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Pre-Fed Jitters Spark Bond Bid, Stock Skid Amid Crude Carnage
Will they? Or won't they?
And it's gone...Enjoy the ride!! Just follow everyone else's tracks, they can't all be wrong, right? (Forward to 35 seconds and enjoy the quiet solitude)
Despite various ramps to VWAP (enabling institutional sellers)
The Nasdaq clung to unchanged on the day as Trannies were the biggest laggard...
The Dow seemed to find constant bid support at the PBOC rate cut level while the S&P broke below...
Trannies majorly underperformed today, and converged to crude... just as we said...
Is this the next convergence?
* * *
Individual Stocks were the biggest news today..
Ferrari crashed...
Valeant turned red...
Twitter melted up into earnings...
And AAPL tumbled into earnings...
Rite-Aid had quite a day on the Walgreens chatter...
And finally IBM on SEC probing accounting...
Quite a day for "stocks".
* * *
Treasury yields tumbled, but as 10Y approached 2.00%, a mysterious seller came in (as they so often do ahead of FOMC meetings)...
But stocks remain notably decoupled post-ECB...
The US Dollar drifted higher on the day (though remains lower on the week) against the majors (with JPY strength offsetting Swissy and CAD weakness)
The drift higher in the dollar did nothing to slow gold, silver, and copper gains...
But crude continued to collapse to fresh 2-month lows...
As Vol is rising along with tumbling crude once again post-decoupling...
Charts: Bloomberg
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just curious...
anyone else buying either 2 forms of real money on the London or New York opening phony paper dumps???
Real value is labor of worker, is all convert to fiat currency only so bankster can steal away sweat of brow and other precious bodily fluid!
I love the smell of October 28th in the air - it reminds me of market crashings.
in other news
Busted! Israeli IDF Colonel Arrested In Iraq for Leading ISIS Militants
“The security and popular forces have held captive an Israeli colonel,” a commander of Iraq’s popular mobilization forces said on Thursday.
“The Zionist officer is ranked colonel and had participated in the Takfiri ISIL group’s terrorist operations,” he added.
Noting that he was arrested along with a number of ISIL terrorists, the commander said, “The Israeli colonel’s name is Yusi Oulen Shahak and is ranked colonel in Golani Brigade of the Zionist regime’s army with the security and military code of Re34356578765az231434.”
He said that the relevant bodies are now interrogating the Israeli colonel to understand the reasons behind his fighting alongside the ISIL forces and the presence of other Zionist officers among ISIL terrorists.
The Iraqi security forces said the captured colonel has already made shocking confessions.
Several ISIL militants arrested in the last one year had already confessed that Israeli agents from Mossad and other Israeli espionage and intelligence bodies were present in the first wave of ISIL attacks on Iraq and capture of Mosul in Summer 2014, but no ranking Israeli agent had been arrested.
Political and military experts told FNA that the capture of the Israeli colonel will leave a grave impact on Iraq’s war strategy, including partnership with Israeli allies.
http://www.liveleak.com/view?i=10a_1445865400#z1uIb6tweQqDw87d.99
Convert Disposable FIAT into Silver Bullion IMMEDIATELY. Procrastinators be DAMNED.
Or copper. Boris is recommend 20 guage or higher as is more easy for pull from ground.
Boris is so tired of game of central bank false pronouncement and perpetual surprise analyst. Chance of rate increase by Fed is 0%
Is chance of Boris getting laid by sexy Russian woman better than chance of Fed raising rates? If so, is good for Boris.
Na Zdorovie!
Boris is full of loving wife, but here is drink to your health Mr. Law!
Bolshoe spasibo!
:)
BUT, BUT, BUT,.....The FEDERAL RESERVE said they wanted to raise rates by the end of 2015!! They always tell the truth. They must follow through with what they said or I will not believe those rotten scumbags anymore.
According to Macquarie Research:
http://is.gd/QdV7KJ
The more they do; the worse it gets
In our latest commentary we ask whether indications of easing by ECB and PBoC and BoJ’s potential expansion of its own stimulus would lead to further contraction of global GDP/trade and whether only Fed QE4 could be reflationary.
