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On The Difference Between Bonds, Equities, And Gold; "No-QE-Without-A-Crash" Or "Flow Vs. Stock"

Tyler Durden's picture




 

Is the reality of different time-horizons and event discounting really starting to tell on markets? Equities have now sagged back lower while Treasury yields are accelerating lower and Gold higher. It seems that stocks fully comprehend that QE does not come without more pain in the short-term and are starting to price for that - while given the low/no cost of carry for Treasuries and Gold, the eventual reality of further financial repression and money-printing can be discounted in from longer maturities. It seems somewhat in-the-stars that the Fed will do more as they have convinced themselves that all is well with their extreme policies and short-term benefits outweigh ultimate costs, but this afternoon's disconnect between the QE-to-the-moon feeling in Gold and Treasuries and the QE-not-so-soon feeling in Stocks may well be a trend to watch as the only sure thing is when not if The Fed acts.

The key, we suspect, is the fast money in equities awaiting the 'flow' (which is not coming soon); relative to the slower money in Gold and Bonds knowing the 'stock' is coming eventually

Gold up, Stocks down, Treasury yields down, USD down in last couple hours post Europe...

 

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Fri, 08/31/2012 - 13:33 | 2753265 tsx500
tsx500's picture

maybe OT ,  but ..... SUCK IT BERNANKE !!!

Fri, 08/31/2012 - 13:50 | 2753328 WhiteNight123129
WhiteNight123129's picture

Has Tyler talked about Shamoon virus attack supposedly from Iran on Qatar Gas installations? That was on the FT, right?

 

Fri, 08/31/2012 - 13:53 | 2753332 Michael
Michael's picture
Japan plans to cut state spending, could run out of money in a month Japan's government is planning to suspend some state spending as it could run out of cash by October, with a deficit financing bill blocked by opposition parties trying to force Prime Minister Yoshihiko Noda into an early election.

http://www.telegraph.co.uk/finance/financialcrisis/9510811/Japan-plans-to-cut-state-spending-could-run-out-of-money-in-a-month.html

http://www.drudgereport.com/

Fri, 08/31/2012 - 14:08 | 2753374 Michael
Michael's picture

Thanks for the heads up.

Fri, 08/31/2012 - 14:15 | 2753399 john39
john39's picture

anyone really believe that Iran is behind it?  it may be painted to look that way... but this sort dirty trick can only come from the big gorilla and or its handler in the ME.

Fri, 08/31/2012 - 13:36 | 2753280 SHEEPFUKKER
SHEEPFUKKER's picture

QE to the moon....just like Neil Armstrong. 

Fri, 08/31/2012 - 14:17 | 2753403 malikai
malikai's picture

QE will bring the moon to us.

Fri, 08/31/2012 - 14:25 | 2753421 Dead Canary
Dead Canary's picture

QE. TO INFINITY AND BEYOND! Like Buzz Lightyear.

Fri, 08/31/2012 - 15:47 | 2753659 mac768
mac768's picture

Just wait until gravity gets Spain back to earth ...

Fri, 08/31/2012 - 13:36 | 2753281 techstrategy
techstrategy's picture

Actually, I suspect it is a far more profound move related to underlying confidence in the system writ large.  We will see...

Fri, 08/31/2012 - 13:40 | 2753293 techstrategy
techstrategy's picture

Tyler:  You'd come to a different conclusion if you looked at the YTD performance of MOMOs (QE trade) versus gold.  Your longer term correlation charts would remove the anchoring and availability biases from the analysis.  The whole reason we've had this run is so that the big boys can sell from an arbitrarily high starting point, devoid of fundamentals or reality...

Would love to see a LT (say 1 years since the peak of the last Euro crisis) chart of gold, treasuries, value stocks, dividend stocks and growth (MOMO) stocks.  I think you'd find it enlightening...

Fri, 08/31/2012 - 13:48 | 2753320 malikai
malikai's picture

You're probably on the right track. What I'm seeing in the disconnect from Gold/Treasonries/Equitables doesn't make human sense. But to draw an analogy here, let's go back to 2008 when we had a run on gold/oil just before it all collapsed back down. Meanwhile, stocks were grinding lower the whole time.

