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And Back To Risk On - Here Are The Overnight Catalysts
Just when it seemed that a Fitch downgrade of all global banks and an S&P cut of Spain may finally snap the back of the EUR, the European currency decided to shove its head even deeper in the sand and proceed to melt up by a nice 100 pips on hope that some big, fat, juicy rumors may come out of a G-20 meeting in Paris, and that a bumbling Barroso may say more unbearably stupid things (such as this one from Bloomberg: Barroso reiterates call for Euro-wide bank recapitalization: apparently the unelected European dictator is not aware the EFSF somehow has to be increased to €3.5 trillion first. Never let facts stand in the way of fictional propaganda) about bank recapitalization. Either way, what appears to be a certain risk off day, has in the past 6 hours, been completely reversed. Here are the key catalysts that drove that, courtesy of Bloomberg First Word.
- Euro and sterling are firmer as G-20 meeting in Paris begins and mkts look for progress on bank recapitalization, capital adequacy ratios, haircut for Greek bondholders and EFSF implementation.
- EUR/USD +0.1% to $1.3790; +3.2% on week, biggest 5-day gain since Jan. 24
- Finance ministers’ meeting today may produce EUR-supportive headlines, Morgan Stanley note says
- Reports BRIC countries considering ways to provide additional funding for EMU may set bid tone to EUR: Morgan Stanley
- Lack of Euro reaction to Spain’s ratings downgrade suggests mkts still in euro-positive mode; wouldn’t bank on continued rally in EUR/USD amid absence of comprehensive solution to debt crisis, Lutz Karpowitz, strategist at Commerzbank, writes in note
- Euro rally may stall as investors await details on European crisis resolution, Valentin Marinov, strategist at Citigroup, writes in note
- Last few days have indicated a concerning lack of consensus between various parties on how to deal with the twin sovereign debt and banking crisis: Citi
- Euro investors may remain reluctant to extend longs before details have been agreed; EUR/USD, EUR/JPY may struggle to extend gains near term: Citi
- Europe under pressure to act after Spain downgrade, Derek Halpenny, strategist at BOTM-UFJ, writes in note
- Euro has rallied 5% from Oct. 4 low; EU action will be required for gains to sustain: BOTM-UFJ
- GBP/USD steady at $1.5764: +1.3% on week, biggest weekly rise since May
- August trade balance saw significant improvement and narrower deficit was driven by strong exports rather than weak imports; shows pound’s weakness has positive effect on foreign trade: Commerzbank
- Quiet day; profit-taking may lead GBP lower to $1.56: Commerzbank
- USD/JPY +0.1% to 76.95: +0.3% on the week
- Worth noting of massive repatriation by Japanese investors of foreign bond holdings in latest weekly data: BOTM-UFJ
- JPY2,221.5bln of foreign bond sales was largest weekly sales on record (since 2001); flows are mostly hedged, currency impact usually not large: BOTM-UFJ
- USD/JPY’s recent rally no more than brief interlude on speculation BOJ might introduce a floor at 80: Commerzbank
- USD/JPY may fall further in event of renewed rise in risk aversion: Commerzbank
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S&P Downgrade-a-thon continues which means... you guessed it... Risk on.
China can't unload those USt fast enough as the shit-show enters its Nth phase.
Full speed ahead!
Reminds me of that Jack Nicholson line in "As good as it gets": "I think of a man and take away all sensibilities".
Actually the line was "I think of a man, then I take away reason and accountability." In response to the receptionists question "How do you write women so well?"
I remeber there used to be a time when markets actually went down on bad news. The joke continues.
What's the problem? G20 will agree to anything because they don't want a repeat of 2008. Europe will become the new Greece and the G20 will become the new Germany.
The only reason they are keeping the stock market so high is to keep the lens off of what is going on elswhere....if people knew they lost money they would want to know why they lost it....but right now its hitting records...at least that is what they are told....so they don´t care if some country is broke or some bank is broke...all they care about is Apple´s new I-phone...
As i said many times before, there won't be any peaceful resolve to this situation!!! People have to hit the streets or lay down and die!!!
Fraudulent Friday. Disclosure: Long 'The Invisible Pedestrian" Halloween Costume Company, Wangsong, PRC.
Between UST dumping for cash and the shadow banking industry unknowns, well, I put nothing past how insane and irrational the "markets" can move against logic and reason.
In fact, when's the last you remember "logic and reason" being part of the market?
However, as history has proven with 100% accuracy, these illogical and crooked tactics are short lived on longer timelines.
Markets move in relation to bonus and (re)election cycles...we're deep in both currently
every day another meeting, another rumour, another false flag, he said, she said, we said, we will, we won't, we should! is this is not proof of an out of control situation? if you invest in this market, even with all this crap, use common sense which will prevail, compared to the other nonsense which won't!
Futures up +82.
