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The Fun-Durr-Mental Reason Stocks Are Up This Morning (In 1 Chart)
Since we now see the China rate cut exuberance fading fast, we thought it worth reminding 'investors' what is really driving the overnight ramp. It's not the economy, it's The BoJ stupid...
As USDJPY returned to the scene of its crimes yeaterday in a big stop run...
Charts: Blomberg
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Nice to hear from the BOJ again......what's it been.......like 20 years or so?
They should hold a press conference....like the cool people at the EU do.
And repeat after me, " We will do whatever it takes"
Too late..
Cramer is all gloating this morning, probably patting himself on the back on reversing the markets.
Yesterday he blames the machines on the move down and that it didnt reflect fundamentals. So today's premarket spike isnt because of the algos? Oh its based on fundamental? This Jew just dont know when to shut the fuck up.
Also by calling the members of the PBOC clowns and idiots this morning will not go very well with the Chinese.
I wonder how many shares of AAPL the CB's own now.
If you're not confused, you don't know what's going on.
If you don't read the newspaper you are uninformed. If you do read the newspaper you are misinformed.
- Mark Twain
There are three kinds of lies: lies, damned lies, and statistics.
update to four kinds: "and central bank statements"
Aren't those just a combination of the first three?
Uhh Durrrrr.
yep muh muh muh my kuroda...
Feels like the USDJPY has been hovering right around 120 since forever.
We should change the "market's" currency to Yen to make it easier on Kuroda
Or the Japanese could just abandon the JPY and start printing and pricing in USD.
Everyone else is.....
Who gives a fuck about this morning?
The long term trand is up for US equities.
Nothing has changed.
Actually we're about 750 points short of a long term bull market in the dow futures right now (Where's that DOW 17K hat???).
The long term trand is up for US equities.
I hear the grape koolaid is particularly excellent this morning.
I did not know that someone actually escaped from Jonestown before drinking the Kool-Aid...Does the world know that there is a survivor here at ZH?
Actually Leslie Wagner-Wilson, among a small group, escaped the night before. Worth a read and a listen: http://binnallofamerica.com/boaa052015.html
The US is at war with China for control of the financial markets.
Inside that context, the US is enforcing protectionismism in US markets.
If you don't understand the big picture, you're a dead short.
Good luck.
If I was a few years younger, and still a banker with tons of OPM, I would should short this fucking uptick fully levered, and by late lunch time today I would either be starting happy hour at the club, before taking the rest of the week off to party in Asia, or getting chewed out by my boss before taking the rest of the week off to focus on my other responsibility at work.
The big picture is a very long timeline, and we're 750 points short now. To change that picture the CBs need to successfully drive F/X flows in one of two vectors, neither involves China- that is a separate, but interconnected game.
Can you break this down for us "never has been" professional traders?
Every institution has their own specific TA voodoo recipe for identifying long term direction (which is what makes BTFD work in any bull market, or its inverse work in any bear market). Just about every serious model late last weak or early this week turned from bull to bear in regards to US equities (my particular cult subscribes to the 20 month moving average for US equities, because the back testing holds up over up over 100 years, with the one exception of the intra-day flash crash a few years ago, and my cult also believes in keeping it simple, except when we don't, but we have other models for that). A prerequisite of herding cultish cats (i.e. manipulation) in the equity market and driving that market higher is to undo the voodoo damage (quickly) before a bear market becomes a self fulfilling prophecy.
The bond markets are much larger than the equity markets and the F/X markets are much larger than the bond markets (but both the bond and F/X markets are derivatives of interest rate differentials, which is why interest rate derivatives are the biggest component of the quadrillion plus derivatives market. When US equities tanked yesterday- USD tanked and flow shifted into EUR and JPY (the only two other currencies big enough to matter, since CNY is nominally pegged to USD). EUR was up over 3% intraday (which is an INSANE move). Today, instead of US equities being down 1000 in premarket, they are up 500 and EUR is down 1.5%, while the JPY move is about 1% or half of yesterdays.
So while dumping money into S&P futures can work for tactical and short term "manipulation" the tool of CB choice for more strategic and long term "manipulation" (or when they NEED a lot of movement quickly) is to manipulate F/X flows through both actual interest rate differentials or future expectations, often oversimplified as carry trades on CNBS.
An earthquake by that nuke plant in Japan or shortened intermission before the next act of Greek Tragicomedy would make both Jack Lew and Janet Yellen very happy this week.
That's the problem. We've had a long bull market and there's a bunch of people walking around that think they are trading geniuses when in fact they're fucking retards like Chuuuuuck Knoblock.
