Euphoria Shifts From Stocks To Commodities
Silver and Gold remain the major outperformers year-to-date but the rest of commodities - most notably oil is catching up very fast having over taken stocks this week. It appears that the new-found flood of liquidity that we have been so passionately banging the table on for weeks, has found its way into the energy complex as European Sovereigns, European Financials, European Stocks, and US Stocks have all flattened or turned down as Crude and WTI surge. And as a hint to anyone who hasn't jumped on this tidal movement yet, one thing to note is that unlike stocks, commodities always have the risk of marginal or weak hands being shaken out via CME...margin hikes.
Year to date performance shows Crude is now outperforming US equities and closing in on Gold's great run. Silver remains the double-levered liquidity trade-d'annee.
But how has the flood of liquidity dooshed sloshed around the world of global assets...
(Click chart for larger version)
It appears there have been five periods to this post LTRO love-fest with nominal values of assets.
1) Post the LTRO and through January (black dotted rectangle), markets generally tracked each other higher in a narrow liquidity and euphoria-driven range with US Stocks having a higher beta than most assets in general (as everything was floated up with the best performers being the worst performers of last year); this bullet-proof rally had just begun to fade as everyone waited for something real to confirm what was before their eyes...
2) As January ended and February began, the most wondrously 'adjusted' NFP print in the US re-engaged the liquidity pump and those most beaten down of last year's assets were grabbed with a vengeance once again as European Stocks, US Stocks, European Sovereigns & Financials, and Brent Crude all levitating rapidly while WTI Crude fell (as the spread rose on Middle-East tensions). European stocks were the major winner in this period as financials flew on the LTRO solution and so the liquidity sloshed into that bucket more broadly.
3) The impressive short-squeezing dash-for-trash 'its real coz the BLS says it is' rally continued until a week into February when European concerns reared their ugly heads with badly weaker macro data in Europe (plus a re-emergence of Greek contagion concerns as Portugal blew) dragging European credit (Sovereign and Financials) considerably weaker and European stocks sideways to modestly down. Maybe the LTRO expectations had finally run out of juice. Liquidity sloshed back into US equities (don't worry we're decoupling) and WTI Crude (decoupling and Iran) - hoorah...
4) This lasted til last week when credit markets really took a turn for the worse and stocks began to follow but the flood of liquidity was not to be stopped and together with some entirely confusing constantly contradictory newsflow from European leaders that all was well in Greece and that China would not suffer a hard landing every risk asset rose in value - spurred on by yet another liquidity flood from a surprise RRR cut by China (which seemed to shake the last weak shorts out as we have drifted since). However, it seems that the need for China to do this (concern that it must be bad for them to do this) along with concerns over the next LTRO and the growing stigma the market is pricing into European banks who used it seemed to slow the liquidity surge into broad equity and credit risk assets and...
5) The energy complex was saturated with liquidity pressures. As Iran tensions rose, the surge in Brent and WTI (and Tapis) crude prices reflects not just the sabre-rattling and supply concerns (which havent changed dramatically in a day or two) but much more simply the only thing that matters - central bank largesse. The last week has seen US and European equity and credit markets slide lower - with Europe underperforming the US (decoupling hopes again and the fact that the US is a hot and open market that will always enable that liquidity to flow more easily).
Meanwhile Gold and Silver have cruised comfortably higher on the growing realization that slowly but surely investors need real value protection not nominal wealth - no matter which liquidity bucket the printing press is spewing into.
The problem now - as John Burbank of Passport Capital so well described is, the oil complex won't stop until the economy's back is broken as there is nowhere for the liquidity to flow given the negative feedback loops all the central banks in the world have created.
With LTRO 2 already priced in, and the Fed having been handed the baton of printing by the rest of the world's central banks this weekend at the G20 meetings, we suspect the liquidity will remain pumping in Oil until the CME steps on its throat or someone disappoints a perilously over-the-top market for stocks (and slightly less so credit now as it has started to awaken from its risk slumber) with a PSI deal fail, disappointing LTRO, new record Oil, or our favorite the unknown unknown consequence.
Charts: Bloomberg
(9 votes)
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Euphoria is a good thing in small doses.
cocaine is a helluva drug
Only if it hasn't been "stepped on" too hard...........I'm just sayin'
.......You know......like Greece's balls?
Fuck Bernanke. I am at the Easy Tiger wearing overalls. Drinks are on me for the next two hours.
Can I make it there in a cab from Reno? I've already had a couple of beers dammit!
Uncle Warren says to try NetJets.
