The Deer Is Back

Tyler Durden's picture

It seems high-yield credit was on to something as we noted last night (here and here). Today's matrix-like collapse in equity perceptions of decoupling and central bank largesse sets up for more of the same as we suspect the ECB will hold off from acting until post-Greek-election to ensure the M.A.D. 'game' remains in place and with rates where they are, Bernanke will have to come up with some magical wording for his next QE raison d'etre. Today's 2.5% drop in the S&P 500 back below its 200DMA, its largest single-day drop in seven months, and the accompanying flood into safe-havens has left Gold and Treasury Bonds now outperforming Stocks for the year (with the Dow red YTD). S&P 500 e-mini futures volume was it highest of the year as we sit at the edge of the waterfall level from last July/August's plunge. Gold's 4% gain is the biggest day since January 2009. Treasury yields plunged to new all-time record lows with 30Y showing a 2.50% handle and 10Y a 1.43% handle. All the high-beta hope names were crushed with financials down 3.7% - their largest fall in 7 months (with the majors even more). VIX jumped 2.6 vols to close above 26.5% at 7 month highs. What is perhaps most disconcerting is the total lack of bounce into the close now two days-in-a-row - deer, meet headlights.


S&P 500 back under 200DMA, biggest drop in 7 months - close to unch YTD (as the Dow closes red for the year)

Gold's 4% rip is the largest single-day gain in 41 months!


and longer-term things are getting scary...

as YTD, Bonds are the winner now followed by Gold and the USD...


Charts: Bloomberg and Capital Context

Bonus Scary Chart: If the relationship between broad risk-assets (TSY levels and curve shape, FX, commodities, spreads, and PMs) from April persists then a longer-term CONTEXT is implying the S&P 500 should be 100 pts lower...


Deer courtesy of Roman

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fuu's picture


battle axe's picture

Fucking Europe. I mean we might be dysfunctional, but they are full on RETARD.

YC2's picture

I cant wait till every half wit boomer thinks the crash that wiped him out was because of "those damn Europeans" and doesnt see that its a systemic problem and that the preceding benefits were due the building up of an imbalance.

Badabing's picture

What is perhaps most disconcerting is the total lack of bounce into the close now two days-in-a-row

once the Bilderberg powwow is over things will be back to ab normal.

xtop23's picture

PPT on standby to force a QE launch apparently

Panafrican Funktron Robot's picture

QE3 is either going to focus on long dated treasuries, or there are a metric fuckton of retards in long dated treasuries.

Caviar Emptor's picture

Remember ZHers:

In today's markets we say : Bulls lose money, Bears lose money but PIIGS will fry! :-)

jonan's picture

does that mean people, like myself, born in the year of the pig will be gabillionaires?

DeadFred's picture

The correct answer is 'Gabacon'

Comay Mierda's picture

Oh how we all missed our beloved deer

the next image ZH should prepare is one of a ceiling fan surrounded by shit-splattered walls

Nothing To See Here's picture

Fuck yeah @ teh.deer

Reminds me of Barney Frank after the 2008 crash. "That was totally unpredictable, blame the unregulated (!) market, blah blah"

sitenine's picture

I'm feeling like a deer right now.

Check this out: Are we there yet? 'Greek Drachma' on Bloomberg ticker (PHOTO)

Tyler, can you give us your thoughts on this interesting happening?  It just seems to me that you don't put your 'test' scenario or info into 'production' platforms without a very good reason.

The Big Ching-aso's picture



A Dough Deer in the headlights which is about to be Michelined.

Darth..Putter's picture

What good will it be to be a "gabillionaire" if you can't buy a sandwich with it? 


This is all the result of the the "Me Decade" anyway.

BorisTheBlade's picture

Which century are you from? Sandwich, really? It is a barbarous relic, civilised people feed themselves by ingesting iPads.

DaveyJones's picture

you can't keep a real currency down

especially when the fake ones' polyester is showing.

Gold is like wool, it helps the sheepish and retains most of its heat in the bad weather.