Deflators of the world unite. As expected (here), CBs are becoming concerned. Not only has the Fed deferred tightening but ECB is sending a strong signal that it is contemplating expansionary measures by Dec’15 and it is likely that BoJ would at some stage increase both size and pace of its own stimulus. Finally, PBoC has simultaneously cut interest rates and RRR. Not surprisingly, financial assets responded in a typical “Pavlovian fashion” by assuming a “goldilocks” outcome of low interest rates for longer; ample liquidity; steady (but unspectacular) growth rates and low but positive inflationary outcomes.
However as discussed here and here, short of massive globally co-ordinated rise in monetary stimulus, incremental changes are unlikely to make much difference and there is an urgent need to re-think the entire Government support system by either allowing restoration of conventional business cycles (unlikely) or embarking on far more extreme and unorthodox policies (such as CBs directly funding fiscal spending, investment and consumption). Erosion of global velocity of money is severely blunting the impact of more conventional QEs.
At the same time, the divergent paths of the Fed and other key CBs are causing monetary and inflationary cross-currents. In essence non-Fed CBs are attempting to export their domestic overcapacity and deflation to the rest of the world and the more aggressive they become, the higher would be the likely deflationary outcomes. The global economy and trade are already shrinking in US$ terms. In the last three quarters, global (US$) GDP has shrunk at ~5% clip with US$ global trade eroding at ~10% pace. The more ECB, BoJ and PBoC ease, the more likely US$ would ultimately appreciate at far stronger pace. Whilst initially an increase in non-US monetary stimulus reduces perception of tail risks and hence stabilizes or even depreciates US$, over the longer-term it is a recipe for much higher US$. As a result, at some stage DXY (US$) could surge from 95-97 to 110-120 and possibly higher. This would further compress the size of the global economy and trade (US$), perhaps returning global economy back to the levels of ‘09-10 (essentially wiping out the last five or six years of growth).
Why is measuring global economy and trade in US$ critical? As discussed in the past, global economy resides on the de-facto US$ standard. Other currencies play relatively minor role, with US$ accounting for ~50% of global transactions and in excess of 70% of global finance (Rmb is responsible for only ~3%). US$ is particularly significant for Asia-Pacific traders, Latam and commodity producers (though less so for Eastern Europe). If Fed tightens, it could potentially get much worse. However, even if Fed does not tighten but simply refuses to embark on a QE4, the outcome would still be higher deflation and lower US$ global economy and trade. In other words, some currencies are more equal than others and therefore Fed’s policies are far more inflationary than equivalent policies pursued by other CBs. If our core assumption of no tightening but no QE4 comes true, then deflationary pressures are still likely to strengthen as supply of global US$ continues to contract.
This explains our unwillingness to buy countries like Indo or Mal and instead our preference for commodity consumers and countries with trapped domestic liquidity and limited external vulnerabilities (i.e. India, China, Phil and Taiwan).
"raise rates by the end of 2015"
You can change that to...by the end of 2016. They won't do it then either!
Jack Yellen sez....We need MOAR data!
They were dyslexic, they meant 5102.
They wouldn't channel stuff Ferraris, would they ?
Why don't a bunch of us go down to the NY Fed some night and break all the windows?
Think globally act locally and all, eh?
ha ha ha 90 percent chance of a rate hike by 12/16.
ya, sad thing is so many stupid fucking sheeple out there actually believe that shit
Probability of Fed raising rates before 2050- 0.0%......there fixed it.
Great action in the Russell today, hope traders were able to catch some of the bloodletting.
