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Barclays: Market Reaction To Fed-Action "Exaggerated"

Tyler Durden's picture




 

First it was Goldman, now it is Barclays lamenting what is painfully obvious: what has gone up violently, will go down doubly so, once the market realizes that what the Fed and the global central banks have done is applying a band aid to a severed artery. Naturally, the disappointment will be substantial, and while Goldman is angry that its tentacles have to be retracted for a few more weeks before it can acquire the equity of some European competitors for a buck a share, Barclays is angry because it is very likely that it, together with fellow British bank RBS, will be on the receiving end of market fury. This explains the statement by Barclays' Paul Robinson who said that the "market updraft" was "exaggerated" and "it is not easy to make a case that the magnitude of the news quite justifies the magnitude of the global market reaction, in our view." That's ok - the short covering knows best... if only for a few days, because as Robinsons says, "Market participants seem as fearful of missing a market updraft as they are of getting caught in a downdraft" - in other words we are all momos now, chasing the leader and pushing the wild market swings into swings with ever greater amplitudes, until one day absolutely nobody will be able to trade the daily gyrations created by ever more frequent central bank intervention.

 

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Thu, 12/01/2011 - 10:08 | 1934607 silver500
silver500's picture

We think the stakes are high in the policy announcements that are made in the comiing week - Oh Really??

 

http://whereisourgold.co.uk/

Thu, 12/01/2011 - 10:25 | 1934698 ratso
ratso's picture

BCS says market reaction is exaggerated.  WHO CARES?

 

By the way,  there are lots of folks and funds that time the market and start buying the day after Thanksgiving.  Maybe this is the Hot Turkey Effect.

Thu, 12/01/2011 - 10:52 | 1934790 SAT 800
SAT 800's picture

I care. The fact of the exaggerated reaction indicates that the market has a bullish "tone"; it's just looking for an excuse to rally. The market is 100% a psychological machine. Nothing is more common than to see the market rallying during many months of bad news; and vice versa, trading down without any bad news. 

Thu, 12/01/2011 - 11:20 | 1934820 ratso
ratso's picture

SAT 800 - I don't think so.

I am paraphrasing Buffett when I say that in the short term the market is a voting machine and in the long term the market is a valuing machine.  The market pricing itself is maybe about 25% psychologically based but that shifts with the moment.

Thu, 12/01/2011 - 10:04 | 1934616 BlueStreet
BlueStreet's picture

"...until one day absolutely nobody will be able to trade the daily gyrations created by ever more frequent central bank intervention."

Isn't that day here already?

Thu, 12/01/2011 - 10:09 | 1934640 Tsar Pointless
Tsar Pointless's picture

Considering that people openly admit on this and other web sites that they short the market, and others say they are long the market, while others simply admit to day-trading, I'd say, "No, that day is not here already" in reply to your question.

Thu, 12/01/2011 - 10:16 | 1934668 SheepDog-One
SheepDog-One's picture

I dont really see all that many people here say theyre trading the markets except for those leaving spambot links.

Thu, 12/01/2011 - 10:18 | 1934674 Tsar Pointless
Tsar Pointless's picture

I said "on this and other web sites". Can you understand basic English?

Thu, 12/01/2011 - 14:04 | 1935542 Leopold B. Scotch
Leopold B. Scotch's picture

Lighten up, Francis.   SD1 made a reasonable observation on what happened to be one part of your comment.  = Not obligated to satisfy your every expectation / consideration of how YOU think people should address your comments.

Thu, 12/01/2011 - 10:26 | 1934688 redpill
redpill's picture

More poignantly, there may be some trading, but investing is dead. When a handful of central planners can turn global stock markets on their head overnight, it is impossible to be an investor. Rather, anyone "trading" at this point is a speculator, trying to guess what these madmen will do next. All that is left is speculation and front running by the big boys when they get the insider info ahead of time.

Thu, 12/01/2011 - 10:50 | 1934785 Ghordius
Ghordius's picture

lol - investing as "buy and hold forever/at maturity"?

I'm asking because I have friends who think they are investing when they hold for two weeks before they sell...

Thu, 12/01/2011 - 14:08 | 1935559 Leopold B. Scotch
Leopold B. Scotch's picture

These are no longer markets.  There are only interventions deliberately obfuscating honest price discovery to protect the empowered class structure from collapse.