AldousHuxley's picture

pork bellies and beef are back to 2009 prices.


BeetleBailey's picture

Valentine has set the price.

Bernanke has the G.I. Joe with the Kung-Fu grip - around his scrote sac.

agent default's picture

Nah, the FED will just step in and start buying everything ETFs, equities, fucking Facebook you name it they will buy it.  And then they will lease out their tungsten, gold at negative rates to smash PMs, in order to create the impression that the dollar is worth something.  And then it will all come crashing down, and PMs will be the only thing left.  Got gold? 

DeadFred's picture

The Fed said there would be no more printing while the economy is still inching upward and the market is doing well. The banks said "have it your way'. Ben won't print until everyone is begging him to print. Where is that S&P 1200? 1100? 1000? It won't be at the 200DMA that's for sure.

Caviar Emptor's picture

Read My Hips : No New Printing

Rynak's picture


The Fed said there would be no more printing while the economy is still inching upward and the market is doing well.

The economy has  never been "upwards" in the last 30 years for everything but the elite, and the so called "market" has untill 2011 just been a measure of increased COST for the majority.... so the whole rethorically (or shall i say sophisitically) implied argument, has been deceptive from the start.

The elite will simply print whenever it suits THEIR interests, and is tactically and strategicallly apparently sound, to further the interests of said elite. NOTHING ELSE matters, including the real economy, real monetary price in/deflation and real economic "growth (HAHALOL)/ contraction).

Policy choices are EXCLUSIVLY based on massdeception and gains for the elite, and nothing else.... especially not the fucking real economy, which no one except of average joe remotely gives a fuck about anymore.

rocker's picture

Begging for more QE. The retards must see it to be safer than equities.  I'll just stay in Cash for now.

At the end of May Blackrock (BLK) did a SPO of 26,211,335 shares @ $160.00 a share. Over 4 Billion dollars.

Why would they need all that money.  Are they defending existing positons?  Or do they see something else.

Did they get themselves in trouble. Finky was on Charlie Rose begging people to buy stocks.



Silver Bug's picture

It's going to get interesting.


Charms and Beads

The Gooch's picture

Tornado watch in D.C./surrounding areas right now...

One can only hope... F5 on the Marriot.


The Gooch's picture

Hammer of God.

Or John Bonham.

Bansters-in-my- feces's picture

The "Bilderberg Boogie' you say.

What a bunch of traitorous scum all in the same room.

Makes me sick to think of it.

battle axe's picture

YC2: No body thinks the "crash" was the Europeans fault, my comment was in reference to their current inability to come to a consensus on a common solution, such as a Eurobond. You know the idea that has been floating around for how long? It would take care of their problem but the Germans/Austrians/Fins etc etc will not go for it. 

xtop23's picture

If you were the Germans and rather than elevate the periphery nations to the German standard of living, you would yourself be reduced to the periphery standard of living would YOU endorse Eurobonds?

Merkel would get shot within a week.

battle axe's picture

XTOP23: If I was German I would say hell no, to the Eurobond. But answer me this, what other solution is there for the Euro problem? The clock is ticking......

xtop23's picture

Return to the DM and let the chips fall where they may. It's coming regardless.

battle axe's picture

Hell maybe you are right, but that way there is a lot of blood in the streets. My way maybe not as much.  

Rynak's picture

No there isn't asshole. You're just appealing to short-term pain versus long-term pain. Buy crack today, and get billed tomorrow.

The DM was "this is where we are now, by our own means".... the EUR to germany was "Hey, lets play the game of pretend. Let's pretend, we are worth shit, and let our banks lend to the periphery.... then lets invite globalist multinational megacorps in and advertize us as a new mini-china, from which they can directly export to the periphery.... heck, our banks will even pay the periphery to buy your products, which you get to produce at below-national-cost level in our country. And the creditors shall be happy too, because they get to lend to us, and get to lend on fire to the periphery. And as long as we do not add up the real numbers, our balance-sheet will show us as mega-wealthy and benefiting, while actually, we're just working ourselves to death, AND then get the bill."

