution International Finance said the red line for Russia's hard currency reserves was at $330bn, whereas Charlie Robinson, chief economist at Renaissance Capital, said in a tweet, "We strongly disagree," pointing out that Russia still has $270bn of cash reserves and another $170bn in the two reserve funds, which should be more than adequate to support the ruble. The CBR's new policy of letting the ruble sink means that the money will last much longer.
Nabiullina has been betting that the oil price will stop falling soon and the price rebound to something like $70, bringing the ruble up with it. But that looks a lot less likely now and last night's rate hike suggests the CBR has caved into a new, much darker economic outlook.
Everything now depends on whether the oil price stabilises and at what level. There has been a lot of speculation that Opec members, and Saudi Arabia in particular, are happy to let oil prices fall in the short term to drive marginal US shale oil producers out of business. But the selloff is causing its own problems.
"Financial investors into oil have stop-loss positions which cause them to sell off their positions whenever the prices falls to certain levels," says one senior Russian fund manager, who has just been negotiating with Arab sovereign wealth funds. “What we are seeing now is several of these mandatory sell-offs being triggered, each one which drives oil down to the next trigger level.”
Contagion
Most worryingly, Russia's problems are starting to spread. Ukraine has been in deep trouble all year and it is now teetering on the edge of collapse; its hard currency reserves dipped below $10bn earlier this month, or about 1.3 months’ of import cover. The hryvna is down by some 40% since the start of the year and the only thing holding it up now is the promise of more international bailout money in the new year.
Kazakhstan devalued the tenge in February by 18%, but all the wiggle room it created has now been used up. Fears of another devaluation are mounting fast, as Kazakhstan's economy remains closely tied to Russia's as well as being a major oil exporter.
The falling currencies are no longer just hitting countries that are tied to Russia and the contagion is spreading out, leading some to start talking about a repeat of 1998 when oil prices fell to $10. Last week the Turkish lira sank to its lowest levels against the dollar for a year, despite the fact it is one of the big winners from falling oil prices, as it is heavily dependent on oil and gas imports. Likewise, China, another major energy importer. has watched its currency fall by 26% since May, and 7% since the end of October alone.
Collapsing currencies around the world, coupled with the "death spiral" of selling in the oil markets, is sparking worries that we are coming to the point where things could spin out of control – and not just for Russia.
Your numbers are off. BBC's Robert Peston estimates 10 months rather than 18.
http://www.bbc.co.uk/news/business-30491170
BBC ? Haha get a grip pussy . Only naive believes in Bullshit corp .
Yep.
Just spent how much on those 50 tons of gold.
That wasn't in rubles obviously.
Gonna pay those soldiers or not?
The IMF won't have that problem...
Time to SHORT RIPS, BITCHEZ!!!
closing deep in the red today
for the day of the fomc cometh as a thief in the night [/bitchez]
The Gods are meeting upon Mt Olympus!
Must.....Buy......Stawks....
THIS WAS ONE OF THE MOST MANIPULATED FUCKING PUMPS I HAVE EVER SEEN.
FROM DOWN 10 S&P PTS EARLY ON, UP TO PLUS 30 WITHOUT ANY FUCKING DOWNTICK ON THE WAY UP.
DEATH TO EVERY SINGLE FUCKING MONEY CHANGER OUT THERE, AND DEATH TO EVERY FUCKING BANKER!!!
FUCK THEM ALL, LET THE SYSTEM COLLAPSE ALREADY
O AND WHAT WOULD A FUCKING MANIPULATED BEYOND MANIPULATED RALLY IN THE FUCKING S&P BE WITHOUT SMASHING GOLD?
but id like to know what bitch made mother fucker downed u and for what LOGICAL reason..
just sayin.
prob someone who is not very smart and believes this market is totally free.
Or the Grammar Nazis who abhor all cap posts?
Probably a tribe member or three.
Sorry dude but S&P bounced right at the trend line. I wish I could post pics.
WTF ... my "up arrows" are registering as "down arrows"?
Diebold arrow voting system.
NSA approved!
I hear you, brother.
This is why we have to stop hoping it will ever change.
I think it's hopeless at this point. It really is unhealthy when you think about it.
I'm tired... really tired.
And FUCK the Pinko Commie Down Arrows---ya bunch of Socialist POS!
Once you recognize that the market is manipulated, maybe it's easier to play. Just saying. If Kensians have no intention of ever letting the market be an organic beast, then nothing short of global calamity will hold it down for long. After all, the Central Bankers can create capital from thin air and inject it wherever needed using any number of third party tricks or associaties. At least for now the game is rigged ... so play it that way.