Enjoy Austin's finest beer, sausage, pretzels, and cheese. All free if you can get here in an hour.
mmm, sounds like a great place, though I think I will tip one from here, maybe next time :)
Tell Uncle Warren to stop running his Gayco commercials!
-John
http://www.youtube.com/johnu78
Austin's only got the worst traffic in Texas. You can't get *any*where in an hour. "Call a place a paradise, kiss it goodbye."
herd mentality ... but the view never changes if you're in the back of the herd
The drug trade has been a real money maker ever since the British Empire saw how profitable the black market opium trade was. The money from the Golden Triangle, the Mexican drug lords, etc. where do you think they went to 'make that money clean'? Certainly not Wall Street! /sarcasm
Check out the latest from the Capital Research Institute, "Time to Break Up the Media Monopoly"
http://www.capitalresearchinstitute.org
"As everyone knows by now, the US election cycle is in full swing. Concerned about the economy? The welfare of the nation? What kind of country your grandkids will grow up in? If you listen to the mainstream media (msm) then you 'know' the answer is to choose a political party, stick with them, and everything will work out fine... The problem is, this couldn't be further from the truth. The political parties no longer serve the people..."
http://img.scoop.co.nz/stories/images/0202/feb12fab54a8589b4b0e.jpeg
NYSE's Richard Grasso meeting with a commander from the FARC in Colombia. Just in case ya'll forgot.
Romney/Paul could run as an independent. Peanut Butter and Jelly--money/organization meets actual sanity.
Kill yourself.
How about Paul/Romney .... just say'in ...
How about Kennedy/Johnso....
Oops.
"Drug trade has been a real moneymaker since the Brit Empire..."
Now THAT is a very interesting notion. Especially here in the US, *especially* when one starts looking at timelines. 45 seconds of web search yields this:
1907 - Panic of '07. Morgan (essentially) essentially bails out the country's banking system, thus "saving" the country and maybe more imprtantly, Teddy Roosevelt's rep. How might a grateful nation - or its banking/political class - repay Pierpont for his wonderfulness? And maybe throw in a little sumthin' sumthin' for themselves?
1913 - Federal Reserve System created: bankers happy
1913 - 16th and 17th amendments allegedly ratified. Income tax & direct election of Senators: politicians happy.
1914 - Harrison Act passed. Opium made illegal. Street price of opium rises.
1919 - Supreme Court ok's expanded Harrison Act: and we're off to the races.
1924 - Heroin made illegal.
1932 - United States Narcotic Act. Maryjane now illegal. **Big** bucks can now be made in The Drug Trade, as in days of yore.
etc etc etc. When viewed this way, it couldn't be clearer.
US Stocks have flattened or turned down. Gee, I must have missed that. My portfolio and the Dow is doing fine.
"liquidity has douche'd around the world.." LOL!
Hope & Change with The Bernank and hopey Islamic douches.
Barry Soetoro is as much a Muslim as Urban II was a Christian.
Freddy's on another Friday night gas-huffing binge.
Hat Tip to Ann Barnhardt
BarnhardtPatrickHenrySpeech.mp4
http://www.youtube.com/watch?v=Cup9CgSjr9g (8:03)
who...
Hat Tips... to BrutallyHonest.org
who...
Hat Tips... to Taylor Mali
who... did this...
Killing the Speech - "Modern" Kids losing Language and Confidence? - Observed/Poem by Taylor Mali
http://www.youtube.com/watch?feature=player_embedded&v=hnjJvzprjN0 (2:46)
~//~
Grateful Dead Touch Of Grey Video (Band In Bones)
http://www.youtube.com/watch?v=pmT6udys8Tc (4:43)
Grateful Dead - Touch of Grey
http://www.youtube.com/watch?v=wOaXTg3nAuY (5:49)
Long Cool Woman in a Black Dress - The Hollies
http://www.youtube.com/watch?v=lP94PlEtsEQ (3:15)
You should have stacked, Bitchez!
You still can stack. Buy a little each payday, befriend your local coin momger!!
Just don't stack fiat, you just never know who printed that $50 or $100 dollah bill. First fake bonds, now fake fiatscos.
Phyzz in the hand is the only real money.
http://finance.yahoo.com/news/u-could-pressure-north-korea-tomorrow-quit-100-094000585.html
Seems Blythe and The Morgue weren't too happy about the euphoria in silver.
The cartel dropped 102.5 MILLION paper ounces of silver on the market in only 7 minutes this afternoon...only to see silver perform an OUTSIDE REVERSAL!!
