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Stocks Up, Bonds Up, VIX Up, Dollar Up, & Oil Up; Time's Up, Fed's Up

Tyler Durden's picture




 

Despite the strength of the bullishness in stocks today, US equities have told us that they "self-identify as bears"...

Yeah that just happened...

 

The March FOMC saw the same "buy everything" idiocy... that did not end well for stocks...

 

As liquidity disappeared and traders focused on tomorrow's Fed, sparking a total meltup in stocks (NOT driven by Greece - the comments were actually bad, NOT driven by US housing data - we were already well on our way by them, and NOT driven by any great rotation)...

 

On the day, Trannies remained red as the rest all grouped together...again seeming to stall after EU Close...

 

Cash indices managed to get green... because why wouldn't you be a net buyer of stocks ahead of FOMC and Grexit uncertainty...but the mahicns took profits in the last few minutes leaving us red for the week... Trannies refuse to play along from the start

 

Healthcare is dragging the rest higher on the back of M&A hope...

 

For June, Small Caps are surging 2% but Nasdaq, S&P and Dow are all red still...

 

Stock protection was bid - VIX dropped on the day but as is clear, protection is well bid relative to the algo-driven exuberance in stocks...

 

and credit protection was bid...

 

Treasury yields all tumbled today...

 

As The Dollar strengthened (led by EUR weakness)...notice a pattern here?

 

Crude managed gains as copper, gold, and silver dropped...

 

Copper clubbed like a baby seal was a standout...dumping to 3 month lows...

 

It appears - based on the surge in US and EU stocks and European peripheral bonds today - that the Plunge Protection Team was hard at work proving Grexit was not contagious and that the status quo is maintained.

Charts: Bloomberg

Bonus Chart: Avalanche Biotech... [INSERT YOUR OWN PUN]

 

Bonus Bonus Chart: One enterprising chap has a 'final solution' for The Greeks...

 

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Tue, 06/16/2015 - 16:10 | 6203134 FinalEvent
FinalEvent's picture

I know what went down, bitches

Tue, 06/16/2015 - 17:31 | 6203378 mt paul
mt paul's picture

up, is the new down..

Tue, 06/16/2015 - 16:10 | 6203136 Anasteus
Anasteus's picture

"Stocks Up, Bonds Up, VIX Up, Dollar Up, & Oil Up; Time's Up, Fed's Up"

Fed up

Tue, 06/16/2015 - 16:45 | 6203235 dwiener
dwiener's picture

donald trump

Tue, 06/16/2015 - 20:19 | 6203916 old naughty
old naughty's picture

what go up, must...

 

implicitly !

Tue, 06/16/2015 - 16:11 | 6203138 kaiserhoff
kaiserhoff's picture

OT but hysterical;)

New Dim Poll

Hillary 41%

Bernie Sanders 31%

That's like losing to Beelzebub, like losing to a pile of dog shit.

You go grrrrl.

Tue, 06/16/2015 - 16:11 | 6203140 post turtle saver
post turtle saver's picture

you guys chart this stuff like it matters... it doesn't

Tue, 06/16/2015 - 16:12 | 6203141 Traderone
Traderone's picture

Well waddyaknow, the futures trap below yesterdays low in the European session and then rally a full 20 pts before realising they left some folks back at VWAP so they dutifullly obliged by falling 8 pts to allow their 'friends' on board and then taking us into the stratosphere , 23 ES pts from high to low and finishing on the highs. 

Tue, 06/16/2015 - 16:12 | 6203144 Bighorn_100b
Bighorn_100b's picture

Only people that know the outcome will sleep tonight. I'm down so much in the miners I don't care anymore. I keep throwing good money into it. Whatever, better than having it in a savings account.

Tue, 06/16/2015 - 16:16 | 6203152 Bastiat
Bastiat's picture

You're likely very smart to keep throwing money into it -- I can't bring myself to do it.

Tue, 06/16/2015 - 16:22 | 6203165 Bighorn_100b
Bighorn_100b's picture

It's easy, I keep buying every dollar down. GDX @ $20.00, $19.00, waiting for $18.00. Then $17.00. You get where I'm coming from.

