One-In-A-Billion "Hiccups" Are Happening All The Time, Citi Warns Something Is Wrong

Tyler Durden's picture

Earlier this year JP Morgan’s letter to shareholders, Jamie Dimon let it slip that there are some very disturbing things going on in today’s capital markets. Prices can gap in illiquid markets, Dimon explained, and that has the very real potential to spark a panic, causing illiquidity to spread to previously liquid markets. Dimon warned that one should not be fooled by relatively tight bid-asks; it’s market depth tells the true story, and as JP Morgan’s Nikolaos Panigirtzoglou will tell you, some markets (the Treasury market for instance) are getting quite thin indeed. 

The dangers associated with a widespread lack of market depth are of course exacerbated by the presence of HFTs. This was on full display during last October’s Treasury flash crash. Here’s what Dimon had to say on the subject: "..then on one day, October 15, 2014, Treasury securities moved 40 basis points, statistically 7 to 8 standard deviations– an unprecedented move – an event that is supposed to happen only once in every 3 billion years or so." "Some currencies recently have had similar large moves," Dimon added, referencing the carnage that accompanied the SNB’s abandonment of the euro peg in January (as well as countless other flash crashes and rips) and presaging precisely what we’ve seen this week on the heels of China’s move to devalue the yuan. 

The takeaway from all of this is not, as Dimon concluded, that statistics can’t be trusted, but rather that when things that are supposed to happen once every 3 billion years start happening once every three months, or every three weeks, then something is definitively broken. 

Here, courtesy of Citi’s Matt King, is a look at some of the major one in a billion year events that have taken place over the last four years:

As King notes, either there’s a "widespread case of the hiccups", or something else is very, very wrong.

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BellevueTrader's picture

Just a 'normal market'...what could possibly happen?!?

junction's picture

There is a world outside the stock markets.  More horrible news from the Middle East.  As President For Life Obama was ordering the military to "accidentally" drop weapons to ISIS, the ISIS leader, al-Baghdadi, was using his U.S. hostage Kayla Mueller as a sex slave, repeatedly raping her until she somehow died, probably murdered by al-Baghdadi.  The FBI knew about her treatment but they had their orders, from one of Obama's NWO flunkies, to keep silent as Obama pushed to supply "moderate" terrorists with U.S. weaponry to take over Syria.  At pressent, none dare call Obama's actions in Syria treason.


 ---  Washington Post (15Aug2015)The leader of the Islamic State personally kept a 26-year-old American woman as a hostage and raped her repeatedly, according to U.S. officials and her family. The family of Kayla Mueller said in an interview Friday that the FBI had informed them that the emir of the self-proclaimed Islamic State, Abu Bakr al-Baghdadi, had sexually abused their daughter, a humanitarian worker. Mueller’s parents said the FBI first spoke to the family about the sexual assault in June and provided more details approximately two weeks ago. The bureau pieced together what happened to the American from interviews with other hostages and the captured wife of a senior Islamic State figure. The FBI also told the Muellers that their daughter was tortured. “June was hard for me,” said Marsha Mueller, Kayla’s mother. “I was really upset with what I heard.” News of Baghdadi’s involvement with Mueller, who is from Prescott, Ariz., was first reported Friday by the Independent, a London newspaper.

Winston Churchill's picture

Yeah,yeah, yeah.But all we wan't to know is how many lampshades did her skin make ?

Are you really that dumb you believe that crap ?

It comes from the same genre as boiling Belgian nuns to make soap.The lies are designed to

get an emotional response bypassing logic.Seems to have worked in your case.

Amish Hacker's picture

You mean like when the Iraqi monsters tore the Kuwaiti babies from their incubators?

BeanusCountus's picture

ABC News said it wasn't true? Now I'm on the fence (sarc). I'm withholding judgment on this issue until I hear from Becky Quick.

gonetogalt's picture

People here in Prescott are damn interested.

Save_America1st's picture

gee, is something wrong?

Hmmmm...let me ask my shiny precious if anything is wrong...

Shiny stack says, "Nope...nothing wrong here."...

must be some other bitchez with problems. 