TL/DR: "Take this money from me, and buy my wares, and i'll become rich!"

battle axe's picture

Rynak: First, get off the coffee, you get a little too excited. Second, A Eurobond would buy what Europe needs most and that is time, it would extend out the debt that these countries have and lower the payments. An example would be "Brady Bonds" that were issued to help out Central and South America, back in the 80's. This would allow the Europeans to slow everything down, and stop minor things like BANK RUNS. If you have a better solution, I would love to hear it.....

sitenine's picture

battle axe Biography

I was in Institutional Fixed Income Sales, now I am at a hedge fund.

You're not so clever as you think you are with your Eurobond babble.  More debt solves everything in your miopic little world, but most of us don't live there.  Frankly, most of us don't give a shit about your kind or your oppinions.

Rynak's picture

My better solution is: Print 20% of GDP for every nation in the EU, AND then do NOT use it to lend it out to anyone else! Every EMU nation shall then use the printed money, to buy up commodities and take delivery, including PMs. In a matter of one month, develop plans and means to deal with an "aftermath". Do all of this in secrecy as much as possible.

Next, preemptively force a european bank collapse, by letting the chips fall where they may, and use the accumulated (and someway (money) inflation and (economic) depression resistant commodities, as well as the laid out plans and means, do deal with the collapse. Do not attempt to backstop banks going kaboom.... just backstop a reasonable amount of deposits. While you're at it, default on most of the gov loans to global banks.

Then already while the dust is settling, the nations shall announce plans to rebuild their economies, and with near zero national debt, introduce commodity-backed national currencies.

This alone will let most european nations pull an iceland, and in a matter of years by cold hard numbers be more trustworthy than the rest of the world, even if their economies are still in the middle of readjusting and rebuilding.

Unfortunatelly, international elitist influence will quickly want to see blood. So ironically, right after dissolving the EMU, what europe will need more than ever, is cooperation against globalist retaliation. Chances are that they will at first try to isolate europe economically, but if european nations work together on mutual interests, and can keep russia as an ally, such "sactions" will fail and actually boost domestic economies of europe and russia.

Next up, they will switch to more megalomaniac means..... and while the possible outcome include doomsday.... the thing is that this confrontation will come anyways..... it isn't a matter of "if"..... it is a matter of HOW.... and it is the "how" on which all thoughts and preperations should be spend, not on the false assumption of avoidance.

One thing i haven't answered in all of the above, is why i prefer confrontation, over "extend and pretend"? The answer is simple:

IT IS ALREADY TOO LATE. There is no "time" to gain for anything else than to suffer longer. The time to "sort it out" or "fix it" has been passed long in the past. The only question left is how the confrontation happens, not IF!!!! The question is who wins how in the deathmatch, not if the deathmatch happens.

Silver Pullet's picture


I don't think he was expecting that you had "a better solution".

disabledvet's picture


bbq on whitehouse lawn's picture

How about governments are never allowed to barrow money and must rely on donations for any spending. Also how about removing the ability to incorperate since its never in the public good.

Those two alone would fix most of what is illogical in the finacial system.

Rynak's picture

Even if it may surprise you, i completely agree with this proposal, and have proposed just this multiple times before (the "no debt"-rule in various posts, and the "donations"-bit, by proposing a "bottom-up"-funding model as the rule of law for all public spending... meaning, contrary the the concept of "taxes", "higher ups" (on every level, not just the gov) have no authority to command "funding" from lower ups.... instead, every public policy has to be voluntarily funded by the lower levels. So, i.e. a city can only spend what it's population agrees to spend on. A state only gets to spend what the cities (with its population consent) agrees on, and so on up to the national level.

At the time i proposed this, i did not restrict this bidirectional mutualism to capital, but also applied it to lawmaking (basically, the idea was: The "subs" (i.e. population) can always overrule the supers (i.e. state or nation), both by funding as well as policy-design and voting).