Tue, 06/16/2015 - 16:24 | 6203174 Automatic Choke
Automatic Choke's picture

I alternate between throwing more at the miners (speculation) and buying more metal to stack (more like a long term CD).  Whenever one makes me anxious, I just look at the other.....

Tue, 06/16/2015 - 16:32 | 6203193 Bighorn_100b
Bighorn_100b's picture

13 tubes of AE (BU), 1 AE Gold (BU), 1 Buffalo mint. Plus my wife's collection. Double mine, she's the collector. To bad I'll die first.

Tue, 06/16/2015 - 16:42 | 6203222 Bunghole
Bunghole's picture

While I commend the stacking, I dont pay a premium for BU coins.

1 oz Perth Mint Au bars and 10 oz Silvertowne Ag bars.

Tue, 06/16/2015 - 17:33 | 6203384 mt paul
mt paul's picture

Do you own a boat....

Tue, 06/16/2015 - 16:26 | 6203180 who cares
who cares's picture

Doing the same and, as you say, the more we go forward the more I am convinced that's the right way to do.

Tue, 06/16/2015 - 16:15 | 6203151 Rainman
Rainman's picture

They ever catch the inside dude front running FOMC minutes to the boyz ? I didn't think so..... oh well, just 10 trading days to the 2/20 .

Tue, 06/16/2015 - 16:16 | 6203153 Keltner Channel Surf
Keltner Channel Surf's picture

“Fed Fatale”      from “Femme Fatale”     by the Velvet Underground & Nico

Here she comes, you better watch your shorts
She's going to break your account in two, it's true

It's not hard to recognize
Just look into her dove-colored eyes
If she says “lift-off”
She’s just messing around, what a clown
'Cause everybody knows

She’s a Fed fatale
Just like an autumn breeze
She’ll shake bears from the trees
See the way her talks
Clear the way for stocks

You're not Top-of-the-Book
You're Number 37, have a look
But if she just smiles, you’ll be taken down
Big rebound

Little bear, she owns the Street
Before you short, you're already beat
She’s got big players in dark pools, yes, it’s true
'Cause everybody knows

She's a Fed fatale
And bull traps come in threes
But she holds all the keys
To open any lock
I don’t suppose you’re shocked
'Cause everybody knows 

She’s a Fed fatale
She’ll fling the hawks some cheese 
Then start another squeeze
Oh, ooh-ohh

Tue, 06/16/2015 - 16:24 | 6203162 adr
adr's picture

Look at everything trade like a penny stock.

Gasoline is now $2.99 a gallon near me. I wonder how long they will keep it below $3.00 just because.

There is going to be big problem soon when gas is going to be more expensive than last year with oil $20 below where it was.

Are we really going to be paying more for gas in July '15 than July '14?

Tue, 06/16/2015 - 16:22 | 6203166 philosophers bone
philosophers bone's picture

Fucked Up.

Tue, 06/16/2015 - 16:24 | 6203172 JoeTurner
JoeTurner's picture

Is it just me or do the market seems like a group of retarded kids flicking lighted matches at a giant pile of gas cans...."YYYYYYEEEEAAAAHHH, it not blow up !!!" (goofy smile)

Tue, 06/16/2015 - 16:26 | 6203177 small towel
small towel's picture

Why dont the market-riggers worry about the Trannies giving the game away?

Tue, 06/16/2015 - 17:35 | 6203390 mt paul
mt paul's picture

what did bruce gender do now..

Tue, 06/16/2015 - 16:26 | 6203178 Rainman
Rainman's picture

Avalanche IPO @17, run up to 60, back down to 17 . Avalanche.

                 http://www.marketwatch.com/story/avalanche-biotechs-stock-loses-half-its-value-after-trial-results-raise-concerns-2015-06-16

Tue, 06/16/2015 - 16:30 | 6203181 Kaiser Sousa
Kaiser Sousa's picture

nice to know that Blackrock is the owner of that apartment in Berkley that collapsed on the those Irish exchange students killing 8....

hope they sue the shit out of those mother fuckers.....