Check out the netdania 1 minute volume/ price chart:
http://silverdoctors.blogspot.com/2012/02/cartel-dumps-1025-million-ounces-of.html
Blythe just had an MI.... LOL
-Doc
Thanks, Doc. That's sweet
Man, that is fantastic! ROFL!! Great news to end a Friday with.
Hope they've got them spankin' new toilets, 'cuz someone's shittin' bricks!
A friend who has traded silver in her own account off and on for years, checked her data and saw the price movement but NOT the volume. Could that be bad data from Netdania? She was using Esignal and saw the max 1 minute volume at the spike low at 105.
[after sending a closeup of the chart to my friend, she saw it was spot -- her data was futures. It is still such an extraordinary event that some confirmation would be good. There have been erroneous data feed and charts. But if that data is good . . . WOW!]
i've always found it hilarious that people would think you could break a bank with gold. Silver on the other hand...
Normally something like that will break silver back down below 30.
Now suppose they print imaginary shares over the weekend and dump 100 million paper ounces into the silver pit?
I have always said paper burn paper.... but now see Blythe for the truly enemy of Metals followed by a thought of how many imaginary ounces are ON the market?
This is going to be very interesting.
Blythe is stuck.
If they do this again, it goes either way. From my point of view I am in the money.... excepting that stupid lakeside trip we had just got back from... or I can back the truck and stack some more.
I am drifting off to sleep dreaming of $1000 per ounce or 1000 ounces of (Am a very long way from that goal...) silver. And I think that may happen someday. Why should Silver be the runt while all the others are trading in 4 figures?
There's fake paper, and then there's fake fake paper.
http://finance.yahoo.com/news/u-could-pressure-north-korea-tomorrow-quit-100-094000585.html
What's her prognosis, Doc?
Someone BTFDs?
Stalking The Bear: Trouble In Transports
http://seekingalpha.com/article/391391-stalking-the-bear-trouble-in-transports
Strong Oil prices may be the culprit
Nah. Someone shot the Transport Unicorn.
Either that, or someone got a glimpse at some real numbers, for once....
Crude is technically overbought, the dollar is oversold, the Iran story is overhyped, the US is considering to release some oil out of the national reserves, and Saudi Arabia is increasing supply, everybody is screaming about high gas prices. Prepare for a pullback before this rally continues. I think the same applies to PMs.
I'll bet you a chocolate chip cookie you are wrong about a pullba........er.....uh.......is a fraction of a percent a pullback?
If so, forget it. It's going higher.
I've been long since last october and I don't disagree that it will eventually go higher, but it's severely overbought in the short term and it won't go further without a significant pullback imho... target $ 100 for WTI, $115-110 for Brent
I have made more money shorting oil, first at 147 back in the day, and lately shorting at 1001-102.
Thankfully I didn't hold for more than a few hours, and figgered 50/50 it was going to go higher ' just because', and not for any apparent reasonable reasons.
$101 might be another shorting possibility, and not a 'going long'.
Not gonna fight the tape though.
I read the whole thing and here is what I think:
At 78.36 I think the dollar is about 6% higher than this time last year with infinite more printing occuring
At 35.51 we are still 14 dollars lower than this time last year with infinitely more instability in currencys worldwide
At...well, housing we just saw that
At...well, we just saw the price of oil
At...well, at least I can still afford to play my Harmonica...
Last year arround the risk of real supply disruptions from Libya was significantly higher than this time arround from Iran. Economic activity was higher (take for instance US energy consumtion, BDI, even the cooked GDP numbers).
The DXY has become basicly irrelevant imho, because everyone is inflating like there's no tomorrow. As the DXY is heavily EUR weighted, it's basicly a comparison between trash ($) and garbage (€). The only use I have for the DXY is to put it into relation to commodity prices and to figure out which fiat currency is currently overbought/oversold. The DXY beeing 6% higher this year arround than last year actually means that oil/gold etc. will go higher once the $ weakens further (in € terms Brent is at all time highs...). But in the short term the DXY is oversold, so I expect commodities to fall somewhat in $ terms. Additionally, WTI and Brent quite significantly are overbought. Gold, silver are close to beeing overbought.
Everyone is inflating like there is no tomorrow? Ex-fucking-actly!
Synchronized diving, bitchezzz!!!!!
Why not, everybody is in the fiat printing game.
http://finance.yahoo.com/news/u-could-pressure-north-korea-tomorrow-quit-100-094000585.html
Purlease! This ain't about technicals anymore. Only three things really determine oil's price now: central bank liquidity, CME margin hikes and GDP growth (or lack of). The other factors are just noise...