FTSE up 0.80% as of now and 3 hours ago when I was watching Bloomberg and saw Lloyds being up 0.35% I had to turn it off because a weird twitching was taking place on the side of my eye socket. This is getting ridiculous on a beyond satirical level now.
Oh - and of course the Monday to Wednesday air-based rally moved the markets up 400pts up for no reason whatsoever and left Thursday for "reflection", I guess, and that slight "pullback", just to give the feeling that markets are only rigged by 99.8% and not make it look completely ridiculous, while of course the weekly regurgitation of pledges during the G-20 meeting in Paris will provide adequate hopium for next week's 500 point rally.
My bets for the upcoming word-cloud: EFSF, Haircuts, Unity, Recapitalization, Hope, Greece.
Mugatu, ' Damn the torpedos, full speed ahead.
I think all markets are so high because of all the printing. Where else can all the money go? Can you imagine the juggling act the fed does every day? The amazing thing is they do that and keep the whole show going and are accumulating wealth to boot. As I understand it Alan Greenspan lives in Switzerland now. I would think he has a nice stack of gold bricks stashed in various vaults and fall out shelters..
You know, I used to think that ZH was simply incompetent; a perma-bear site for the gold bugs.
But I now see the business model. Those who call themselves Tyler Durden have their market and of course a bit of thier demographic is the shiny stuff fan. But that is a small part.
No, the core ZH Sheeple are those who are the true, total and utter failures in society. They aren't illiterate or stupid but for whatever reason, the world haas just passed them by without a glance. They sit,every day, wallowing in the misery of other's success and just can't understand why it hasn't happened for them.
So, they turn to ZH. Here they find the answer to their failures; the system is so crooked that only the crroks can thrive. Only those with connections to other crooks can achieve. The system is stacked against those who really know and best of all? It is soon to come crashing down around those who have taken from the failures in the world. Those bastards who have achieved will pay for their theft by god; Tyler Durden tells me so!! All the other sources of information are aligned against me says the ZH Sheeple and the Tyler Durden pats their heads and says "That's right, you aren't a goofy, dumb ass failure; everyone else are dumb ass crooks - but don't worry; soon they'll get theirs!"
So grind away TD. Tell those who view you as the dear leader that when the market is up it is a lie! It is manipulated! When the EU still stands, remind the faithful that it shouldn't be standing and will soon fall. Every world event means WAR!!!, well until it doesn't happen and then just stop writing about that event and pick up a new event that means WAR!!! Hyperinflation is coming "bitches", just wait for it, wait for it....... And of course:
Tune into ZH tomorrow; same bat-shit crazy channel, same bat-shit crazy time!!!
You're a funny guy. Glad you have it all figured out.
I think part of what you say is true - the system is crooked, whether you recognize it as such or not (and perhaps you personally benefit from that fact and thus are vested in its continuation), but crony capitalism is what is going on here, and due to capture of all of the politicians, this isn't going to change anytime soon. There is also some truth to the idea that one should should trade based on those facts, and not on the basis of what reason and common sense tell you should be the outcome. I also agree that Armageddon is not likely to show up anytime soon. But you make a mistake in dismissing everyone who logs in here as a failure. Far from it. But you post this sort of thing all the time here. So save yourself the obvious aggravation, lower your blood pressure, and go elsewhere - there are other sites that would no doubt welcome your point of view.
So you equate success in life with success in the stock market? That an increase in paper profit through the manipulation of accounting is succeeding? People who don't invest in a 150 P/E corporation are failures? Ethics and morality don't matter?
So a person that invested in Apple is a success but a man that creates a corporation and grows the comapny to employ a few thousand people only to be snuffed out by politicians who recieved campaign donations from a massive corproation is a failure. Instead of employing people he should have just invested in Apple.
You sir are the failure because you equate success with wealth generated from a game. Is a person who bets $10k on red 16 and lucky enough to hit as much of a success as a person who invests in Netflix? For a while the guy is riding high until he starts to believe he knows better than the game and bets it all again, only to lose. Plenty of people invested money in Netflix right before the fall to $120. They invested in the market, aren't they successful? They probably invested based on the recomendation of people like yourself.
I have built a company that sold less than $10k a year before I came on board into a $30 million a year corporation. I gues I am not a success because the company is not publicly traded. I didn't invest in Apple either, I guess I am not a success. I guess paying 250 an average salary of $50k isn't successful. I should pay them less and take more of that money myself. I suppose I could try and talk to some venture capitaists an try to take my company public so I can cash out with millions.
Ahhh I get it now. The purpose for starting a company is to get funding to take it public and cash out or sell it to a larger corporation and cash out. Employing people doesn't matter. They should have just been smart enough t invest in Apple instead of trying to work for a living.
End the institutions that bring nothing but more slavery via debt and ridiculous headlines-- end the G20 framework. It's nothing more than sinister ministers getting together to impose maligned policies that only benefit the few at the cost of many.