Tue, 06/16/2015 - 16:44 | 6203229 Chad_the_short_...
Chad_the_short_seller's picture

Ummmmm......... NO, the vix was not up today. It got smashed 4%.

Tue, 06/16/2015 - 20:55 | 6204031 polo007
polo007's picture

According to Bank of America Merrill Lynch:

http://personal.crocodoc.com/AwP30H2

The Fed and income inequality

Don’t stop ‘til you get it on

Critics of the Fed argue that by stimulating asset markets easy Fed policy is benefiting upper income families, but not helping people who do not own assets. In reality, the biggest impact of easy Fed policy is to speed the drop in the share of the population that are unemployed and hence have zero labor income—the most pernicious instance of inequality. The Fed cannot fix the long-run trend toward income inequality, but it can reverse the recession-induced increase by ensuring a full recovery in the job market, normal wage growth and then—and only then—a return to normal interest rates.

Reverse Robin Hood

Critics of Fed policy have offered an ever evolving list of complaints: the Fed is risking runaway inflation, a collapse in the dollar, massive asset bubbles, and damaging people on interest income. The latest: the Fed is causing income inequality. Fed has caused a big stimulus to asset markets, but no real stimulus to the economy. Hence, the only beneficiaries of Fed policy have been upper income families with large asset holdings, leaving the average Joe behind. The Fed should normalize policy ASAP.

Ben blogs back

The latest counter argument comes from Ben Bernanke’s blog and several papers from Brookings. Bernanke points out that widening inequality is a very long-run trend and the impact of monetary policy is small and ambiguous. Easy policy does stimulate asset markets, favoring the rich, but this is more than offset by the stimulus to the labor market. Easy policy also benefits the middle class by raising asset values for the 60% of families that own their own home. Finally, by pushing up inflation Fed policy benefits debtors—lowering real repayment costs—over creditors, and debtors tend to have lower income than creditors.

Cutting off your nose to spite your face

In our view, if anything, Bernanke is being too generous to his critics. There are two big stories at play. First, monetary policy doesn’t push the economy back to full employment by magic; it does it by stimulating asset markets, bank lending and confidence. Hence, monetary policy cannot stimulate growth without rewarding asset holders. (By contrast, fiscal policy can target low income people.) Moreover, in each business cycle, the profit share of income surges at the start of the recovery and then fades in the second half of the recovery as the unemployment rate drops and workers acquire wage negotiating power (Chart 1). Advocates of an early Fed exit are in effect telling the Fed: “stop trying to get the economy to the second stage of the business cycle recovery when profit growth slows and wages accelerate.”

The second even bigger story here is that there is no better way to reverse a cyclical deterioration in income distribution than to quickly restore full employment. Unemployed people by definition have no labor income and rely purely on government help or investment income. Hence, in most cases, unemployment pushes workers into the bottom of the income distribution. Thus, the main cause of the cyclical increase in income inequality was not that wages were weak relative to investment income, but rather that the unemployment rate surged from 4.4% in mid-2007 to a peak of 10.0% in October 2009. The reversal back to 5.4% means 4.6% of people actively looking for a job are no longer earning zero labor income.

Taking this a step further, the cyclical drop in the unemployment rate—as always—has disproportionately benefited disadvantaged groups (Table 1). The unemployment rate for teens has dropped more than for prime age workers, rates for Blacks and Hispanics have dropped more than for Whites and Asians, and rates for people with a high school degree or less have dropped more than those with a college diploma. The share of workers in part-time jobs has dropped and the share of long-term unemployed has also dropped. These disadvantaged groups are still worse off than the average person, but the gap has shrunk back toward more normal levels. Why would the Fed want to abort this process?

