Egan Jones Jars Market Out Of Rumor Hypnosis

Tyler Durden's picture




 

While European, US, and commodity markets (ex-Spain) were enjoying the hope/hype of ECB rumors and QE chatter, Egan Jones just burst the bubble, back to reality. Within minutes of their downgrade of Spain, EURUSD was plunging faster than Facebook and along with that cornerstone of correlated risk markets, gold, silver, oil, copper, and US equities had smashed lower.

EURUSD was not happy...as the headline hit BBG (10 minutes after we posted it here)...

 

and commodities reacted...

 

Before all of this reality-checking, our European EOD was thus:

ECB Rumor Pushes Europe Ex-Spain Higher

In the same way that Mrs. Lincoln was unable to enjoy the play, we fear Draghi, Barroso, and Rajoy did not enjoy today's broadly green close in the European markets because of the slow-motion train-wreck that is Spain. The Euro-Stoxx is up 0.6% with the majority of European equity markets up around 1% but IBEX dropped over 2.3% further, Spanish banks plunged dramatically (thanks to Bankia's restatement throwing doubts over pretty much anything not bnailed down in their assets), Spanish sovereign bond spreads leakeds wider and Spanish sovereign CDS pushed to new record wides. Credit and equity markets gave a little back into the close but generally warbled in a narrow range - gapping up at the open.

What's maybe most worrying is that Italian bond spreads started to underperform Spain today - adding 10bps from their tights while Spain only added 4bps

Chart:Bloomberg

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Tue, 05/29/2012 - 11:49 | 2471908 Boilermaker
Boilermaker's picture

When is the break-neck reversal and ramrodding right back up to the highs?  Will it be directly at parity?  I'm taking over / under wagers.  Step right up.

Tue, 05/29/2012 - 11:50 | 2471917 CvlDobd
CvlDobd's picture

3:24

Wanna go to the strip club while we wait?

Tue, 05/29/2012 - 11:51 | 2471924 THX 1178
THX 1178's picture

"Plunging faster than facebook" HIYOOOO!!!!

Tue, 05/29/2012 - 11:53 | 2471935 Boilermaker
Boilermaker's picture

Was...now back to your regularly scheduled pump job.

Tue, 05/29/2012 - 12:13 | 2471998 Max Fischer
Max Fischer's picture

 

 

......correlated risk markets, gold, silver, oil, copper, and US equities had smashed lower.....

 

Ahhh.... the truth comes out!  Gold IS a risk asset.

http://www.kitco.com/charts/livegold.html

Yep.... sure is...

I thought everyone was suppose to flee to gold when fiat currencies collapse?  It seems every time there's financial chaos, gold goes DOWN, which is the EXACT OPPOSITE of everything the doomer goons believe.  

*LOL*

MF 

Tue, 05/29/2012 - 12:27 | 2472115 Joe Sixpack
Joe Sixpack's picture

I think people ran to it BEFORE it happened as insurance. When it happened they liquidated to pay off losses, but with the boost they had from gold's increase. This is a short term blip.

Tue, 05/29/2012 - 13:00 | 2472267 Thomas
Thomas's picture

More to the point, everything is a risk asset. No place to hide.

Tue, 05/29/2012 - 12:30 | 2472127 dbomb12
dbomb12's picture

Thats it, lets all follow the crowd and not pay attention to China and Russia loading up on gold to eventually back their currency. Lets all invest in the Almighty worthless dollar, treasuries and falling real estate that will give a HUGE ROI.

Tue, 05/29/2012 - 12:33 | 2472138 fuu
fuu's picture

All the way back to 1553!

Tue, 05/29/2012 - 12:38 | 2472160 Al Huxley
Al Huxley's picture

If the market chooses to discount insurance as a crisis unfolds, then I'll take that discount thanks.  Equivalent of having flood insurance being marked down in New Orleans as Hurricane Katrina rolled in off the Gulf. 

Tue, 05/29/2012 - 12:53 | 2472230 SWCroaker
SWCroaker's picture

You're an idiot, and ZH really, really needs an ignore button.

 

Here; let me play at being Maxie Fisher:

"My friends, let us postulate an investment, called miraculum.  I tell you three times, people, miraculum is a SAFE HAVEN.  Normally thought to be mythical, SAFE HAVENs have the property that they never drop in price! Particularly during times of uncertainty or distress.  It is TRUE!.  People can collectively store wealth in miraculum en masse, and when they pull wealth out, it has no effect on price!

Oh wait.  Oh my!  Bad times came and poor miraculum didn't act like a SAFE HAVEN after all!  I guess it is really just a POS pretending to be a SAFE HAVEN!  Aren't you all idiots for every buying miraculum!   *LOL*"

 

The technique is known as "straw man", Maxie.  The "safe haven" aspect is an easily deflatable claim to superiority that Gold never made, but in fact YOU adopted (I'm sure out of kindness) on Gold's behalf.  Using straw men to demonstrate your superior position is lame, childish, and likely only to have effect on weak minds.  (You're in good company; your idol P. Krugman does it all the time.)  Is that really the best you've got?

