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
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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
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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
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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
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"...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
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stock profitability compared with what? ZIRP?

Fri, 08/31/2012 - 13:37 | 2753285 Dr. Engali
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Dumb ass robots ...looks like they cost me a turkey sandwich.

Fri, 08/31/2012 - 13:37 | 2753287 Habyarimana
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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
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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
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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
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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
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Short the semi transportation company and long oil would both win....

Fri, 08/31/2012 - 16:36 | 2753778 Jake88
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Dude you are seriously challenged.

Fri, 08/31/2012 - 14:37 | 2753455 El Oregonian
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... 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
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Wait for a bargain! [sarc]

Fri, 08/31/2012 - 13:56 | 2753344 Alex Kintner
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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
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"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/...

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