Wed, 06/17/2015 - 01:07 | 6204576 polo007
polo007's picture

According to the International Monetary Fund:

http://www.imf.org/external/pubs/ft/sdn/2015/sdn1513.pdf

Causes and Consequences of Income Inequality: A Global Perspective

EXECUTIVE SUMMARY

We should measure the health of our society not at its apex, but at its base.” Andrew Jackson

Widening income inequality is the defining challenge of our time. In advanced economies, the gap between the rich and poor is at its highest level in decades. Inequality trends have been more mixed in emerging markets and developing countries (EMDCsf), with some countries experiencing declining inequality, but pervasive inequities in access to education, health care, and finance remain. Not surprisingly then, the extent of inequality, its drivers, and what to do about it have become some of the most hotly debated issues by policymakers and researchers alike. Against this background, the objective of this paper is two-fold.

First, we show why policymakers need to focus on the poor and the middle class. Earlier IMF work has shown that income inequality matters for growth and its sustainability. Our analysis suggests that the income distribution itself matters for growth as well. Specifically, if the income share of the top 20 percent (the rich) increases, then GDP growth actually declines over the medium term, suggesting that the benefits do not trickle down. In contrast, an increase in the income share of the bottom 20 percent (the poor) is associated with higher GDP growth. The poor and the middle class matter the most for growth via a number of interrelated economic, social, and political channels.

Second, we investigate what explains the divergent trends in inequality developments across advanced economies and EMDCs, with a particular focus on the poor and the middle class. While most existing studies have focused on advanced countries and looked at the drivers of the Gini coefficient and the income of the rich, this study explores a more diverse group of countries and pays particular attention to the income shares of the poor and the middle class—the main engines of growth. Our analysis suggests that

- Technological progress and the resulting rise in the skill premium (positives for growth and productivity) and the decline of some labor market institutions have contributed to inequality in both advanced economies and EMDCs. Globalization has played a smaller but reinforcing role. Interestingly, we find that rising skill premium is associated with widening income disparities in advanced countries, while financial deepening is associated with rising inequality in EMDCs, suggesting scope for policies that promote financial inclusion.

- Policies that focus on the poor and the middle class can mitigate inequality. Irrespective of the level of economic development, better access to education and health care and well-targeted social policies, while ensuring that labor market institutions do not excessively penalize the poor, can help raise the income share for the poor and the middle class.

- There is no one-size-fits-all approach to tackling inequality. The nature of appropriate policies depends on the underlying drivers and country-specific policy and institutional settings. In advanced economies, policies should focus on reforms to increase human capital and skills, coupled with making tax systems more progressive. In EMDCs, ensuring financial deepening is accompanied with greater financial inclusion and creating incentives for lowering informality would be important. More generally, complementarities between growth and income equality objectives suggest that policies aimed at raising average living standards can also influence the distribution of income and ensure a more inclusive prosperity.

Wed, 06/17/2015 - 02:07 | 6204648 polo007
polo007's picture

According to Natixis:

http://cib.natixis.com/flushdoc.aspx?id=85583

Public debt ratios must be reduced, but how?

The high level of public debt is a permanent threat to growth: if interest rates rise, rapid tax increases or government spending cuts would be needed, with the risk of creating tax distortions and reducing potential growth. This threat may also drive private economic agents to build up precautionary savings.

It would therefore be very positive to reduce public debt ratios, but how?

- By keeping long-term interest rates lower than nominal growth, although this reduces the public debt ratio extremely slowly. In addition, it is dangerous from a financial stability point of view and may generate negative incentive effects;

- By monetising the public debt, i.e. by transferring it to the central bank’s balance sheet, and by cancelling it (actually or de facto); but one must then accept the risks linked to chronic excess monetary creation;

- By considerably extending the maturity of the public debt, by replacing it with bonds with a very long maturity (50 years, 100 years, perpetuity), by taking advantage of the very low level of long-term interest rates. This would considerably reduce the interest rate risk weighing on the public debt. The criticism often levelled against this method is that it shifts the burden of repayment to future generations;

- A more original approach: by cancelling the part of the public debt held by residents; there is then de facto neutrality: on the one hand, the residents receive interest on the government bonds they hold and, on the other hand, they pay taxes that finance the interest on these bonds. The cancellation of the debt eliminates both the interest on the debt held domestically and the taxes that finance it, resulting in macroeconomic profitability. The redistributive effects of this debt cancellation will still have to be corrected, which is possible. We obviously know that this possibility will never be used.

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