Facts: There is no miraculum.  SAFE HAVENs don't exist in the world of investments.  If they did everyone would own them.  And (physical) GOLD merely represents a counterparty risk-free option for wealth preservation; accepted as fungible wealth world-wide by people who matter when IT really counts; proven to get the job done handsomely throughout the ages; publicly hated by the con men that own and run the world; yet secretly coveted by almost all.  It is The odds-on favorite to be one of the few things still standing after our current Tower of BS eventually collapses under its own weight.

 

Please mature or mute.  (I'm dreaming).  Or...  continue to do your best to shoo people away from one of their best options during these time.  I suppose there's nothing like being a happy cog in the world's MOPE machine.

Tue, 05/29/2012 - 13:07 | 2472293 Max Fischer
Max Fischer's picture

 

 

That's quite a response for someone wanting an ignore button.  I thought libertarians were staunch protectors of freedom of speech and everything else the Constitution guarantees?  Oh, yes, I forgot... only when it serves their own self-interests.      

My point is simple: the central thesis of the doomer goons - gold is a safe haven - has repeatedly been proven to be FALSE.  This is central to doomer goon ideology.  This is NOT a strawman made up by me this morning. 

MF

 

 

Tue, 05/29/2012 - 13:15 | 2472360 SWCroaker
SWCroaker's picture

Free speech for all, yes.  Implied wisdom for all; hardly.  Freedom from repercussions for spouting idiocy, um, Maxie, you need to go over those libertarian tenents again.  We are *all* about failure when merited, and thus the freedom for all to fail spectacularly.

PS.  "Ignore" and "mute" allow ME to conveniently avoid YOUR drivel.  They do nothing to stop you from driveling.  It is Telling that someone who wants to clap his hands over his ears in your presence is somehow violating YOUR rights.

Tue, 05/29/2012 - 13:33 | 2472471 Fukushima Sam
Fukushima Sam's picture

Gold's time has not yet come.

Tue, 05/29/2012 - 13:43 | 2472515 Sophist Economicus
Sophist Economicus's picture

Max, Max, Max.   Tisk tisk.

 

The 'doomers' ALSO say that they are not interested in the paper gold (i.e, Comex future market, london future market) price of gold.   The doomers are PHYSICAL buyers and are holding gold because the paper gold price is a fraction reserve price which SIGNIFICANTLY understates the the rarity of gold.

Gold is a hobby horse of mine too.   I love accumulating on these price swings DOWN (please tell me you never buy your favorite asset as prices go up).   I believe that the paper price of gold and silver is vastly understating the rarity too.

 

I might be wrong, but since we haven't had a currency crisis yet, the jury is still out.   It seems like we're heading into one and lots of doomers wll be patient and continue to accumulate.    Seems like a winning strategy for the last 12 years.  

But, of course, your usual sniping doesn't address that wealth preservation philosophy.  

Tue, 05/29/2012 - 21:04 | 2473915 MeelionDollerBogus
MeelionDollerBogus's picture

WHEN was gold not a safe-haven? For 5000 years it has been true right up to this day. Please explain your nonsense

Tue, 05/29/2012 - 12:51 | 2472233 silverserfer
silverserfer's picture

Its astonishing that you have a handle that iplies intilect. Your posts repeatedly show you dont understand what the fuck is going on.

Its ok MF, its good that many people including you have no foresight. Cattle need to be calm and not stampeding before they are slaughtered. 

 

Tue, 05/29/2012 - 12:56 | 2472254 Max Fischer
Max Fischer's picture

 

 

iplies intilect?

*LOL*

Typical doomer goon. 

Buy silver, crash JPM!

MF

Tue, 05/29/2012 - 13:01 | 2472272 ThirdWorldDude
ThirdWorldDude's picture

Keep it up bitch, you might win the Nobel prize...

Tue, 05/29/2012 - 13:06 | 2472278 Mr. Lucky
Mr. Lucky's picture

Just blips on a 10 year graph Max.  Look 5 years back and think 5 years forward and beyond. 

Tue, 05/29/2012 - 14:14 | 2472684 Nobody For President
Nobody For President's picture

Gold is a store of value, which is a different concept than a risk-on, risk-off asset. 

It is also a commodity, and as such can have significant short-term swings in market value re fiat.

It can also serve as a portfolio insurance policy, with 3 to 5% gold and gold related stocks (mining) not being unreasonable.

If you chose to focus on short-term fluctuations, especially in today's HFT dominated market, and day-trade gold futures, you are just being another muppet.  

 

 

Tue, 05/29/2012 - 14:23 | 2472728 Quinvarius
Quinvarius's picture

Gold is not a risk asset.  It has no long term correlation to risk assets.  It simply moves up to counter government debt and money printing.  What you are trying paint as a risk correlation is something that happened in a paper hedging market where no gold actually changed hands.  The paper price has nothing to do with gold accumulation or value in the short term.  Everyone likes the paper price to rise.  But gold's true value = (national debt/gold ounces held by government).  That is where the paper gold will eventually go as well.

Tue, 05/29/2012 - 17:10 | 2473413 Meremortal
Meremortal's picture

You don't understand gold. But you aren't alone.