Thu, 12/01/2011 - 14:12 | 1935576 redpill
redpill's picture

Correct!  Cheers, Mr. Scotch.

Thu, 12/01/2011 - 11:13 | 1934858 Gohn Galt
Gohn Galt's picture

Does the anti Tilson ETF count as trading?

Thu, 12/01/2011 - 10:21 | 1934689 BlueStreet
BlueStreet's picture

I read it to mean nobody will be able to trade the daily gyrations 'successfully.'  Unless all exchanges close they can always obviously try.

Thu, 12/01/2011 - 10:30 | 1934705 redpill
redpill's picture

Some catch the wave of each arbitrary central planner decision, some probably try to convince themselves it was something they saw coming (these people are called "technical analysts"). But the reality is that I can "successfully" play roulette in Las Vegas from time to time, and probably outperform many hedge funds this year!

Thu, 12/01/2011 - 10:40 | 1934747 ltsgt1
ltsgt1's picture

I am not going to participate in this heart stopping gyrations any longer. I was up 60%, then up only 12%, then back up to 50% and now up only 20%. I will stop when I am still up and keep my sanity. I don't know why I am still reading ZH.

Thu, 12/01/2011 - 10:33 | 1934719 Smiddywesson
Smiddywesson's picture

Position traders remaining in market:  Inside traders and gamlers who think it's a market or think they can guess what the Fed will do.

Swing traders remaining in market:  Inside traders and gamlers who think it's a market or think they can guess what the Fed will do.

Day traders remaining in the market:  Inside traders and people getting paid provided they know how to trade.

This market can only be traded by those with inside information and day traders.  Everybody else is gambling.

Thu, 12/01/2011 - 10:05 | 1934618 AngryGerman
AngryGerman's picture

wow, simply wow, i hope they pay him good money. that's really some insight.

Thu, 12/01/2011 - 10:48 | 1934773 rufusbird
rufusbird's picture

The optimism! It's all transitory!

Thu, 12/01/2011 - 10:06 | 1934620 eigenvalue
eigenvalue's picture

Of course the stock markets will go down violently but when? 

Thu, 12/01/2011 - 10:19 | 1934677 sabra1
sabra1's picture

when there is no more wealth to steal!

Thu, 12/01/2011 - 10:56 | 1934799 Smiddywesson
Smiddywesson's picture

Stocks can be allowed to fall when there is enough gold in the vaults of the central banks that matter to move to a monetary system that will serve 7 billion people.  That system cannot continue to be a debt based system because our current model of perpetual growth outrunning debt has failed because our populations are aging. We can no longer outgrow our debt and those debt levels are becoming poisonous. 

Nations have gone off a gold standard before in the past, especially during war, but they always closed the gold window to protect their reserves for when they later reentered the chummy club of those on the gold standard.  Unfortunately, everybody bought into the barberous relic jive, and now those reserves are being rebuilt, virtually from scratch in some countries like the UK.  That takes time.  If the stock market crashes and the global financial system crashes before those reserves are in place, we will have chaos and confiscation of gold whereever central bank reserves are insufficient.  Rich people, the kind of people who have gold, don't want that.

So, no market crash until everybody who matters has enough gold to settle trade imbalances in gold.  That takes a lot of gold, however if the price is just a tad bit higher, say $10k to $50k an ounce, everbody makes out quite nicely, everybody that is, except for mom and pop who don't have any.  But, as they say, you can't make a cake without breaking a few eggs.  That's part of the plan too, to lower the living standard of the average Westerner and raise the living standards in the East, so we can balance our trade. 

To misquote Uncle Joe Stalin: A single bankruptcy is a trajedy, the bankruptcy of an entire generation is just a statistic. 

Thu, 12/01/2011 - 10:06 | 1934621 Snakeeyes
Snakeeyes's picture
No guff Chet! Watch my interview from yesterday with Jeffrey Miron on Fox Business' The Willis Report The Morning After The Global Central Banks Ride To The Rescue! But The Eurozone’s Leg Is Broken and Central Banks Are Applying Gallons of Bengay As Treatment

http://confoundedinterest.wordpress.com

Thu, 12/01/2011 - 10:06 | 1934625 Josephine29
Josephine29's picture

What seems to be much less well explained is the likely risk to the US taxpayer and citizen from all this. As after all it is likely to be the US Federal reserve who turns out to be the worlds central banker just like in 2008. Such risks are explained well below.