Fri, 08/31/2012 - 13:36 | 2753283 Buckaroo Banzai
Buckaroo Banzai's picture

"...but this afternoon's disconnect between the QE-to-the-moon feeling in Gold and Treasuries and the QE-not-so-soon feeling in Stocks may well be a trend to watch"

Why does there have to be a disconnect? Who says that stocks aren't pricing in QE? Frankly this market should be down by 50% already based on how corporate profitability (or lack thereof) looks right now for the next 12 months.

Fri, 08/31/2012 - 14:04 | 2753364 Papasmurf
Papasmurf's picture

stock profitability compared with what? ZIRP?

Fri, 08/31/2012 - 13:37 | 2753285 Dr. Engali
Dr. Engali's picture

Dumb ass robots ...looks like they cost me a turkey sandwich.

Fri, 08/31/2012 - 13:37 | 2753287 Habyarimana
Habyarimana's picture

hi Ben ,need a chopper ?

 

Fri, 08/31/2012 - 13:39 | 2753289 SheepDog-One
SheepDog-One's picture

No, as Heller said 'No QE until 'fiscal cliff' is resolved', clearly meaning between the lines neither is going to ever happen. 

Fri, 08/31/2012 - 13:53 | 2753337 daily bread
daily bread's picture

Just as, when Merkel says "no bonds before I die" .. we should read neither is ever going to happen?

Fri, 08/31/2012 - 13:55 | 2753340 SheepDog-One
SheepDog-One's picture

SO what youre saying is you believe Clowngress is actually going to do anything about the 'fiscal cliff'? I wouldnt advocate holding my breath on it.....the only thing they know how to do is kick the can.

Fri, 08/31/2012 - 14:05 | 2753367 Papasmurf
Papasmurf's picture

This is a game of chicken between a semi and a gasoline tanker.  There are no winners in this game.

Fri, 08/31/2012 - 14:49 | 2753492 viahj
viahj's picture

don't be "in the game" just get a tow truck, drive the wreckage to the scrap metal yard.  always some way for someone to gain.

Fri, 08/31/2012 - 19:30 | 2754154 FanCap
FanCap's picture

Short the semi transportation company and long oil would both win....

Fri, 08/31/2012 - 16:36 | 2753778 Jake88
Jake88's picture

Dude you are seriously challenged.

Fri, 08/31/2012 - 14:37 | 2753455 El Oregonian
El Oregonian's picture

... Or, until there is enough fiat money pushed over that "Cliff" so the fiat money pile will be large enough to cushion the impact once it comes crashing down... Silly Banksters, they just do not understand. Regardless of the ACME tools the Coyote (Bernanke) uses to avoid the inevitable impact, the Roadrunner (Market Collapse) will ALWAYS out-run him and will lose in the end.

It is sad that these idiots have turned themselves into cartoon analogies.

Fri, 08/31/2012 - 13:40 | 2753291 not fat not stupid
not fat not stupid's picture

Crisis jerks forward to mid-September catalysts. Big moves out of that time zone.

Fri, 08/31/2012 - 13:43 | 2753304 hyper-critical
hyper-critical's picture

Unless it falls in on its own weight. I will SPLK all over the screen if it happens this afternoon...and gold stays bid...

Fri, 08/31/2012 - 15:22 | 2753568 DosZap
DosZap's picture

With the remarks by Bernie,I see no QE at, or after JHOLE.The Dallas Fed Fisher,has already screamed NO MAS.

Remember, do not chase the metals............................once these morons figure out it ain't a comin YET,the retracement begins.(IMHO)

Fri, 08/31/2012 - 13:40 | 2753294 lieutenantjohnchard
lieutenantjohnchard's picture

gold, silver and tackle football: priceless.

Fri, 08/31/2012 - 13:41 | 2753297 pragmatic hobo
pragmatic hobo's picture

I'm seriously thinking about gobbling-up some GRPN shares. Any opinions?

Fri, 08/31/2012 - 13:50 | 2753327 pods
pods's picture

ROFLMAO!

Fri, 08/31/2012 - 13:52 | 2753335 ParkAveFlasher
ParkAveFlasher's picture

Wait for a bargain! [sarc]

Fri, 08/31/2012 - 13:56 | 2753344 Alex Kintner
Alex Kintner's picture

I know it looks tasty here but... Well, go ahead but chase it with a tall glass of Metimucil.