Thanks for the detail, I'm getting my head around the mechanics of the F/X flows. So yesterday the market changes, flows of currency are traded out of the US market and into EUR and JPY, and to counter this CBs manipulate the interest rates, because the currency market is MUCH larger than the equity/bond markets?
So this means manipulation of the exchange rates based on the cost CBs charge to borrow, either now or expected costs in the future? And is this directly related to their trading bonds for cash/cash for bonds, or is there another mechanism?
It can be related to interest official interest rates or expected changes to them, less often their market trading operations, but someone could write a 26-volume encyclopedia on their entire tool chest. Take last the couple weeks for example USD has been rising both because of the worldwide bloodbath in emerging markets (fear/flight to quality) and the expectation that the FED would raise rates in September (greed), so institutions were positioning in USD-denominated instruments now.
It is socially unacceptable to point out that the FRBNY trading desk is literally on the phone (or IM) all day, every day with the major US banks, and then when there is undesired volatility... the executives start talking by phone pre- and post- market hours (and every central bank does this with their members. It's not just unacceptable but verboten to discus the content of those discussions (manipulations) but the Central Bank can jawbone in ways that are never seen on CNBS from soft sell ("psst... in light of recent events our thinking is that it will be December at the earliest before we raise rates...") to hard sell ("Jamie... Buy American! today, or you can wear Clarence Beek's gorilla costume while we fuck you worse than Dick Fuld" probably not as scary coming from Yellen or Dudley as Hank, but I digress). We'll never know exactly what was said Sunday night and Monday morning, unless Congress actually grows a pair and launches a real investigation.
If it's really bad then they have a face-to-face conclave and pass around a hat and open up swap lines (LTCM, as long as people are making comps to '98, or the Plaza Accord in '85 which set the stage for both LTCM and Japan's lost decades and the Nikkei high that hasn't been matched in over 20 years).
Thanks again man! I wish I had gotten a real education from someone like you when I was just starting out. I see numbers very well, but I'm not as day to day street smart. The butt buddy relationships enjoyed by the heads of the major banks and CBs just seems so unnatural to me that I don't conceive of it properly.
BTW, I like being socially unacceptable and try to be at every opportunity. But I just feel dirty after learning about that which is not proper to discuss in polite company...
The real problem is that the value "obtained" through seignorage is going to bid up shit like real estate and other non-productive investments. Your "protectionism" only protects those with skin in the market game while crushing everyone not in on the asset inflation party. You might be able to keep this ruse up longer yet, but, eventually, you and your fuckwads in central planning will drive the US middle class into the dust. There is no further stupendous economic expansion possible because we are nearing the point of environmental exhaustion, aka full capacity Earth. When growth possibilities are exhausted and when you inflate currency without ensuring it goes to productive investments, the ruse is eventually going to fall apart. At that point, people will be looking for answers; we will answer those questions and point a finger in your direction. Hope you've got a wide moat around your castle.
Your "national protectionism" claim is really just a 1% protectionism claim. Now please sit down and stop pretending like you're doing the US public a favor.
you couldn't be more wrong imo. the long term trend will be flat to down (nominal) from here while the usd depreciates in real terms.
Yer all FOS. The long term ternd is WWIII and beyond. Money will be revealed as the evil dirty thing that it is...
;-D
How can anyone be cavalier about a WWIII when it results in global die-off of most complex life and a return to a world where civilization can be found only in small groups fighting for survival.
Fuck the .001% and their corrupted minions.
You're nominally correct, and the biggest knob among eunuchs.
Do you know what protectionism means?
And someone is fucking with my keyboard
Protectionism: you're doin it wrong.
trand?
Dude...learn to edit your own hunt and peckin....shit
CK
unfortunately I agree...right up to levels not seem since Zimbabwe. No deflationary collapse will be allowed to occur in a fiat regime.
I don't like it because it implies a much longer wait but it is a fact.
The Fed will monetize baseball card collections before this is over....unless it ends with a shout rather than a whimper.
this is where China learns that the US PPT is way better than their PPT... especially since the US has Japan as a vassal state...
all distractions in Asia aside, the real target is Germany... those dogs are going to be brought to heel Real Soon Now(tm)...
“The trade volume of the market can reach 2 trillion yuan ($300 billion) a day, which means if it collapsed no one could save it,” Li Jiange, vice chairman of state-owned investment company Central Huijin, wrote in a widely circulated blog post. “The issues of the market should be handled by the market itself.”
seriously folks, this is China's PPT basically saying "fuck this, this is the major leagues, we're not ready to throw down at this level... back to the bus, we're heading back to the minors"
Has Li Jiange been introduced to a Chinese made nail gun yet?
