• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

European Equities And VIX End Week In World Of Their Own

Tyler Durden's picture


It's like Deja-Vu all over again. The last two days effluence exuberance in European stocks - most specifically Italian and Spanish broad indices - is extremely different from the lack-luster moves in corporate, financial, and sovereign credit markets. Yes, we know short-sale bans; we know fast-money; we know liquidity; but it is beginning to become a little farcical that equities are doing what they do with no follow-through from the actual underlying markets that 'should' benefit the most from whatever it is that the equity markets are rallying for. EURUSD ends the week perfectly unchanged from last Friday. Spain and Italy 10Y end the week down 60bps and 25bps respectively (but the gains were fading fast today - even as stocks accelerated). Europe's VIX collapsed 1.7 vols to around 21% today after being steady all week (as US VIX drops below 14%).

European Stocks vs European financial and corporate credit...


European sovereign credit rally losing steam...


as EURUSD ends unchanged...


and Europe's VIX decouples once again from risk-reality...

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 08/17/2012 - 12:39 | 2714459 slaughterer
slaughterer's picture

Wall Street does not like Obama.  If Wall Street wants Romney to defeat Obama, Wall Street has to crash the market.  Bonus: Wall Street also gets QE3 after the crash.  

Fri, 08/17/2012 - 14:44 | 2714887 HarryM
HarryM's picture

So the market will crash and VIX will stay at 13

Mon, 09/17/2012 - 10:21 | 2803192 common_sense
common_sense's picture

Noooooooooooo, VIX will go down at 5... but after Obama wins, because a QE4 & QE5 shall be needed again of course.


Romney is a poor very RICH man, is running in the sky, he doen't understand QE's, so impossible he wins election: http://www.telegraph.co.uk/finance/economics/9544261/Mitt-Romney-People-earning-250000-are-middle-income.html

Fri, 08/17/2012 - 12:40 | 2714469 DCFusor
DCFusor's picture

+1 Cool!

Fri, 08/17/2012 - 13:32 | 2714697 yrad
yrad's picture

"and Europe's VIX decouples once again from risk-reality..."


Somebody in the "know" explain the importance of this for me? I'm no investor but I am learning as I go.

Fri, 08/17/2012 - 12:03 | 2714301 ebworthen
ebworthen's picture

"Equities are the Economy"

"Debt is Savings"

"Credit is Cash"

"War is Peace"

"etc., etc."

Fri, 08/17/2012 - 12:06 | 2714310 Abraxas
Abraxas's picture

masturbation is sex

Fri, 08/17/2012 - 12:16 | 2714345 Crispy
Crispy's picture

Honey, is that you?

Fri, 08/17/2012 - 12:18 | 2714360 Abraxas
Abraxas's picture

Ha! Good one, Crispy!

Fri, 08/17/2012 - 12:05 | 2714307 fonzannoon
fonzannoon's picture

Jackson Hole schedule just released

8am - continental breakfast

9am - post breakfast hookers and blow

10am - shock Liesmans balls repeatedly until he remembers every word on the pad

11am - shock liesmans balls just for fun

12pm - serious interview with liesman

1pm - recite last 4 months previous announcements

2pm - read verbatum last 4 months previous announcements

3pm - look busy

4pm pre dinner hookers and blow.

Fri, 08/17/2012 - 12:09 | 2714324 Bay of Pigs
Bay of Pigs's picture

So, what do they do at night? Animal sacrifices and drink blood?


Fri, 08/17/2012 - 12:11 | 2714331 fonzannoon
fonzannoon's picture

I figured someone else can take that torch.

Fri, 08/17/2012 - 12:11 | 2714332 Abraxas
Abraxas's picture

It's not the animals they sacrifice. It's our money that is offered to Mammon.

Fri, 08/17/2012 - 12:25 | 2714392 DeadFred
DeadFred's picture

The sacrifices and blood thing wasn't supposed to be public knowledge. Where did you find out about it?

Fri, 08/17/2012 - 12:38 | 2714452 tradingdaze
tradingdaze's picture

They consult their Astrologers in the evening.

Fri, 08/17/2012 - 12:38 | 2714456 disabledvet
disabledvet's picture

And then "roll the bones." and to think people here compare the market to the WHOLLY rational gambling houses of Vegas.

Fri, 08/17/2012 - 12:50 | 2714526 Squid Vicious
Squid Vicious's picture

lol @ serious interview with lies-man...

Fri, 08/17/2012 - 13:31 | 2714688 diogeneslaertius
diogeneslaertius's picture

sure wish i could get me some of them hookers and blow



Fri, 08/17/2012 - 12:06 | 2714312 BLOTTO
BLOTTO's picture

It's like Deja-Vu all over again.




Because their is Nothing New,

Under the Sun.

History is merely repeating itself...

Fri, 08/17/2012 - 12:11 | 2714327 slaughterer
slaughterer's picture

How is Bidermann doing with his 100% short call?  Want another saucy video from Sausalito with the power pole finaly revealed behind his head. 

It seems like most every well-known market caller has gone short, but the market keeps on pumping upward: Kass, Faber, Bidermann, etc. all bleeding from their ripped off faces.  

Fri, 08/17/2012 - 12:12 | 2714335 fonzannoon
fonzannoon's picture

Yup it seems the logical voices of Jim Paulson and Larry Fink have prevailed.

Fri, 08/17/2012 - 12:11 | 2714330 XRAYD
XRAYD's picture

Just like Black Jack has nothing to do with what's going on at the roulette wheel - except that they are all in the Casino.

And I have observed that the crowd always seems to be where the hot chics are - at the craps table!

Fri, 08/17/2012 - 12:17 | 2714355 slaughterer
slaughterer's picture

Have you ever taken a look behind the Baccarat table at Monte Carlo?