Fri, 08/31/2012 - 13:41 | 2753298 yogibear
yogibear's picture

Benny Bernanke and the Fed said they will keep printing/devaluing the US dollar.

The Federal Reserve will be the only buyer of US debt. How long can that go on for?

Soon people will realize the US is in default, by the mere fact of printing and nobody buying US debt.

When the house of cards collapses overseas banksters will pickup anything for a fraction.

Fri, 08/31/2012 - 13:45 | 2753314 LawsofPhysics
LawsofPhysics's picture

"overseas banksters will pickup anything for a fraction"

Better find a solvent one first.  Say it with me, "credit default swap".

Fri, 08/31/2012 - 13:50 | 2753305 SheepDog-One
SheepDog-One's picture

'Stocks down'? I mean if youre going to say stocks are down should they at least be showing red on the day instead of up about +.5% or so?

Fri, 08/31/2012 - 13:46 | 2753306 q99x2
q99x2's picture

So the Moron, dethroned, ChairSatan himself, won't QE because the mechanism to be used to transfer the wealth of a country to his banker friends will cause damage to the Totus, or, Pig Will, the algos have defeated the "Gold bedamned suck it Bernanke," because the only thing he can do is raise markets.

Fuck you algos. Eat your banker brethren. And, fuck you Bernanke too.

Fri, 08/31/2012 - 13:44 | 2753310 fuu
fuu's picture

<-- Over $1690 today

<-- Under $1690 today

Fri, 08/31/2012 - 13:53 | 2753329 malikai
malikai's picture

1% rule? lol.

Fri, 08/31/2012 - 13:56 | 2753342 fuu
fuu's picture

We are well beyond 1% already today.

Fri, 08/31/2012 - 14:29 | 2753437 malikai
malikai's picture

Just pointing out that the notion of capping gains is, shall we say, less than plausible.

I'm looking forward to the day when +1% = +$100.

Fri, 08/31/2012 - 13:57 | 2753348 ParkAveFlasher
ParkAveFlasher's picture

<shiny still

<shiny no more

Fri, 08/31/2012 - 15:47 | 2753656 exi1ed0ne
exi1ed0ne's picture

<Glinting from the bottom of the lake

Fri, 08/31/2012 - 16:14 | 2753722 Haager
Haager's picture

And the asia session on monday will bring it back down to 1640 at least.

Fri, 08/31/2012 - 16:22 | 2753734 fuu
fuu's picture

$50+ fall by Monday, gotcha.

Fri, 08/31/2012 - 13:44 | 2753311 Bernard_2011
Bernard_2011's picture

Tyler,

You are very smart, but with regard to your recent past comments on QE3, it would be best for yourself if you would stop digging a deeper hole with your interpretation/spin, as your credibility is being really damaged here. 

You know and I know that if the ISM and payrolls data next week show the same level of past strength or worse (ISM sub-50 or payrolls sub-100K), then QE3 will be announced on Sept. 13th.  Gold is surging based on the shorts covering in advance of the Tuesday ISM data (who the hell would want to be short gold going into that?).  It is now hair-trigger sensitive to any economic data going forward (given that the bar has been effectively lowered for QE3---a recession is NOT required for it).

All the best,

Bernard

Fri, 08/31/2012 - 13:48 | 2753323 fuu
fuu's picture

7 posts in 97 weeks, and this is your only one in 2012. Thanks for chiming in!

Fri, 08/31/2012 - 13:49 | 2753324 SheepDog-One
SheepDog-One's picture

Oh really, 1 little fudged govt number will now greenlight the QE? Horse shit.

Fri, 08/31/2012 - 13:54 | 2753339 Confundido
Confundido's picture

Bernard, I am amazed at the fact that the gringos give so much credit to activity data from the private sector. In Latin America, if we know our government has more than a trillion/yr deficit and the governor of the central bank tells us he's looking at unemployment data to decide whether or not to monetize the so said deficit, we would laugh mercilessly at him. How the fuck is it possible that in the developed world people still believe in fairy tales? Anyway, was lucky and bot gold at $1,649/oz, on algorithmic weakness...