But there will be some crazy volatility along the way as oil (WTI in particular) goes to $150 and beyond...
Iran news have driven the price during the last months. ZH has documented this very well.
I did this too, over here (I actually started covering it even before ZH did): http://www.ronpaulforums.com/showthread.php?322176-Oil-and-gold-prices-set-to-soar-on-the-developing-IRAN-story&p=3639233
I see it a bit differently.
I agree with 1). central bank liquidity and 2). CME margin hikes.
Not so much GDP ... unless there are HUGE unexpected swings that they can't figure out how to hide or lie about (in the short term at least)
But I would add
3). Iran and general middle east unrest & sabor rattling
4). Strategic Oil Reserve releases (or even just the 'discussion' of releases)
it's a (sort of) free country!
don't let us keep you from taking your own advice. that is, if you really are.
ignore the price of oil entirely and go long the natural gas technology play. the "Big Oil/Big Mind-martian" play is getting killed. The only people who have are "fereiners"--and we need to start playing nice now. of course "when we're killing everyone" that's not easy. maybe we can start with Vets here at home!
There ya go!
"ignore the price of oil entirely and go long the natural gas technology play."
I'm going long pond scum!!!
"Feb. 23 (Bloomberg) -- The Energy Department plans to invest $14 million to make transportation fuels out of algae, according to the White House.
“We could replace up to 17 percent of the oil we import for transportation with this fuel that we can grow right here in the United States,” President Barack Obama said today in Miami during a speech on energy policy."
http://www.businessweek.com/news/2012-02-23/u-s-to-invest-14-million-for-algae-biofuels-white-house-says.html
When unicorn farts just won't do anymore ;-)
Heh. Yep, I saw that one today. And I remember back when he said if we keep our tires inflated we wouldn't even need to drill for oil.
http://www.youtube.com/watch?v=akjXqfvLu28
That guy is just full of solutions. What's next, burning dead people to heat my swimming pool? Oh, wait...
http://www.newsvine.com/_news/2012/02/24/10494749-an-insult-dead-bodies-to-heat-uk-swimming-pool
I'm recommending that every one fill their car tires with helium and wear a propellor hat...
Also, tesla coils on that magical 38th parallel for free energy from the (n+3)!/n! dimension...
Sorry, helicopter Benny had cornered the market on those hats.
http://www.mrbreakfast.com/cereal_ucp_slideshow.asp?id=300&picid=1418
Well our pinky extended elite class has always told us we should be just like europe...just give over to the darkside and think of the energy savings for the whole, maybe if they could be coaxed into leading by example ;-)
Speaking of elites, I see Michelle Antoinette just completed her sixteenth vacation in three years.
http://www.ibtimes.com/articles/301597/20120220/michelle-obama-s-skiing-vacation-aspen-photos.htm
That's nice. It has to be exhausting work, scheduling all those vacations.
Correct. This is why she referred to being the first lady as "hell". All those vacations, exotic white house parties, expensive messages, top shelf everything, his n hers air force one jets, arugula, and so on. It's not that she's greedy, she's just doin her best to pass the time in hell.
She's doin a helluva job ;-)
Ain't no wife of mine will do all that.
UGH...
It's an incredible snub of the public trust.
On the one hand, we have to all do our part...all pull together, everyone scrimp & save & sacrifice...blah blah blah. On the other...off to the coast of Spain, the coast of Hawaii, Martha's Vineyard, Copenhagen, ski resorts.
Hell within the first month they were flying to New York for a damned dinner!!!...and then turn on a dime and speak to the plebes about corporate jets & manmade global warming...lol.
It's absolutely surreal.
"When unicorn farts just won't do anymore ;-)"
Cheap, warm Modelo out my nose. You made my day. Thanks. LOL!
I haven't even got into golden eagle feather plucking machines they call wind mills yet. They raised the allowable death count ratio on eagles to accomodate this new "green" policy.
Only from the minds of bureaucrats.
It's the eagles' fault, the windmills have the right-of-way! :>D
also they fired don felder
They always go after Eagles swinging "axes"...after all, they're defending the tree's.
He's also a Cracker from Florida, a bonus ;-)
banks using CB money like crack addicts...
Yada, yada, yada, all those words, bullets, lists of 1 to 5, etc, ad nauseum when all you have had to do with any asset class for 3 years was just follow the fucking tape!
Baa-Baa-Baaaa
This is why they call people like you, 'sheeple'.
Prove me wrong, I dare ya.