Chump change
I wonder how many old timers like myself have thrown in the towel on this 'boom/bust' market and stashed their holdings in flat-rate CD's? When you get to retirement age you look at all of this with a different eye. It becomes too long-term risky to hold your breath and hope the rise carries you to the financial promised land. 3% may not sound like much, but it's better than a 50% loss.
true, at least with 3% fixed you're only looking at a compounded loss of 1% to 5% YoY (depending on who you ask) due to inflation... it's risk free because it costs you in the long run, basically...
You can't get 3% these days and even if you could it would be little more than a nominal slow bleed.
The age of paper is done.
1981 Paul Volker set the Interest Rate at 19%.
See no one ever calls them on their boob-headed policies, and they got to either extreme based on Interest Groups while pretending to be disinterested third party
- LIRP/ZIRP for 6 years
- FISCAL Policy of spending $3.5 Trillion a year over Iraqi War Years... leading to obvious increase over that in 2016 or 2017
- No Interest on Deposits Policy for 6 years, when we can change this if we admit we print Trillions in Fractional Reserve Banking each year, policy is what we say it is
1. Trade Policy
2. Regulatory Policy
3. Fiscal Policy
4. Monetary Policy
Policy is what we say it is.
Bad day to quit drinking Whiskey...
yep I remember getting 12.5% and 15% (15%!) CDs at the local S&L in those days... I also remember what happened to the S&Ls later on...
Technically a good area for a bounce. Personally I think we're just gona bear flag and crash lower but who knows what the digital zero masters are capable of.
Soon the #FED will start defending the dollar with the Japanese military.
That is probably already part of the plan. About the only thing that takes the legs out from underneath the $DX is China's gold strategy, assuming they have one. Then again, that would be tantamount to an act of war, so 'hedge accordingly'.
Wish I had a magic CTRL P function on my computer...
You do. BK court. Embrace the law. Use the law to your advantage. Everyone is doing it.
Hhanks Bob Doll for your market call this morning. There's a 50% chance we've hit market bottom. Lol. Wow. So glad CNBC puts you on air to tell us we have a 50% chance of being at lows. What a douche. You, Tom Lee and Dennis Gartman should get your dumbasses off the air and go sell beach front property to widows, at least be con artists in the traditional way and quit hiding behind CNBC to make you credible. Fucking scum bag assholes.
It's only 50% since QE4 is a "yes" or "no" question!
PPT is a yes. Stealth QE is a yes. MY guess is some serious sell-off by private participants followed by FED/Foreign CB intervention taking over those positions. Eventually, QE4 is announced officially. They won't let the US markets fall without China suffering a lot more (if they actually end up doing so).
Doubt it will work though- without consumers consuming (and only bidding up real-estate or paying increased rents at the cost of other consumption), what can actually pull commodity prices out of the gutter?
CNBC is fucking bullshit.
It is obvious, we need 1% circuit breakers to halt trding on any stock that drops more than 1% in a month. This will assure prosperity and an orderly market, and renew confidence.
Probably a bad week to give up cigarettes...
- Birth tourism: 71% of illegals with kids collect welfare...
- Tech firms post want ads: foreign workers only...
- http://www.nationalreview.com/article/422943/technology-industry-foreign...
- Before a Robot Takes Your Job, You'll Be Working Side By Side!
- http://observer.com/2015/08/anti-american-sentiment-surges-in-russia-as-...
That is discrimination against US Citizens which is as bad as Germany Sponsoring Squatters Rights for Illegal Immigrants
- 'If internet goes down, half planet will come to standstill'...
- http://www.bloomberg.com/news/articles/2015-08-24/ashleymadison-hacked-d...
- http://www.politico.com/story/2015/08/dick-cheney-speak-out-against-iran...
- http://www.washingtontimes.com/news/2015/aug/24/irs-finds-yet-another-lo...
- Dallas Police Union Says Slow Response Times Due To 'Mentally Beaten Down' Officers...
Christmas comes early this year! Thanks for the gift. Loading up on more QQQ puts this am while on sale. Screw those crooks. 2 months is all it'll take.
I never truely believed in miracles until today.
I've notified the Pope, and the head of the PPT will be Sainted soon.
Surely Bank of America will tell us what to think?
It's pretty clear now after 2 explosions in China and one in Japan, that the currency fracas we observed a couple of weeks ago, is a full blown war between the forces of East and the West.
Why are stocks up this morning? Why for the same reason they went down 200 point at the close yesterday.
The forces of 'up' pulled their buy orders at 3:30 pm yesterday before the close and whoosh the market ticked down.
This morning the 'down' forces didn't place any sell orders and the market whooshed up. When the 'sellers' finally get around to selling again, the market will be several hundred points higher and they'll make more money on their sales.
But money isn't the name of this fight.
THIS IS A FIGHT TO THE DEATH