Fri, 08/31/2012 - 13:45 | 2753312 chaartist
chaartist's picture

offtopic but I think important:

SLOVENIAN PM JANSA SAYS SLOVENIA IS GOING TO DEFAULT IN SEVERAL WEEKS

The Slovenian government can possibly pay their bills only a few weeks. This Prime Minister Janez Jansa conceded in an interview with Internet portal siol.net

"In October we threatened with insolvency if we do not manage to sell bonds," said Jansa. Already, Slovenia could no longer finance on the capital market, said the conservative politicians. The borrowing was "virtually impossible".

http://www.tagesschau.sf.tv/Nachrichten/Archiv/2012/08/31/International/...

Fri, 08/31/2012 - 13:46 | 2753316 resurger
resurger's picture

 the last 10 minutes of trading today should be fun...

 

Fri, 08/31/2012 - 13:48 | 2753322 Alex Kintner
Alex Kintner's picture

Eastwood bounce in Dementia stocks. Plus Clint closed his FB account after all the kidding. FB down 5%.

Fri, 08/31/2012 - 15:39 | 2753629 DosZap
DosZap's picture

Eastwood bounce in Dementia stocks

Dementia?, the man was hysterical, and still starring damn good movies and Directing.

Everthing he said had a meaning, the empty chair(suit,no results worthwhile from O),and the Teleprompter in front of the chair.

Classic

Plus he did all of it off the cuff.............the guy is still THE man.

Wonder how well you handle that kind of crowd, and write nothing down at 82.

Obozo isn't a drop of sweat of his nutsack.

Character matters.

Fri, 08/31/2012 - 13:54 | 2753338 ekm
ekm's picture

Reposting:

Mark my words:

NO COCAINATED EASING UNTIL WTI CRUDE OIL AT $60 .......AT LEAST OR BRENT CRUDE AT $75 .......AT LEAST.

 

All Benny and Jon want to do is: SAVE PRIMARY DEALERS, nothing else. They are both trying to lure INSTITUTIONAL SUCKERS, since they already sucked all retail money.

That's it. They want to sucker hedge funds into buying stocks from Primary Dealers and let hedge funds collapse. Ain't gona happen.

They will try, and try and try and try and try...........................but hedge funds have smartened up. They have not made any money recently as Zerohedge has made that plainly clear.

NO MORE SUCKERS, RETAIL OR INSTITUTIONAL, PERIOD. They are getting more and more desperate.

Fri, 08/31/2012 - 14:01 | 2753358 Meesohaawnee
Meesohaawnee's picture

yup. you did call it!! very vividly remember. and cnbs is their fuckin piece of shit lap dog to help.

Fri, 08/31/2012 - 15:31 | 2753603 debtor of last ...
debtor of last resort's picture

Let's wait till R2D2 does the opening "boing" on Wall Street.

Fri, 08/31/2012 - 13:56 | 2753343 HaroldWang
HaroldWang's picture

Should see some serious short covering into close today taking it much higher. Everyone has left the building and the machines that were programmed for quick scalps short are all now covering.

Fri, 08/31/2012 - 13:59 | 2753353 mrdenis
Fri, 08/31/2012 - 13:58 | 2753349 wonderatitall
wonderatitall's picture

all will be well....gentle ben the magician and his lackey the food stamp and empty suit prez have all in order.....or are you racist?

Fri, 08/31/2012 - 14:00 | 2753354 e-man
e-man's picture

In 1929, everybody and their dog was invested in the stock market.  When it crashed, most people lost everything they had.

Today, if the stock market crashed, I have to imagine that only a dozen or so firms would lose their capital. 

Fri, 08/31/2012 - 14:03 | 2753361 SheepDog-One
SheepDog-One's picture

Well dont foget what the 'stock market' is mostly comprised of today, 401K's and pensions.

Fri, 08/31/2012 - 14:05 | 2753366 billsykes
billsykes's picture

Give it 5 maybe 6 yrs and there will be no such thing as a stock market with retail or brokers, basically no human will place trades.

Why would a legit company even think about going public now if they cannot get at least 3x above sector pe's?