What my proposed model ultimately was, was simply "the population decides about the style of "governance", and can always overrule the current one. So, if a population were actually capable of full-blown anarchy, it could do that, and on the other extreme, if a population was willing to allow full-blown dictatorship, it could allow this.... but always with the power to change the current form of society, if it wishes to do so.

Basically, i am not so much interested in establishing specific gov-form anymore, but more in mechanics how to empower to the pop to make possible whatever it wants. I by now think, that the fundamental flaw of nowadays societies does not lie in "which ideology is right for everyone" but instead on the population being deadlocked on some scheme to begin with, and being discouraged to change it if it doesn't like it.

This is not the same as "direct democracy" by law (even though it includes it).... it simply is a desire to let the population anytime simply decide just what it wants, including a "benevolent dictator" as long as it is satisfied with this setup.

Or even simpler: My concern by now is no longer how to implement a supposed "perfect" ideology permanently. Rather, my concern is a system that does not exclude anything, and does allow everything, as long as it is in line with the population. Thus, making the population actually responsible for it's own choices, on all levels of scale.... something which is almost completely absent in nowadays political models.

Flying Tiger Comics's picture

Face(eater)book like button adds one cent to any idea you click like for... Force governments to only have that as a means of funding non-essential expenditure, and reduce non-essentials back to what it should be, which is a very short list.


No more statues to crooked politicians, retard studies, homosexuality promotion, third world mass immigration with automatic welfare, no more handing out passports like halloween candy.


PS it will never happen in this universe. Sadly.

HurricaneSeason's picture

Each country should have their currency backed by a different commodity.  The U.S. could claim they have a huge amount of gold and the currency is backed by gold. The currency wouldn't be directly convertible to gold at a bank due to the handling charges.  Then, France could back their currency with pork bellies. Every bank would allegedly have tons of pork bellies in their vaults, but nobody would be allowed to see them due to health concerns. The French currency wouldn't be directly convertible to pork bellies at the bank, due to health concerns. There could be black market exchange rates at jewelry stores and grocery stores, but they wouldn't truly reflect the value of the currencies or commodities.

Cosimo de Medici's picture

Okay, print approximately $2.7 trillion and then have almost two dozen countries all try to load up on commodities at the same time "in secrecy as much as possible".

Call me a cynic, but I don't think this could be done in any degree of "secrecy".  Remember the land rushes in 19th Century America?  Europeans would shoot down each other's aircraft on the way to Australia or Canada or Angola.


Assuming they somehow got commodities, and had no effect on commodity prices despite their race to throw $2.7 trillion all at once, they would then create a currency whose value was 1/5 of their former GDPs, which I suspect would not quite lead to absorption of Spain's 25% unemployed.

With the collapse of the banks, nobody would have either savings or capital to start a new business, as deposits would go POOF!  And how would you distribute this new commodity backed currency?  Do I get more or less than you?

Please, forget Iceland.  Its example would work only for Bernie Madoff, as it was all based on hoodwinking external capital into Iceland's domestic scheme.  There is absolutely nothing comparable, and no lesson whatsoever, for Greece, Spain, Germany, Italy, etc.

On this site, I find the greatest degree of misunderstanding related to what happened in Iceland.

dougngen's picture

your right, euro bonds would buy some time. more debt to solve a debt problem. but is it the right thing to do? take taxpayer money from other countries to bail out Spanish banks?

no matter what this ends badly, I think your in the first stage of grief... denial.

the bankers need to fail, not be bailed out by hard working Europeans and Americans

xtop23's picture

I get ya man. The problem is, there is NO way this doesn't end bloody.

It's either a conventional explosion or a thermonuclear one. 

Probably too late already.

battle axe's picture

xtop23: Sadly I think you are right, they waited too long....

prole's picture

They waited too long .... to build enough Gulags?

They waited too long ... to call it the EUSSR and make battle ax the new Stalin? (more like Beria)

They waited too long .. to bring the old Machine-gun nest/East German walls back out of mothballs?

Just what exactly did they "wait too long" for Comrade?