We're all good with our stack.

ilion's picture

Tickmill's head of China said that we could expect a rate cut from PBOC this weekend or the next one. Japan will most likely introduce a new QE program next Thursday as the BOJ meets to devalue Yen. Big moves ahead guys and don't go against the trend!

Richard Whitney's picture

When GHW Bush was having cold feet about acting against Iraq, the British sent the Archbishop of Cantebury to persuade him to get the United States to oppose the annexation of Kuwait.

Bush was mostly undecided, and conflicted, about using U.S. force. So the Archbishop handed Bush photos of Iraqi soldiers with Kuwaiti babies on their bayonets. 

SameAsItEverWas's picture

Iraqi soldiers with Kuwaiti babies on their bayonets. 

Just like the Belgian babies on German bayonets, huh?

Socratic Dog's picture

I'm sure GHW Bush would be a very hard sell for going to war in the Middle East.  Such a moral, upright man.  OK, the odd slip up, like running drug and arms smuggling rings and being involved in the assasination of a president, but a real Mercan boy.

What a bunch of bullshit.

Bay of Pigs's picture

No kidding. Some of the comments here lately at ZH are out of the Twilight Zone when it comes to truthfulness or accuracy.

SoDamnMad's picture

Thanks Amish Hacker

Now I have learned Merica learned Makirovka much earlier than I realized. Kind of like the Ukies crucifying a young boy at a street-square that doesn't exist.

MSimon's picture

Also posted way below:


In Islam captured infidels are property. Property can not be raped. The story is a lie.

BarkingCat's picture

Stupid bleeding heart idealist got to learn the hard way that the world is a very cruel place.
I don't blame her because she was a victim.
The blame falls on those who filled her head with these stupid ideas.
Her parents are likely part of that influence.

LetThemEatRand's picture

I think we can all agree that the world is a very cruel place.  I disagree that it is a "stupid liberal idea" to try to change that and help people.   I also suspect that many here who consider themselves conservative (especially those who are also religious) would disagree that humanitarian efforts are stupid and that those who put themselves in harm's way to help others only get what's coming to them if they meet harm.

And of course the whole story is probably bullshit anyway.

Winston Churchill's picture

Really. Even the FBI would not tell a grieving family that, unless it was a lie for

a bigger(evil) purpose.

LetThemEatRand's picture

Just think of what an evil MF'r you need to be to tell a mother that her daughter was raped and tortured so that the news will hit the interwebs and help convince the public that we need moar war.   

Winston Churchill's picture

Shame we don't have his name.We could lock him up with Bubba so he could receive the

same supposed treatment.

Cadavre's picture

Maybe the market indexes reflect, not so much the relative  value of a sovereigns industrial worth, but, instead, the inverse indexing of the relative strength of the the globes most available commodity, sovereign currencies?

Deathrips's picture

Calm the fuck down, this kinda shit happens all the time.....





Uber Vandal's picture

Herein lies a problem with the whole thing (While acknowledging point above of Rips and others:

Even when the evil doer is brought to justice one way or another, (Retribution from the universe can be a brutal bitch); the victim still has to live with what happened to them.

And, quite often, much like with roaches, there is usually not just one victim.


gonetogalt's picture

Here's a little insight into the rape story...

(My hyperlinker blewup, paste it)


Superdave532's picture

I hope you get the opportunity to learn next. Soulless fuck. 

bunnyswanson's picture

Israeli jailed 6 months for burning baby and father to death, Palestinians jailed 20 years for throwing stones!

Socratic Dog's picture

True justice, the wisdom of Solomon shown there.

Why do people get more upset about a raped woman who put herself in harms way than a father and his baby burned to death?  Wouldn't be because Mercan lives matter, would it?

EurGold's picture
EurGold (not verified) junction Aug 15, 2015 3:03 AM

We've noticed a massive spike in silver sales this week...

dimwitted economist's picture

Nothing wrong... it's just the New Normal.

Slomotrainwreck's picture

They're just, whatchamacallit? Yeah, Fukushima moments.


They wil be forgotten soon.

stocktivity's picture

Odd coming out of Jamie since he's one of the ones who broke the system.

