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Debt Divergence Dominates Dull Day Even As FaceBerg Sinks Deeper
The 4th day in a row when US equities disconnected (rallied) from credit markets - will this reversion be different. NYSE volumes were dismal (near the year's lowest) which seemed the perfect recipe for some stock-ramping tom-foolery - apart, that is, for FaceBerg of course. Yesterday's futures action in sync with global risk-assets continued into the morning with Europe open but TSYs led markets lower in the US pre-open until the plethora of miserable macro data was enough to spur the bad-is-better brigade who bid stocks up into the US open and just beyond only to see Spain's downgrade drag the spirits of every Treasury, FX, credit, and commodity trader down. The flush into the European close was the lows of the day for stocks (and TSY yields) with the former accelerating back up to its highs of the day by the close and the latter leaking higher in yields and filling the divergence gap. However, IG and HY credit spreads were far less sanguine than US equities in the afternoon even though HYG swung from significantly cheap to its fair-value (and stocks) to considerably rich by the close. EURUSD managed to get back over 1.25 at the close which seemed to provide some comfort that everything wasn't crash landing and while the USD implicitly weakened into the close (to end unch from Friday), it did little to redeem commodities back from their European-close plungefest. Treasuries ended higher in yield marginally from Friday's close while ES managed +1.4% potentially on the back of window-dressing - even though heavy volume came as equities crossed the trendline support. VIX fell less than 1 vol and held above 21% while Facebook vols were skewed 65%/55% (Put/Call) and volumes 5 to 4 in favor of Puts as it closed -10% at its lows.
Stocks (blue) have diverged from the CDS markets once again (orange curves). HYG (green) did its best to support stocks today though (even as HY and IG flatlined this afternoon)...
which leaves HYG notably rich to its fair-value and stocks...
and stocks remain in a world of their own relative to commodities and FX markets (though Treasuries did sell-off modestly back to try and close the gap - in a small range)...
leaving Silver and gold down from Friday's close, Oil unch and copper scrambling back up a little at the close...
which is intriguing given the USD is ending the day UNCH from Friday's close.
but Facebook saw heavier volume than the last few days and its biggest down day in a week...
and even in S&P 500 e-mini futures today, we saw modest volumes but small average trade size in the rally (yellow bars in the orange oval at right - h/t @eminiwatch) and heavy volume and average trade size as we reached the day's highs and the up-trendline...
Charts: Bloomberg
Bonus Chart: US financials post completely unsubstantiated ECB rumor from last Wednesday...JPM and Goldman both retraced almost the entire rally before today's surge and now BofA is up 8%...sustainable?
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All your investment are belong to US!
Chinese are ya.
It's this meme.
"All Your Base Are Belong To Us"
http://www.youtube.com/watch?v=qItugh-fFgg
In three months, the employees of the FartBook company will sell, let's see if Morgan stanley will support the fartboy.
Sell to who? ALgos? They need some positive headlines before they will go long.
"May Day! May Day! All Faceboat hands on deck! All Faceboat hands on deck!"
"What deck?"
DJIA up 125 my chicken little doomers, Bernanke put 4evah!
/sarc off
Not dull for watchers of paper shenanigans. Some excellent chart painting on the PMs there, just in time for the COT.
It seems like they pushed gold down to it's primary support line in the sand while huffing and puffing and fluffing via HFT and short squeezing the /ES up and away from it's correlation with gold, creating room to flush the /ES down hard and hoping to crack that critical gold support line and trigger a plunge... or so I'm thinking.
FaceFart captain reminds me of the guy that ran the Exxon Valdez into a giant avoidable mapped reef & said it was an accident.
I thought he looks like that zombie that shot that female senator in Arizona.. kinda looks unpredictable like he might flip channels without warning.
If you lose money trading equities you are an idiot!
Just buy and then sell anywhere from 1 fantasecond to one century later. They will always be higher.
Ah, Utopia at last!
I thought that the stockmarkets were supposed to have crashed by now? Every day I read doom and gloom reports about how the DOW, NASDAQ and FTSE are supposed to crash - but up they go.
Retail investors have supposedly left the markets, corporate insiders are supposedly selling... but up the markets go.
With you on that. Check my join date - the genius of ZH has reigned supreme.
Should the market follow any "logic", they would be correct. But there is no logic. With HFT, the manipulators have effectively conquered any rhyme or reason to the continual rise in the markets.
And while I LOVE ZH - they should disclaim every post with: "Yes, logically this should be the outcome. But lacking "insider" status, we have NO f-ing clue WTF will transpire."
Financial anarchists are awesome - but, given the power of the "powers what be", they have proved themselves to be worse predictors of the "market" than Cramer and his jerkoff writers.
Yes, we're all waiting on the Apocalypse. Until then, zero the hedge and prepare for the "doom" that awaits us all :)
The status quo are WELL prepared to retain their status quo - as the common government bailouts have proven.
Again, "Let them eat porn!" Or fuck off on fuckbook.
Other than that, just piss in the wind.
Collusion is never sustainable...it usually only takes one defector to bring it all crumbling to the ground. Long-term, markets will regain their senses.
I hope you're right - then again...
There have been 12 monarchs of Great Britain and the United Kingdom (see the Monarchy of the United Kingdom). The United Kingdom of Great Britain was formed on 1 May 1707 with the merger of the Kingdom of England and the Kingdom of Scotland, which had been in personal union under the House of Stuart since 24 March 1603. etc. etc. etc.