The Real Hunt Brothers Story
Posted on February 24, 2012 by maxkeiser
.
http://maxkeiser.com/2012/02/24/the-real-hunt-brothers-story/#comment-44...
.
http://www.informationclearinghouse.info/article30620.htm#idc-cover
Let Your Life Be a Friction to Stop the Machine
This Is A Must Watch Video
A brief and crucial history of the United States
.
THE PURE AND SIMPLE TRUTH PT 3 (who are we and why are we here?) to Thrive
http://www.youtube.com/watch?v=4WHUdK3dBEo&feature=player_embedded
I stopped watching that propaganda video ("let your life be a friction...") when he said this:
"There is no provision for social good in capitalist theory"
oh well, world wars I and II and perhaps III will
be told as social good stories, notice the term
"told". they will not be lived as told, never are.
in capitalist theory you finance both warring parties
until such time a clear victor is identified and then
you demand reparations be paid by the loser. this
is the height of social good in theory. i say reflect
on the difference of quantitative and qualitative
concerns, there be the ultimate resolution.
What a load of crap.
says who?
in the end we all get exactly what we
deserve; either that or much less,
praise be to no-thing.
I think you have a great arguement Tyler. One thing is for sure, in my book though. The Australian dollar ( risk/commodity), isn't reflecting that in the currency markets. The covering via eur/aud and the anemic aud/usd trade this week, lead me to some risk aversion in the short/medium term. T-10's are under 2%, and you also mentioned that (7yr) auction this week.
The eur/usd short covering, and LTRO hopium drove that trade today. The crosses via (eur/jpy- aud/jpy), drove the trade as well.
I'll take the the Aussie side of the cross, vs the Yen next week. When the market softens the (aud will fall even harder than the euro), as there is more gap(risk), to fill bottom side.
Interesting Yen Cross....I am short the AUD and EUR vs the USD....and short the Yen too.....methinks something's on the horizon here......like....a cliff.
Some falks are selling crude oil call options here. June 200 strike for example. Read it from Spada Capital website. Does it make sense?
Ingmar (oops, I mean JennaChick) continued spamming thusly:
Do you mean Spada Capital, the Estonian spam factory associated with Armada Markets, the imitation lutefisk factory? Examine the following. Does it make sense?
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Check it out now at armadamarkets.con !!!1!
Ask for Ingmar, the guy with dog breath that smells like seven-day-old Estonian Carp.
Examine portions of the results of whois queries for armadamarkets.com and spadacapital.com below. Does it make sense?
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expiration_date: 0000-00-00 00:00:00
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Domain name: spadacapital.com
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Ingmar Mattus ()
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This spam smells like ljutefjisk, Ingmar.
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Well, I guess I'm glad it's not Ingsoc, at least....
A small shakeout from margin hikes will be the last chance to catch this train.
This appears to be a primary impulse wave wirh perfect macro economic tail winds to give commodities a boost.
Dont miss out!
its an election year. they will throw everything they have at this to try and slow it down. expect multiple margin hikes, strategic oil reserve releases, lots of threatening language about marching those evil speculators into a congressional hearing ....
they will do whatever they have to in orde to slow it down ... but to your point, they ain't gonna stop it ...
Why would I want to buy something real when I can own a little piece of paper that says I own a little piece of a business? Well, ok, I don't really own it in the sense that stockholders are the last in line in the capital structure. So what I really own is a concept. Well, those concepts are actually patented and I don't own the patents. So I guess what I'm saying is I own a piece of enthusiasm: it goes up on optimism, and down on pessimism. A feeling. Backed by a paper receipt for such. Well, now that stock certificates are history, you could say that I own a virtual receipt for a piece of enthusiasm.
Yes, but you can fit lots of those pieces of paper in your safe. The shelves in my basement are full of food and ammo, and my attic is full of toilet paper. What was I thinking? Paper would have been sooo much easier...
1.23 a roll for 15 rolls of paper towels on sale over the weekend. One side of the room is turning into paper central with Toilet and Paper Paper...
Coffee is next. I am planning a 24 can buy at 10.00 per next week.
Geesh, so Nancy was right afterall?? It is those evil speculators.
Have faith in market fundamentalism, my friend, and always listen to your Uncle Warren. It's that kind of clean living that leads to success.
explain the spread between natural gas and oil. in under one sentence. preferably one word...like..."corruption" for example.
Inflexible paradigms.
Wait...shouldn't the administration be sending the SEC after these "evil oil speculators" or sumpin?
I vote for Wonder Woman Pelosi to lead the charge!!!
Paging Banzai on the Nana photo shop ;-)