Fukushima Fricassee's picture
Fukushima Fricassee (not verified) BellevueTrader Aug 14, 2015 10:09 PM

Jimmy Carter will be going to hell any day now, perhaps a lot of these fuckers couild quickly join him.

max2205's picture

It would be boring without the snfus 

Spigot's picture

" One-In-A-Billion "Hiccups" Are Happening All The Time, Citi Warns Something Is Wrong "

Yeah, your models are broken, that is what is wrong. Your staff of thousands of highly paid, utterly incompetent, fuck bunnies are incapable of formulating any other models than the broken ones you still use to screw your clients. And now the raw, hard data are casting a horrific light on your lies. You can't stand it, so you say "Something is Wrong".



Central Bankster's picture

Bottom line is their models are just plain wrong.  I don't disagree that these are statistically improbable events in a marketplace, but its obvious that the models aren't able to compensate for a centrally planned (rigged) market.  acknowledge models don't work and call for an end to central planning.  That is all.

Central Bankster's picture

Just another thought, but maybe the "irrational" markets aren't as irrational as they appear.  I mean, if you think about it, perhaps these are just simply the animal spirits one should expect before hyper-inflationary event.  I mean why is it so hard to believe that a stock can go up 500%, drop 70-90% in a 5 year period, if ultimately this stock is gonnna be up 5,000% and the currency is gonna lose 99+% over a 10-20 year period?  I mean, to me this shit is starting to seem normal and expected.

TheFutureReset's picture

Right. The markets only appear irrational with these huge moves, because the fundamental measurements are so off. The weird existence defined by fiat currency is jacked up. Physics, chemistry, math, and logic can't be applied to a fiat world, like it can with a gold world. It's no wonder that statistics can't be applied either. Expect more. 

Farqued Up's picture

Why, it's the Ivy League exceptional education.

buzzsaw99's picture

the treasury market is thin lulz

Goldman watch, Dimon ring,

I ain't missin' not a single thing.

White House cuff links, stick pin,

When I step out I'm gonna do you in.

They come runnin' just as fast as they can

'Cause algoz go crazy 'bout a sharp dressed man.

Top coat, top hat,

I don't worry 'cause my wallet's phat.

Black shades, white gloves,

Lookin' sharp and lookin' for love.

They come runnin' just as fast as they can

'Cause algoz crazy 'bout a sharp dressed man.

ThroxxOfVron's picture

This is what happens when natural mean reversion is defied.

It works until it doesn't for one reason or another and fractal mathmatics reasserts itself.

Taleb would laugh at this shit -and place an 'outlier' bet.

Taleb et. al.'s lives won't be 'millions of years'; but some of their bets pay off -which simple means that their math is more realistic in practice due to their accounting for the insistence of interventionism specifically and the unaccounted fractal geometric instabilites in market behaviors in general...

eatthebanksters's picture

wow, I gotta stop smoking so much of this shit....I almost understand what you are saying...

logicalman's picture

Maybe if you smoked more???

Just a thought.

Mintcoin's picture

Just push it moar! Let's see, 10+ standard deviations becomes normal, so now we need 50+ standard deviations. Nothing to see here, just normal chart building. 

cpnscarlet's picture

Oh,  yeah, sure...Dimon has no idea where these 6,7,8 sigma events are coming from.

I think it's not too much of a conspiracy stretch to speculate that he's one of the FED flunkies causing these events, and all of it - just to make the dollar look good.

I'll keep asking the trillion dollar question - "Who dumps billions in notional gold at illiquid times in the market when they would be trying (ya think) to get the best price for their assets/property/security?" SEC? FED? CFTC? Anyone?

tc06rtw's picture

 …  calm down,  EVERYONE !

     China  promises  they’ll bail us ALL out !


FrankieGoesToHollywood's picture

Their models are wrong.  These are the same guys who said property values could not decrease and intrest rates couldnt go negative.  Subprime is contained.  125% mortgages are a good thing.  Student debt is managable and you need to spend more money to keep from going broke. 

garbage in, garbage out.  There is something wrong but citi has zero credibility for predicting it.

LetThemEatRand's picture

It's kind of like saying that Joe's odds of being hit by lightning are very low, and then creating a lightning machine and turning it on Joe.  Then writing an article about how unlikely it was that Joe was hit by lightning, and that it must mean something (while not mentioning that you built a lightning machine and hit Joe with it).