Should the main liquidity provider turn out to be the US Federal Reserve (as I expect) then there are genuine risks for the US taxpayer and citizen in this move. This distinguishes me from the Wall Street Journal for example which has stated that there are not. The opening risk is loss of control of your money supply which has dangers for future inflation. Right now the inflation risk is low but how quickly can you regain control of the money supply if circumstances change? Also there is a credit risk as with the dangers of Euro zone break-up or changes then as time goes by the ECB and its backing could change. Accordingly there are dangers for US taxpayers here.

 

Interestingly one member of the US FOMC agrees with me as Jeffrey Lacker voted no to this new programme as he considers it to be in effect fiscal policy. A quite significant move for my theme that central banks are not independent of political influence these days inspite of claims to the opposite.

 

http://www.mindfulmoney.co.uk/wp/?p=5046

Thu, 12/01/2011 - 11:21 | 1934887 Smiddywesson
Smiddywesson's picture

There are two omissions in that argument, however that doesn't make you wrong. 

First, the destruction of the dollar and of our finances is not a future event, it was accomplished in the past, here as well as in countless other nations, esp in Europe.  We have passed the point of no return.

Second, once we reached the point of no return, it matters not to the powers that be how much of the old paper money is squandered in kicking the can to give them enough time to buy enough gold to set up a new system to keep them in power.  They don't care if it bankrupts mom and pop as long as they sit atop the new, more stable, monetary system when the dust clears.  Hey, if it does bankrupt them, so much the better, because it will lower living standards in the West vis a vis our trading partners in the East, right?

 

Thu, 12/01/2011 - 10:06 | 1934626 SheepDog-One
SheepDog-One's picture

500 points on proven failure action is a bit knee-jerk? No WAY!

Thu, 12/01/2011 - 10:06 | 1934627 Christoph830
Christoph830's picture

Unrelated question but I don't know where else to ask:

Where the FUCK is Jon Corzine? Anyone heard from him?

Thu, 12/01/2011 - 10:09 | 1934636 AngryGerman
AngryGerman's picture

ecb, fed? he must be somewehere around there

Thu, 12/01/2011 - 10:10 | 1934642 SheepDog-One
SheepDog-One's picture

Probably with Hank Paulson in Paraguay, no ones seen that piece of shit since his hijacking and parachute out of the plane.

Thu, 12/01/2011 - 10:11 | 1934649 oldman
oldman's picture

Where are Jimmy Hoffa and Osama Ben Laden and Saddam?                  Tell us, please.

Thu, 12/01/2011 - 11:08 | 1934654 Momauguin Joe
Momauguin Joe's picture

Probably in some Tel Aviv safehouse with a couple of 14 year old Ukrainian slave girls. Settling into retirement, it'z.

Thu, 12/01/2011 - 10:08 | 1934634 slaughterer
slaughterer's picture

Last I heard, Monti was planning a paltry EU20b in cuts for 2013.  Is that a "definitive" response to the "underlying problems"?  Only in bizarro land.

Thu, 12/01/2011 - 11:41 | 1934958 Smiddywesson
Smiddywesson's picture

Once you begin running huge deficits in the fat years, you can't make cuts, especially during the lean years.  Once the government becomes an appreciable portion of your economy, you can't stop spending without crashing your economy.  Once your global population expands dramatically and then ages, you can't continue to grow your economy.  All of these factors come together into an inescapable trap.  This can't be fixed.  They can't make cuts, they can't address the problems.  All they can do is forestall the collapse with ever increasing amounts of fiat so they can stack enough gold to support a new system that isn't based on debt. 

Thu, 12/01/2011 - 10:09 | 1934635 midgetrannyporn
midgetrannyporn's picture

I don't think the reactions are any stronger than usual it's just that the market is getting easier to push around. The prop desks for all their evils did serve to dampen wild swings.

Thu, 12/01/2011 - 10:09 | 1934637 cat2
cat2's picture

In other words, they have already taken profits and need a pullback for another entry point.

Thu, 12/01/2011 - 10:13 | 1934645 SheepDog-One
SheepDog-One's picture

Pump, and dump!

1 thing he leaves out of his analysis is that shorts were low for this pump, so it wasnt a short fueled squeeze.