God help us all if events transpire where not even the Kensian market master's manipulations can control market forces. Until then, if we've learned one thing it is Never Fight the Fed(s). It's like winding a giant spring though ... it will break one day.
It was global ramp job. The Spanish IBEX was up 400 pts in 3 hours on no news LOL
Algo.exe needs a virus scan.
Nowhere else to go if you can't trust cash or treasurys. S&P to 20k by the end of the week.
just like the October collapse in treasury yields (spike in prices) - they decide to turn off electronic trading and reverse market price discovery.
they = central banks
didn't work in october, won't work today.
yeah, ... the half life of these games are getting shorter
won't be long
Been wrong quite often since Oct 15, but yesterday I suggested the moves down to the 50/100 MA’s were a preplanned “arc of possibility” by algos, in which a worst case scenario is traced early in the week pre-FOMC before circling back to an ‘equilibrium’ level by Wed to wait for the minutes (I thought the 20 DMAs would be targeted). Though Kerry’s comments or some Russian minister will be cited, I think realizing it’s largely technical helps avoid ‘trading the news’ which, as for the recent “Greece is imploding” opening ramp, tends to end in tears in the post-HFT era. Yes, still early in the day, but the machines already seem to relaxin’, smoking a cigarette.
Now THAT was a face ripper.
and to think that 2 years from now, for certain, the dudley will be hired by a wall street firm and earn millions. late payment for a job well done.
a corrupt, shyster system.
Maybe he loses his head before then?
When will treasury yields sync back up with S&P? S&P up, long bond yields down. How long can this continue?
Wow! What a huge fucking suprise!
The un-FED's moto has always been since 1913... "We do what the fuck we want, when we want and there is not one damn thing you can do about it"
AKA Don't fight the fed.
Nobody wants to be short during a fed meeting. This is a typical pre-fed announcement trade. Like I said earlier, there will be no big money made on the downside, old Yeller will rip your face off and then bake you a cookie to make you feel better.
i hope its at least a chocolate chip cookie that she bakes us, bc then that may make me feel better
I think a monster cookie is more fitting.
mmmmm. I'm hungry.
We are now beyond managed markets, and in an era where the global financial markets are being used by the syndicate CB cartel as weapons to further the aspirations of the Rothschild's ZWO.
This is to the detriment of every person on the planet including the brain dead hasbara cheerleading squad.
Within a decade [if they continue to be successful], we will have 50 men with more wealth than the rest of the planet combined, and we will all be living as serfs [which ironically is the ZWO agenda realized].
Putin is one of those 50 men, ALL these fucking cocksuckers are in on it.
The FED is ready to gut another chicken and make a pronouncement based on the condition and shape of the entrails....
KY jelly bitches, its needed.
some folks manipulated some 'markets'
Everyone is under the impression they can keep intervening like this...they can..but eventually it will no longer matter..like for example if Russia decides after passege of the "Lethal Aid" package to roll Ukraine. Russia does not threaten they simply act and he is well aware of the economic warfare these NWO clowns are trying to wage against him...Should be a frightening week.
The 'Christmas' war.........
And...the Great Gas-Bag bubble of stock market panic buying floats ever higher, on the wings of gods and central bank puts...so glorious it blots out the sun. The skies are so blue - you can see forever! And the media clapped. And the public cheered. It really IS Austin Powers' "consequence-free environment"!
Fed action in the markets. Wait until they get the opportunity to bail out/in $300 T in derivatives. Now that's going to be entertaining.
I've been scotched so many times I don't even care what unnatural behaviour the markets care to bare but this...this just makes me so sad for the furture. Americans won't tolerate serfdom for too very long before it gets bloody. The peasant will do the bleeding but in the end... All the while it's our kids taking the brunt of the unpleasantness.
http://finviz.com/futures_charts.ashx?t=ES&p=h1
Same shit different day, orderly decline.
.... Look at the chart, take back the down arrow, have a nice day, enjoy the Fairy Dust a while longer.
it's not often you see indexes go exponential ...
I used to cheer for collapse, but recently, I've begun to understand the fraud and profit from it, so I hope they keep some level of manipulation for another 6-18 months.
Buying silver on 0% interest offers from various TBTF banks, some out to June 2016, so I'm thinking rates go nowhere - except maybe down - for a while.
What is the definition of a market, can these 'markets even be considered 'markets' anymore?
Buy the silver, Vlad, like I told ya a couple months ago.
C'mon, you know you want to.
You see the huge swings to manipulate retail traders. HFT needs volatility to suck in the most capital to both the upside and downside.