To make it easy for non-traders to understand what occurred, I’ll report in the style of ZH-ers ‘Kaiser Sousa’ and ‘thismarketisrigged’ (who both seemed uncharacteristically sedate today):
Well … what a MOTHER-FUCKING SURPRISE! Those GODDAMN RUSSELL NINJAS dump early then, in TRUE ASSWIPE FASHION, spike to opening levels, where the MOFO SOMBITCHES, acting on a text message DIRECTLY FROM SATAN, plunge further w/ a volume spike before 1:00, leading even the Ursuline Sisters of Youngstown to get 100% short in their endowment, and then, clutching a fistful of fraud-ass profits in one hand while strangling a child’s pet kitten with the other, they crawl back to VWAP (Vortex Where Assholes Proliferate), letting all their little buddies off the shitshow bus right where the ice cream truck was parked. Slow torture is too good for them -- they should be forced to watch EVERY GODDAMN EPISODE of ‘Laverne & Shirley’, upconverted to FULL HD, after which I’ll supply my own text message: “FUCK OFF !”
Whew … that was exhausting, don’t know how you guys do it every day … :)
+1
That's all stocks slide? Your kidding.
Totally rigged market.
Just buy da dip!
No free markets until a currency crisis.
Raise rates, Fed won't do it. Has to be the market.
AAPL can 'beat' estimates if they act as a subprime lender to their suppliers.
Check out the explosion in the Vendor non-trade receivables line item...
Good point. AAPL arbitraging its big boy access to artificially cheap money that it's smaller suppliers not in the club don't have. Profiting at the expense of those who subsidize the artificially cheap money - us.
I realize this opinion runs counter to the primary mandate of the US Federal Reserve, but Yellen and the rest of the central planning cronies need to start worrying more about the main street and the millions of small businesses and people rather than wall street and a group of hyperleveraged banks.
funny you know she used to comment on that matter when she was first appointed but everyone knew it was bullshit and so she stopped altogether
How long can the levitation last?
What is the correlation between the trannies and crude, because intuitively it doesn't make much sense. 60% of the average is comprised of companies where oil is their major expense.
witnessed in a surreal reality world
in the USA...all the current talk is about APPL...(wow,the whole world revolves around a stupid phone device)
in China..the news.op-ed's.etc.etc talking the real deal of having border lines crossed
USA needs a real WAKE UP call about what's important
App's ain't gonna be much help when the bullets start flying
Prepare...
Stay Safe.
http://www.reuters.com/article/2015/10/27/us-usa-economy-inflation-analy...
Why Fed may hike rates before seeing whites of inflation's eyes
WASHINGTON | By Jason Lange
Further falls in America's jobless rate will lead inflation to start rising early next year, according to a forecast based on research Federal Reserve Chair Janet Yellen has cited as shaping her confidence a rate hike could be needed this year.
Yellen has recently faced a rebellion at the central bank, with two Fed governors arguing that rate hikes should be delayed because of a breakdown in the tendency of low unemployment to fuel faster inflation, a relationship called the Phillips curve.
Governor Lael Brainard said this month that the Phillips curve relationship was "at best, very weak at the moment" while Daniel Tarullo said it has not been "operating effectively for 10 years now."
With the Fed's rate-setting committee meeting on Tuesday and Wednesday, Yellen and Vice Chair Stanley Fischer may seek to show the bank should not wait for inflation to appear before hiking rates. Both Yellen and Fischer have backed the relationship between jobs and inflation.
"The Phillips curve is alive and well," said Robert Gordon, an academic at Northwestern University whose 2013 paper on the subject was cited by Yellen and Fischer in speeches this year.
Gordon said the key reading to watch for signs of inflation was the short-term unemployment rate, those out of work less than six months, rather than the overall jobless rate. The relationship between that short-term joblessness and prices has held for 50 years, he said.
The short-term rate appears to matter because businesses set wages based on plausible candidates for a job, so the surge in people out of work for long spells since the recession might not influence inflation.
The short-term jobless rate has sunk to 3.7 percent, which is lower than it was at the outset of the 2007-09 recession. The overall unemployment rate is currently 5.1 percent.
Gordon's projection is that the short-term rate will sink to 3.5 percent by the end of 2016 and 3.3 percent by early 2017.
Inflation excluding food and energy, currently at 1.3 percent, would start slowly in the first quarter of 2016, with overall inflation rising from its current 0.3 percent rate to the Fed's 2 percent target by 2020, Gordon said.