We exchanged our Republic for an AristoDemocracy a while back. And it appears we're all too comfortably civilized to start shouting "off with their heads!" :) And half the country is too scared of what the other half might do if they actually voted to "Throw the bums out!"
Pretty sweet set-up if you ask me. Again, hope you're right about finding a crack in the collusion - but it seems to me they've done a fairly thorough job of sealing themselves into power :)
Do you know what volume means? Probably not.
Please change "sinks" to "dives" in the title, for additional alliterative awesomeness.
For some reason, I am a fan of "plunges"
Myself, I'm a fan of plungers. They aren't afraid to do the shitty work.
Thank you, I'm here all week. Try the veal.
Yeah, but they need alot of pushing and sometimes they spit back at you. But they are the only ones for the job and they know it.
+1 more share =)
I see gold and silver got fucking HAMMERED today for NO reason other than manipulation by timmy and ben with thier Exchange Stabilization Fund.
You Little fucking Weasel timmy and you piece of fucking mouldy shit benny boy.
With the blessing of the USA govt....
Sachs of shit.
Hope & Change. Plenty of hopium voting AH's on ZH. I just Hope the face eating ACORN/SEIU zombies visit them soon.
F Them!
whats with all this swearing on ZH recently.. doesnt make good reading, really.
Fucking noobs.
We don't call it swearing here. More like profunity.
Crash N Burn
today i closed my C.I.A.-monitored FACEBOOK account & also purchased silver with worthless pieces of colored paper ; i feel empowered .
I closed my Facebook account today as well. My phone and my porch await all my old friends!
-crickets-
I'm not nearly as popular in the real world... and it matters not one bit to me, as long as it's real. The pursuit of truth is always taken alone.
With Spain's financial genius displayed over the weekend, ...
... the stock markets could only give in to their animal spirits (HFT algos) and hit the up ramps.
In related news, sources indicate the City of London Banker's Association is considering taking legal action against the Spainish Finance Ministry for infringement on intellectual property. One highly placed insider speaking upon condition of anonymity stated,
"The algorithm incorporating the spread between the bunds and Spainish bonds as an open ended integral with the upper limit set to infinity and the lower limit being the second derivative of the formula used to correlate the CHF peg to the negative interest rate on Swiss bonds has been in place and in use since last September. The plaintiffs have a prima facie case of IP theft."
The Spainish government refused to comment on the pending legal action.
barliman
Name a major predator who (bogus legend holds) lost all they owned in the Great Depression and I'll name someone who will lose all they own in our Great Recession.
Other than that, I won't bother looking it up.
So keep betting on the market. It will always remain TBTF and remains a no-loss proposition for the status quo.
There is no bottom for the feeders - trust that.
You may have the right to bear arms. They bear the right to nuclear arms.
No end in sight for the status quo. May Paris Hilton reign forever!!!!
"Let them eat porn." And Facebook :)
http://tinyurl.com/watch-farcebook-go
almost as depressing as the gold/silver charts this year.
definitely much more painful considering how much i've invested in PMs.
Save your depression for later when like the world ends or something half-way similarly important.
Faceberg.. lolz
Thanks Tyler, made my morning. Going to talk about that all day.. and pretend its my own material :P
Just keep buying Silver.
Thanks, the daily wrapup posts are the most valuable ones (particularly to those of us who can't afford or use a Bloomberg terminal of our own). Do you think Facebook is going to rally back up into the 40s before it finally falls to fair value under 10? Most of what I've seen, especially in metals, suggests that the pro-status-quo, anti-common-sense trade will return fiats - but if this is really the Titanic, I'd rather stay away.
So, Zukerberg calls Balmer, can you imagine the call?
MZ: Hi Steve, I just got back from Honeymoon and thought I would give you a call. Hey, are you guys interested in offloading IE?
Steve: Well, we did not plan to, but considering we just lost our number one position to Google Chrome, yeah, maybe. Why would you want to get into that space its really crowded?
MZ: Oh, we need to pacify the markets and come up with some kind of plan, at least that's what the board keeps shouting at me from down there near the serfs. And what about Windows Mobile, could we buy that too?
Steve: Well, we did not plan to sell that, but considering everything we do in the space we get slaughtered, yeah, maybe. Why would you want to get into that space its quite mature with powerful existing dominant players with brand loyalty and great products and services?
MZ: Oh, we need to pacify the markets and come up with some kind of plan, at least that's what the board keeps shouting at me from down there from the basement. And what about Bing, I know our talks broke down last time, but I think it is worth another look, do you?
Steve: Well, since we have launched so many search engines and they all seem to fail, that might be an option too. But why would you want to go there, I mean its very tough space to get market share, let alone take any of Google's dollars away?
MZ: Oh, we need to pacify the markets and come up with some kind of plan, at least that's what the board keeps shouting at me from out there in the employee cafeteria. Well should we look at one or all of the options?
Steve: Oh, I don't know Mark, what dollar figures are we talking here?
MZ: Well, as you know I can make any offer and make it binding during this phone call, I have full say, I don't have to answer to anyone. Now I understand you will have to go to your board, so let's just start with the structure. We would be willing to do an all share deal or swap.....and
Steve: [Click}
MZ: Hello Steve? Steve? You there Steve? Hello?.....................................
Funny - too bad hardly anyone will see it. This article will be buried by the AM. if you're into satire, contact me at crashx at crashx dot com.
Love this site, but wish it had more "community" functionality :) Comments here (other than mine) are usually fairly insightful or entertaining.