Fri, 08/17/2012 - 12:13 | 2714340 ekm
ekm's picture

This is FORCED BUYING in the same sense that Lehman was forced to buy MBSs, MFG was forced to buy Italian Bonds or JPM's Whale was forced to buy credit tranches.

Two options:

- Keep buying until they run out of money or get a margin call (Lehman, MFG)

- Keep buying until the market runs out of stocks (end of 2007 early 2008)


Both cases, we will have one or two primary dealers going elephant excrement otherwise slowly we're going  towards ZERO volume.

There is absolutely no other solution.

Fri, 08/17/2012 - 13:30 | 2714685 diogeneslaertius
diogeneslaertius's picture

Economic Foie gras

Fri, 08/17/2012 - 18:11 | 2715560 ekm
ekm's picture


Outstanding imagination.

Fri, 08/17/2012 - 12:15 | 2714343 GoldbugVariation
GoldbugVariation's picture

Spanish equities up 6%, Italy 4% in the past 2 days alone.  It's looking toppy though, losing momentum.  Possibly one more up-leg (to IBEX 7700, MIB 15350) before the real sell off begins, possibly the tops are already in, but I'd be extremely nervous about opening new longs anywhere near these elevated levels.

Fri, 08/17/2012 - 12:16 | 2714347 NEOSERF
NEOSERF's picture

Make no mistake about it...the German "plan" is to continue to stall for time in a strategic financial retreat.  They will give Greece a year instead of two and call it a victory but fritter away the time they are given.  They will acquiesce to the ESM and call it "unity", they will pay for Spanish banks because the money comes right back to their own banks...there is no fixed result but this game can go on for another year or two.  Of the "big" problems this fall, the ESM will be ratified and cause a 500 pt move up as Spain and Italy yields decline to 6 and 5% respectively...Congress will push the fiscal cliff for one more year and that will cause a 300 pt move.  No QE and slower corporate results in aggregate but the market will find the 1 in 10 good corp result and that will be the headline...clearly, the thought that markets decline anymore has slowly been abolished by the Fed and ECB...well done..until one day this rubber band is so taught, not even a $2T "announcement" will turn it around.

Fri, 08/17/2012 - 12:17 | 2714353 Yen Cross
Yen Cross's picture

 I picked this article up last night. Thought the forum might enjoy it, since we are talking about the all the EUROPIUM, via the rigged equity markets! This discusses bond seniority,and the ECB. http://ftalphaville.ft.com/blog/2012/08/16/1122301/spreads-and-that-damn...

Fri, 08/17/2012 - 12:33 | 2714388 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

In the long run, markets will be volatile. But by then, we're all ... ?

IF the machines are the only ones trading AND the machines are lognormally biased, THEN they can only skew to the right.

We may also be repeating an analog of the last several "support" programs from the CBs. Volatile ranges narrow into machine perfect lifts following "ghost" trendlines. After all, it's simple math and machines do not trade for fun or fundamentals.

Fri, 08/17/2012 - 16:23 | 2715241 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Et voila, higher lows, higher highs, all day long, perfect channel.


Fri, 08/17/2012 - 12:29 | 2714394 falak pema
falak pema's picture

hahahaaaha looney tunes time.

In the USA you have the John Galt mania. "Don't touch John Galt, he's all thats left to us", is what they sing.

Last action hero of the pristine Wall Street age. When a banker was straight and not bent like a boomerang; and when being gay didn't mean being whatever but meant you sang in the rain! 

In Europe, being more laid back thanks to three thousand years of history and several cataclysmic ups and down, the people have another hero : Don Quichotte. 

Much more palatable as he is so delusional he could be investing in stocks today hoping to win back his Dulciney with loads of stock market fiat. 

Caramba! the stock market is up from 10% to 20% all over on 2O12, except Espagna.

Hola, muchachos it is time for Spanish take off! 

We have Draghi the man that won us the "fiat unlimited war" against the evil speculators.

Olé! Arriba Espagna! 

Lovely month of August! 

Fri, 08/17/2012 - 12:41 | 2714475 disabledvet
disabledvet's picture

Two days of Affluence is more like. Could lead to a weekend of effluence of course. Perhaps effervescence tho?

Fri, 08/17/2012 - 12:48 | 2714512 dcb
dcb's picture

I do nopt like the market action this past week, it comp[letely changedd in regards to the prior pattern and feel very forced to me

Fri, 08/17/2012 - 13:16 | 2714619 Archetype
Archetype's picture

July: Olympic rally, bullish.

August: Jackson Hole Symposium, More QE = Bullish, No more QE = Bullish (yippi the economi is fixed) Buy into it and buy even moore afterwards.

September: German vote on greek bailout - The greeks will get the pile of money to throw in the big black pit. Bullish, buy into and buy more when this problem is out of the way.

October: Nothing special this month so just BTFD, especially on bad ISM and ADP numbers.

November: Elections = Bullish, nobody knows why but thats not important. Doesnt matter who wins. Buy before and buy afterwards.

December: Retarded zero volume santa ramp, bullish buy the whole month.

Januari 2013: 13 is traditionally the unlucky number so because of that the markets are going contrarian. Bullish buy everything all year.

Go to the squid, throw in your house, car, wife and kids as collateral to lever up nicely and just BTFD!

Fri, 08/17/2012 - 13:30 | 2714679 diogeneslaertius
diogeneslaertius's picture



Fri, 08/17/2012 - 16:31 | 2715276 q99x2
q99x2's picture

Quit your jobs. Cash out your 401K. Buy prepper property (in Costa Rica.)

Do NOT follow this link or you will be banned from the site!