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Collapse In French Bonds Implies EURUSD Now Rich By About 1300 Pips
Below we refresh the very simple correlation chart showing the EURUSD and the spread between French OATs and German Bunds, a spread which has soared to all time wides now that France is once again the target of vigilantes on fears of an imminent French downgrade. According to this alone, the EURUSD us now about 1300 pips rich, an ES-implied level of just about 1,000. We expect reality to rear its ugly head very soon.
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And Gold getting creamed. Anyone ponder a guess when these criminals will end the games and let the markest seek their own level?
No, deflation. Breakaway gaps in the metals and mining stocks.
deflation in what sector? core inflation in europe is at 5%!
in the value of your property and whatever you else you call collateral.
"According to this alone, the EURUSD us now about 1300 pips rich, an ES-implied level of just about 1,000."
mhhhh... rich!
Of course everybody talks his book and this is clearly stated in the disclaimer and of course Tyler is talking down the EURUSD to lower levels (IMO it's USD strenght). Might be, might be.
But ES-implied levels? Come on, pull the other one! LOL
This is the kind of my-datamining-helmet-might-not-fit-my-head-but-my-model-does BS which might impress some MegaBanks executives.
What are you feeding the models? Commercial data? When was the last sovereign debt crisis of this kind? We are talking of bets where the involved sovereigns can find 50 ways to spoil them before dinner, excluding Trichet buying for 30 minutes. ES France? This year? A still-first-tier-economy with that kind of history of changing laws? Correlation of ES and non-national currency?
Come on, Tyler, it's exactly this kind of thinking that got the MegaBanks into trouble. It's Master Of The Universe and hist trusty equations talk. Leave it to the Squid.
I hope your trade works - it would definitely open some eyes which have been closed quite long. All the best.
Commodity bubble about to collapse?
The top U.S. derivatives regulator is slated to vote today whether to curb trading in oil, wheat, gold and other commodities after a boom in raw-materials speculation, record-high prices and years of debate and delay.
http://www.bloomberg.com/news/2011-10-18/commodity-speculators-may-face-...
Couldn't come at the worst possible time, ;).
i got out of gold the during the last slaughter. gold will not hold up when this all blows. we are going to have a deflationary tsunami. everything except the dollar will be obliterated.
Tell that to the holders of the Yuan Dynasty's "flying money".
Their third fiat collapse signalled the end of their hegemony. This is our third fiat collapse too, for comparison's sake.
Yeah but, not quite yet.
he's talking about paper gold and I also believe that is going to get a severe hit.
And then how the the US Government pay that debt off? Gotta think more than one move ahead, guy
The US cannot handle deflationary pressures in the present situation. At the slightest hint of deflation watch out for Ben and his helicopter.
I agree but I worry about the time lag between when the deflation hits untils they realize it's here until the helicopter gets its engine warmed up enough to fly. If you hold physical you can snore through that time, if paper you can be vaporized.
There shouldn't be much lag actually, Bernanke is paranoid about deflation and will probably jump the gun, on mere suspicion of deflation. As far as paper silver is concerned, there are several ETFs which hold fully allocated silver, such as Sprott and ZKB. either that or go buy the bars and keep them yourself.
bart chilton came out against his colleagues in suggesting that lobbyists and banksters are manipulating legislative efforts to undermine dodd-frank
http://www.tnr.com/article/politics/95818/dodd-frank-lobbying-cftc
Dollar strength is probably the signal the FED is waiting for to officially launch QE3. This is far from over.
Never. They will maintain their death grip on the paper markets until they implode.
Bound to happen eventually.
http://youtu.be/qz3TcxTblyg
isn't this Mr Parity calling?
Holy fuck, put your crash helmets on. When that sombicth slams shut it will be quick.
1.32 on the EUR was 1075 S&P. 600 pips on EUR was good for 150 S&P points. drop EUR 1300 pips and S&P could lose 300. S&P 900 anyone????
Fixed it for you.
SARKO-PHAG
vigilantes is such a harsh term, I'm very nice
Anyone care to pull up this chart further out in time, say 6 month to 2 years? Trading on a 2 week correlation seems a little iffy.
Refreshing Kevin, your an optimist! Uugg, 6months? 2 years? wow! Did you just open a retirement account recently? Just jokin, I can't see that far down the rabbit hole right now.
III
Gold bulls better start praying for a massive rally in financials and Dow 15,000 by the end of the year.
given all the gold. gold stocks and silver you say you have are you on your knees praying? didn't think so.
btw, i guess your dow 15,000 / gold $2000 formula is back in play after you rescinded it earlier this year.
Pay some detailed attention to the entire intraday action of gold and silver. They are up when Asia is open and start trending downwards when London and NY open. It is the western markets that are liquidating, probably trying to raise cash, and the Asian markets buying. If this trend keeps up, Asia will have sucked up PMs on the cheap from the west, and then the shit will start to hit the fan for real.
when this tide goes out we're gonna discover some people never had clothes to begin with. (the other ones prefer swimming naked of course and will not be embarrassed by it.)
Mind the gap!
95bp FRA/GER 10yr spread yesterday, and over 110bp today. Lol.
13%? I guess the banks and the dominoes begin to fall next week in Europe, which aligns with what I'm thinking. Went short Europe today.
Future threat of deflation + spiking dollar not good for gold or silver... espescially with high inflation keepin uncle ben off the printing press... atleast for a little while
Big Panda still doesn't have enough of those superlicious Euros:)
Waiting for Godot. Got out of oil last week. Riding the range...TZA anyone?
What exactly is the relevance of the BGN (Bulgarian Leva) in this chart?
This is the Tylers' #1 speculation. Iow, talking their book again.
During the last run went mega-short on the Euro (EUO), Russell 2000 (TWM) and the S&P 500 (SPXU). Looks like Christmas comes early this year. Also, quit fretting the PM correction, since it just affords a better buying opportunity.
Would love to see this chart with a bit longer timeframe to confirm the correlation. Otherwise, who is to say which part is the anomoly?
What time of day do the rating agencies announce their downgrades on Europe? Is it always after US close? I'm just wondering because that drop looks a lot like front running and the ratings agencies are pretty bad at keeping secrets.
Would a French downgrade essentially precipitate the end of German support for bailing out the weak sisters of the EMU? A death to the Euro?
The FED was only a few votes away from an offcial QE3 not so long ago, if there is another crash the public will beg for another QE, of course deflation is lurking around the corner its the nature of this beast but our chairmen will do whatever it takes to combat deflation as this has been pointed out time and time again