Many Fed policymakers actually expect inflation will rise more quickly, so Gordon's projections are not an argument for the Fed to more aggressively head off price increases.
They do, however, shed light on why the Yellen and others at the Fed are confident inflation will rise.
http://safehaven.com/article/39355/fed-headed-into-inflation-overdrive
While the deflation effect from plummeting oil prices wears off by years-end, there is no reason to believe the same deflationary forces that sent oil and other commodities down to the Great Recession lows won't start to spill over to the other components, such as housing and apparel, inside the inflation basket. This would especially be true if the Fed continued threatening to raise interest rates and driving the U.S. dollar higher.
Central banks and governments can always produce any monetary environment they desire. It is a fallacy to believe that deflation is harder to fight than inflation. Deflation is currently viewed as harder to fight because the policies needed to create monetary inflation have not yet been fully embraced -- although this is changing rapidly.
The Fed just can't seem to grasp why its newly minted $3.5 trillion since 2008 hasn't filtered through the economy. But this is simply because debt-disabled consumers were never allowed to deleverage and markets were never allowed to fully clear.
But the Fed isn't one to let the truth get in the way of its Keynesian story. And why should it? Financial crisis is the mother's milk of increased central bank power. For example, before the last financial crisis the Fed was unable to buy mortgaged back securities; rules were then changed to allow it to purchase unlimited quantities of distressed mortgage debt. The Fed is perversely empowered to continue making greater mistakes, thus yielding them greater authority over financial institutions and markets.
Since 2008 the rules and regulations fettering Central Banks have become more malleable depending on the level economic distress. Congress has mandated that the Fed can not directly participate in Treasury auctions. But there is no reason to believe in the near future that this law won't be changed to better accommodate fiscal spending.
Strategies such as: pushing interest rates into negative territory, outlawing cash, and sending electronic credits directly into private bank accounts may appear more palatable in the midst of market distress. The point is that Central Banks and governments can produce either monetary condition of inflation or deflation if the necessary powers have been allocated.
In the Fed's most recent dot plot (a chart displaying voting member's expectations of future rates) the Minneapolis Fed's Kocherlakota was mocked as the outlier for placing his interest rate dot below zero. However, persistent bad economic news has quickly driven the premise of negative rates into the mainstream. Ben Bernanke told Bloomberg Radio that despite having the "courage to act" with counterfeiting trillions of dollars, he thought other unconventional issues (such as negative interest rates) would have adverse effects on money market funds. However, anemic growth in the U.S., Europe and China over the past few years has now changed his mind on the subject.
Supporting this notion, the president of the New York Fed, William Dudley recently told CNBC, "Some of the experiences [in Europe] suggest maybe can we use negative interest rates and the costs aren't as great as you anticipate." Indeed, over in Euroland, ECB President Draghi hinted recently that the current 1.1 trillion euro ($1.2 trillion) level of QE would soon be increased, its duration would be extended and deposit rates may be headed further into negative territory.
Statements such as these have me convinced that negative interest rates in the U.S. are likely to be the next desperate move by our Federal Reserve to create growth off the back of inflation. After all, the Fed is overwhelmingly concerned with the increase in the value of the dollar. Keeping pace with other central banks in the currency debasement derby is erroneously believed to be of paramount importance. Outlawing physical currency and granting Ms. Yellen the ability to directly monetize Treasury debt and assets held by the public outside of the banking system could also be on the menu if negative rates don't achieve her inflation mandates.
Instead of repenting from the fiscal and monetary excesses that led to the Great Recession the conclusions reached by government are: debt and deficits are too low, asset prices aren't rising fast enough, Central Banks didn't force interest rates down low enough or long enough, banks aren't lending enough, consumers are saving too much and their purchasing power and standard of living isn't falling fast enough.
The quest of governments to produce perpetually rising asset prices is creating inexorably rising public and private debt levels. The inability to generate inflation and growth targets from the "conventional" channels of interest rate manipulation and the piling up of excess reserves are leading central banks to come up with more desperate measures.