Time the lift is off, the stock would be at a regular pe, hopefully long enough to sell all your shares.

All this shit could be fixed with a captcha code.  

How fucking retarded do you have to be to work at the SEC?

Do they give you a helmet and and a juice box when you start?

 

 

 

Fri, 08/31/2012 - 14:06 | 2753369 youngman
youngman's picture

Ben is going to have to QE III and on and on and on....for people to pay for food.....looks like commodities are going up quite well....the average joe will not be able to buy gas or food in the future.....so QE it baby.....SNAP to the moon...GAS SNAP too

Fri, 08/31/2012 - 14:10 | 2753381 SheepDog-One
SheepDog-One's picture

Youre saying Bernank is just reacting to things, figuring out ways so people (about 50% of americans) can buy food? Nah theyre just monetizing the debt thats all. Basically done with that too so I'd watch out for the unexpected real soon and forget pricing in the future.

Fri, 08/31/2012 - 14:11 | 2753387 Meesohaawnee
Meesohaawnee's picture

he cant buy gas today being the computers ramped crude to near 98 on nothing at all. Good thing the margin hiker in chief got a good look at those speculators. Hello joe six pack. how ya like that big dildo up your ass for labor day weekend? Best always sucka. Signed Wall street

Fri, 08/31/2012 - 14:18 | 2753408 Aquaman
Aquaman's picture

Bernanke is brilliant. They essentially have the market at a Mexican standoff and everyones pissed.  The shorts (like me) are mad cause dammit we want our crash so we can have out money now.  The longs are pissed because....well they spent all this money to drive up prices and they want their money NOW.  Say what you want, I certainly dont agree with his policies.  You have to admit, the man has us standing around like a bunch idiots....and we aren't going anywhere.

Fri, 08/31/2012 - 14:40 | 2753460 Haager
Haager's picture

I don't agree, I don't know who others think about that but I think it's kind of too much heroism to call him "brilliant".

My brilliant move is to be short on money and long on patience.

Fri, 08/31/2012 - 15:13 | 2753539 Aquaman
Aquaman's picture

Your brilliant plan is the same as my brilliant plan, and yet here we sit.  His plan his to sucker in the holdout retail investor.  This has never been about helping people.  He could have given 5T bucks to the people and everyone could have paid their mortgage and the money would still have landed in the banks.  No, his plan is to get ALL the money back to the banks and leave us holding the bag and its working. And we are sitting here taking it.

Fri, 08/31/2012 - 14:57 | 2753507 bnbdnb
bnbdnb's picture

I wouldnt exactly call biflationary stagflation a brilliant plan.

Fri, 08/31/2012 - 14:20 | 2753413 ptoemmes
ptoemmes's picture

See any similarities: http://www.youtube.com/watch?v=aboZctrHfK8

I do, but then I think I see dead people too.

 

 

Fri, 08/31/2012 - 14:28 | 2753431 lolmao500
lolmao500's picture

Somehow the dollar doesn't like not being devaluated? LOL?

Fri, 08/31/2012 - 14:29 | 2753436 RiskAverseAlertBlog
RiskAverseAlertBlog's picture

Frontrunning euro run?

Fri, 08/31/2012 - 14:29 | 2753439 Meesohaawnee
Meesohaawnee's picture

Todays REAL message from Jackson.. "SHORT BAN STILL IN EFFECT UNTIL FURTHER NOTICE".. signed... ben

Fri, 08/31/2012 - 14:58 | 2753509 YouAreBliss
YouAreBliss's picture

Everything is ripping to the upside - Stocks, Bonds, Gold - IT A PRINTFEST PARTY!!!!

Fri, 08/31/2012 - 15:17 | 2753553 devo
devo's picture

The market is rising because of ETFs, right?

Managers forced to buy stocks because they're in an index someone is purchasing...

I mean, who can honestly believe Walmart, MO, or T are even average values right now. Question is: how does this crash? Lowered earning estimates doesn't seem to dissuade the market.

Fri, 08/31/2012 - 15:36 | 2753622 Martdin
Martdin's picture

Takin bets on when the next CME margin hike comes

Fri, 08/31/2012 - 16:10 | 2753712 onebir
onebir's picture

Why did gold do so much better than everything else???

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