Thu, 12/01/2011 - 12:24 | 1935126 Mesquite
Mesquite's picture

Me too..(In my ultra small way..)

It's getting the procedure down, that counts...

Thu, 12/01/2011 - 10:21 | 1934646 LawsofPhysics
LawsofPhysics's picture

You think?!?!  LOL!  Hell, why should the central banks do anything when just talking about doing something is working so well?

Thu, 12/01/2011 - 10:12 | 1934651 Ruffcut
Ruffcut's picture

Hey robo, your lulu took a poo poo. Even the banks are talking trash to your pollyanna market. Go long dude, the banks need the money more than you do. No scooter this year for grinchmas.

Thu, 12/01/2011 - 10:33 | 1934721 WonderDawg
WonderDawg's picture

What the hell happened with LULU? I just what it opened at this morning. Holy shit! This more than makes up for the beating my C puts took yesterday. What a nice surprise. But still, what happened?

Thu, 12/01/2011 - 10:50 | 1934784 Teamtc321
Teamtc321's picture

lulu earning's report took a nose dive lol. Husband's got tired of buying over priced yoga pant's for fat wife's.....

Thu, 12/01/2011 - 10:58 | 1934810 WonderDawg
WonderDawg's picture

Just awesome. I feel so much better this morning than I did yesterday morning. So much better. Now, if Citi will just roll over, like all the financials should, life will start to make sense again.

Thu, 12/01/2011 - 10:14 | 1934659 OttoMBMP
OttoMBMP's picture

"... EU policymakers to address the underlying problems more definitively than they have been able to do so far."

They want to close the central banks and stop crony capitalism/planned economy?

Well I have kind of a hard time believing it...

Thu, 12/01/2011 - 10:15 | 1934661 Tsar Pointless
Tsar Pointless's picture

It's an open admission by TPTB that things are really really bad, and are about to get really really worse, really really soon.

They're printing dollars and giving them to their crony friends - the same thing they've been doing for three years now, just on a much larger and much more secretive scale. They're rushing toward the exit at a brisk pace, because they know the fire is beginning to engulf the entire structure. They are nothing but rats - they're scurrying as they sense fear is about. Then again, they're the ones that caused the fire, so they should rightfully know that there is fear about.

I don't want to sound alarmist, but...well, I suggest it's time you panic.

No, I am NOT Hugh Hendry.

Thu, 12/01/2011 - 10:17 | 1934669 sabra1
sabra1's picture

if italians and greeks would get off their fat butts and don't kick those technocrats out, which were not elected, we'll all be treated as pawns! there are billions of us, hundreds of them! this won't take long! soldiers and police would join the billions, for they too have pawned family members! DO IT NOW, I SAY, NOW!!!!

Thu, 12/01/2011 - 10:20 | 1934675 SheepDog-One
SheepDog-One's picture

'We're all MoMo's now'... lol! We all depend on Robo's posts now, LULU anyone?

Thu, 12/01/2011 - 10:22 | 1934691 equity_momo
equity_momo's picture

Pull up a chair.

Thu, 12/01/2011 - 10:23 | 1934678 Samsonov
Samsonov's picture

The core of Paul Robinson's inability to undersand is that he has it backwards.  Yesterday's action was not a "market updraft", it was a global fiat currency downdraft.  The denominator of every share price is a currency that is being flagrantly manipulated.  How could there not be volatility?

Thu, 12/01/2011 - 10:19 | 1934680 rambler6421
rambler6421's picture

Just like these European bond auctions.  Yields are coming down.  This is just an exaggeration.

 

libertarian86.blogspot.com

Thu, 12/01/2011 - 10:27 | 1934700 FunkyOldGeezer
FunkyOldGeezer's picture

I don't see the problem trading.

1) Day trade

2) Be reactive rather than proactive

3) Use shorter time-frames

For the markets to be see-sawing means there are still people around to take the opposite side of trades. Is that better than everyone and his dog being on the same side of a trade? I'm just asking.

 

 

 

Thu, 12/01/2011 - 10:34 | 1934725 SheepDog-One
SheepDog-One's picture

Also, spend about 5 million on an HFT server farm to keep up....now we're tradin!