Tue, 05/29/2012 - 11:55 | 2471942 DeadFred
DeadFred's picture

Anyone know how to get on Egan's insider update mailing list? It would be nice to front run one of these announcements.

Tue, 05/29/2012 - 11:59 | 2471958 The Big Ching-aso
The Big Ching-aso's picture

 

 

It looks like the world is too broke to keep up with the Egan Joneses.

Tue, 05/29/2012 - 12:05 | 2471988 Oh regional Indian
Oh regional Indian's picture

I think the ratings agency of choice needs a new Moniker: Egad Jones.

ori

Tue, 05/29/2012 - 12:09 | 2471989 Xibalba
Xibalba's picture

booom!

Tue, 05/29/2012 - 12:25 | 2472107 Theta_Burn
Theta_Burn's picture

Last time Mr. Jones was first to blaze a similar trail the SEC (in the interest of the US tax-payer...I'm sure) he had G-men popping in/out of his sphincter

 His closest colleagues now call him "Vegan Jones"

Wed, 05/30/2012 - 00:27 | 2474198 StychoKiller
StychoKiller's picture

"Egad Jones and the Temple of Doom!"

Tue, 05/29/2012 - 13:42 | 2472517 eclectic syncretist
eclectic syncretist's picture

The rain in Spain washes facebook down the drain.

Tue, 05/29/2012 - 11:50 | 2471918 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

"When is the break-neck reversal and ramrodding right back up to the highs?"

 

Only for stocks and currencies.  Unbacked risk assets like gold?  Not so much.

Tue, 05/29/2012 - 12:03 | 2471962 The Big Ching-aso
The Big Ching-aso's picture

 

 

I'm waiting 4 the Fed 2 do a FB IPO.   I'm expecting it 2 open at $0.00 & with plenty of downside.

Tue, 05/29/2012 - 12:10 | 2472024 eclectic syncretist
eclectic syncretist's picture

I'm starting to feel good about some July XLF 15 puts I bought at 1.11 a couple of hours ago. 

 

 

Tue, 05/29/2012 - 11:48 | 2471909 drink or die
drink or die's picture

Going to need that Zerohedge IPO announcement soon to help prop up the markets.

Tue, 05/29/2012 - 11:48 | 2471912 Bastiat009
Bastiat009's picture

The euro/gold currency is crashing ...

Tue, 05/29/2012 - 12:03 | 2471980 fuu
fuu's picture

"and commodities reacted..."

Tue, 05/29/2012 - 12:06 | 2471991 The Big Ching-aso
The Big Ching-aso's picture

 

 

If I get shares based on the number of crappy posts I've made I'm gonna be rich.

Tue, 05/29/2012 - 11:49 | 2471914 ChelseaAggro
ChelseaAggro's picture

Another raid on gold.  Another chanceto stack coming up.

Sun, 07/01/2012 - 18:53 | 2579394 MeelionDollerBogus
MeelionDollerBogus's picture

Here's a list of such dips for ya - http://flic.kr/p/cgMBw3 - enjoy. Update 52-week ROC model not ready yet

Tue, 05/29/2012 - 11:49 | 2471915 Wakanda
Wakanda's picture

Wow, faster than Faceplant.

Tue, 05/29/2012 - 11:55 | 2471944 Mark123
Mark123's picture

Will fb break the $30 today?  I still keep waiting for a melt-up in this dog.

 

Where are the market makers??????????????

Tue, 05/29/2012 - 12:15 | 2472049 The Big Ching-aso
The Big Ching-aso's picture

 

 

It's times like these when we need RoboRetard to give us hope things are gonna get a lot better.

Tue, 05/29/2012 - 12:25 | 2472103 Arius
Arius's picture

providing liquidity ... who do you guess is selling????

daaa

Tue, 05/29/2012 - 14:20 | 2472716 Nobody For President
Nobody For President's picture

Will fb break the $30 today?  

 

Break in which direction?

It is 28.77 at the moment - 30+ handle at close today does not look too promising. The day's chart for it is more or less a single, steady decline - a 28.50 close would not be unreasonable to expect.

Tue, 05/29/2012 - 11:50 | 2471916 FieldingMellish
FieldingMellish's picture

USD and Treasuries are the "safe havens"... <snicker, snicker>

Tue, 05/29/2012 - 11:53 | 2471939 Dr. Engali
Dr. Engali's picture

Yes you better load up, there is plenty of upside from current levels.

Tue, 05/29/2012 - 12:03 | 2471979 scatterbrains
scatterbrains's picture

for realz! When the shit starts flying you'll be paying protection money to hold U.S. paper.

 

Tue, 05/29/2012 - 12:22 | 2472088 The Big Ching-aso
The Big Ching-aso's picture

 

 

If I were Egan Jones I'd invest in state of the art drone detection.

Tue, 05/29/2012 - 13:27 | 2472439 hardcleareye
hardcleareye's picture

I've been wonder about that......  any start up companies doing that yet?

Tue, 05/29/2012 - 11:51 | 2471919 Cognitive Dissonance
Cognitive Dissonance's picture

Damn. I already took one cold shower this morning.

Mrs. Cog wasn't exactly receptive. And now this. :>)

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