Thu, 12/01/2011 - 13:13 | 1935341 Smiddywesson
Smiddywesson's picture

I don't see the problem trading. 1) Day trade 2) Be reactive rather than proactive 3) Use shorter time-frames

Agreed.  There are huge potential gains in these types of markets for day traders and huge potential losses for everyone else (except insiders).

However, you forgot to list 4) Reduce position sizes to accomodate the fact that price can jump your stops and your position can be wiped out without warnding.

Thu, 12/01/2011 - 10:32 | 1934713 Crassus
Crassus's picture

Yes, even in fixed horse races there are winners.

Thu, 12/01/2011 - 10:35 | 1934731 SheepDog-One
SheepDog-One's picture

True...winners like those who heard Paulson say 'Hand over the money or I send tanks into the streets' and sold stocks and bought gold at $400 at the time?

WINNERS!

Thu, 12/01/2011 - 10:38 | 1934740 Crassus
Crassus's picture

Excellent example.

Thu, 12/01/2011 - 10:35 | 1934728 jay28elle
jay28elle's picture

The Fed or China?  Traders are just tickled it isn't China coming in to buy up all the state utilities and business across the EU.

Thu, 12/01/2011 - 10:42 | 1934753 Don Levit
Don Levit's picture

Buying low and selling high works well in the short-term.

This type of "success", however, is what keeps the markets within relatively tight and finite corrodors.

For the savvy few, they can do well.

For the rest, how can they be successful if this behavior does not result in long-term progress and productivity?

Don Levit

Thu, 12/01/2011 - 10:48 | 1934776 Crassus
Crassus's picture

Ignore Cramer and study Arnold Rothstein and Frank "Lefty" Rosenthal.

Thu, 12/01/2011 - 12:34 | 1935173 Mesquite
Mesquite's picture

>Don Levit..

your question re long-term progress and productivity...

That all went across the water long ago..(and still is going..)

Thu, 12/01/2011 - 10:42 | 1934757 Deo vindice
Deo vindice's picture

"...until one day absolutely nobody will be able to trade the daily gyrations created by ever more frequent central bank intervention."

Not a problem for me. Never traded the stuff in the first place.

Just saved my dollars and exchanged them for PM's.

Put my trust in the Lord, keep my savings in something that has stood the test of time.

Wild market fluctuations simply have no effect on my peace of mind.

Thu, 12/01/2011 - 11:00 | 1934814 Atlas Shrugging
Atlas Shrugging's picture

Laughing out loud that you got a punk junk for simply telling the truth.  Either that, or by an atheist in reference to your statement about trusting in the Lord (sucks to be them on Judgement Day!)

Thu, 12/01/2011 - 10:49 | 1934783 firstdivision
firstdivision's picture

But isn't Goldman and Barclays S&T desks responsible for this run up?

Thu, 12/01/2011 - 11:08 | 1934841 common_sense
common_sense's picture

OHHH YESSSSSS  YESSSSSSSSSS YESSSSSSSSSSSSS

INSERT COIN

INSERT COIN

INSERT COIN

MORE MORE MORE MORE MORE MORE.....QE QE QE QE QE QE QE

SO, END CRISIS OR END GAME? WHO KNOWS...

Thu, 12/01/2011 - 11:09 | 1934847 wisefool
wisefool's picture

I was watching the poor mans CNBC this morning and they had bullard on. He basically said he supported the action, cause it was basically setting up Europe like you would a toddler about to create an adventure (read: temper tantrum). These liquidity swaps are there like they were in 2008. He further said "we are not there ... yet."

snarc/para: Here you go eurochildren. Put on the long underwear. put on the jumper. put on the catchers chest protector. how about those soccor/football shin gaurds? No dont use that baseball bat, ... its too heavy dont you think? ....., how about this snichtzel we were going to throw out any way? Here is a brand new bike helmet, crush characteristics still in tact. Now go forth,  meet up with your freinds. Slay that dragon. tip over that yard ornimate. Try not to take your agression out on each other. I already have the chicken soup and tea on the stove and heating blanket turned up for when you get back ... Oh good, the biscuits are ready right now. See you when you get back! ... Time for teletubbies ... I'll record it for you. good luck!

Thu, 12/01/2011 - 11:15 | 1934860 ugmug
ugmug's picture

The only thing missing from this stock market stampede is the video of CNBC's Jim Cramer getting crushed...first one way...then the other...then back again... as the stock traders can't figure out what side of the trade their on...

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