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EURUSD Plunges To 22 Month Lows
UPDATE: EURUSD at 1.2578 - back to July 2010 levels
EURUSD just broke back below 1.2600 (1.2597 lows) which takes it back to August 2010 lows and well on its way to the 1.20 levels that the current Fed and ECB balance sheets would imply - as we pointed out just two weeks ago. EURUSD remains notably below the swap-spread implied valuation (though even this is tumbling) as once again liquidity and credit risks get priced into the cross.
EURUSD at August 2010 lows...
EURUSD target of 1.20 based on ECB/Fed baalnce sheet size...
and the liquidity discount is coming back fast...
EURJPY is also back under 100.
Chart: Bloomberg
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And precious metals are getting crushed.
A good chart to look at is a floating gld/silver/eurusd. They move together, for now.
cue ECB intervention in 3....2....1...
Record short interest means it can explode back up.. I'd be careful.. Hoping to see 1.2 by the end of June.. could see it dip below that..
"And precious metals are getting crushed."
So much for the floors at $1675 and $28. Cant wait to hear what BrotherJohn has to say about this.
I expected this.. I wasn't buying the $28 floor.. More like 22.. IMO.. I'm a holder though.. and think I will have a chance to sell at 65 before year end..
Its 2008 all over again
phase I of Crash can get started as early as tomorrow morning with the NASDAQ QQQ, leading the way, severely impacting XLK and SMH. Above and beyond the selling wave we have experienced in the last 18 hours, specifically when QQQ trades below $60.33 for 8 or more minutes, anytime before May 29th, then the sell-off will imminently escalate several fold to the downside. If it takes out this level prior to the period, markets can still head south, but a very brief dead cat intra-day bounce is possible before market increases its acceleration downward upon crossing the critical point. It is not a matter of crossing the point for us to have high confidence in the market meltdown. It is just a nearby place in time and price that would make for some even more interesting and unusual downside market activity.
http://www.youtube.com/watch?v=tFf5vTm2_LQ
Nah, 2008 was a gang rape. It's 2012. Now it's our turn to watch.. Poor bastards...
It's going to be worse than 2008. Every downturn during a depression is always worse than the previous downturn.
I'll take the sale price on the physical metals.
Yup.
With silver, I'm buying down every 2 bucks, starting at 26. And my order quantities will increase markedly if we break below 22.
I LOVE clearance sales!!
Im still 3 or 4 weeks from moving my 401k. I hope the trend continues...I fear we may pop.
Gold has followed the euro for a decade .. why would that change now?
I agree, but in reality (not market perception), if the euro turns into kindling, gold will still be there owing to it's zero btu value.
Gold has followed Euro? You've been looking at the wrong end of the horse.
2003 Gold in Eurinations 325
2012 Gold in Eurinations 1225
Most everything is Dr...
Fear......
Unless you're on the short side today....best to stand aside and watch the carnage....I am flat....excpet for a teeny GBP/JPY long, that is getting hammered.....
I may go long.....once this plunge dissapates, but catching the dagger without getting bloody is a fools game.
Lots of EURUSD support at 0.00.
Currency war bitchez ...
Can it be considered a war when they work together? I think its called "collusion" and the goal is to steal wealth from the proles.
Dr. copper is back to the January lows,
Prognosis: Tenuous, possible terminal.
Treatment opptions: I.H.E. (Initiate Hostilities Expeditiously)
Everything is getting crushed, but amazingly enough my gold and silver is still there, still has the same mass and still buys the same amount of oil, gee imagine that.
Besides, with a dollar-cost average of under $350 and $9 on my gold and silver, wake me up when it gets there. Here is a hint for you, it won't. PM's are not investments, they are security and life preservers of purchasing power. Wake the fuck up.
Measuring dog shit against horse shit.
I won't trust this move until there is a clear daily bar close below 1.2623. Wait for it before piling up your shorts.
Plus remember the convention-parade in Bruxelles in 1,30h with its all-is-fixed headlines.
You are one funny FUKKER SHEEP... USD: A 2 at 10 and a 10 at 2...
When the world is running down, you make the best of what's still around.
GOLDFARBEN HUNDINNEN!
Question is why or who is keeping it from falling to 1.12?
Be patient.
I'd guess SNB, although PBOC may also be involved.
The answer to that question is the Great Lesson of 2011.
Governments will do anything to keep the juggled balls in the air, and something of that anything can appear in the merest comment from the latest ape to run in front of an EU microphone and spout bullshit.
The EU is in the process of buying off the tiny Greek parties and getting them to align with New Democracy. And if that doesn't work, they will ratchet up the procedure.
Come on. They have spent 3 years dealing with this shit. You really think they are going to let a 38 year old firebrand heading Syriza upset this? His skull will stop a bullet, or he'll have an accidental fall or whatever it takes. Dominique Strauss Kahn learned. The Greek private bond holders learned.
Something will happen. Until the day it doesn't. If you are betting, that's what you're betting on.
Maybe that 38 y/o firebrand is doing exactly what they are telling him to do. Greece is a basket case and letting the Greeks vote themselves out of the EU is allot easier to manage than the EU having to force Greece out.
LTRO 1 & 2 have pretty much consolidated the debt with the ECB and saved the foreign banks holding Greek debt. Makes no sense to pump more billions into Greece only so they pay 95% or so right back to the ECB.
The orders for the market volatility and ensuing crash are coming from a different direction which is probably the same direction as in 2008.
Dood. Where have you been this year. The PSI elimininated debt holders who are not ECB and IMF. The only debt remaining, which is a lot, is held by insulated entities. There are no banks holding debt that were not part of the PSI or the lawsuits. No more are pending.
I'll repeat this, who the Greeks vote for is meaningless. They could all vote for the Anarchist Party of Upper Exarchia and it wouldn't matter. They could put a bullet in the heads of every member of the Greek parliament and it wouldn't matter. Its what the Greeks do at the ATM machine that counts. Thats the ultimate voting booth. If they pull out their cash and the Portuguese and Spanish follow suit, the Germans either need to print bushels of money or walk away from the Euro.
Thing is, the Germans will not print since even if they print, the Euro will still remain flawed and open to future attack while they are stuck with the bill. They have spent 3 years buying expensive band-aids and fixing nothing.
Its a German gut check, not a Greek one.
If you buy into the idea that this is a currency war between the US + China vs. Europe, then:
- Dollar up
- Euro down
- Stock market down
- Gold / Silver down
Followed by
- Stock market up (especially US financials)
- Gold / Silver slow decline and then stabilize
- US dollar sole reserve currency on planet
The Germans can't print but the ECB can - and will in great quantities - and the Germans will approve after a lot of screaming and kicking. Anybody who thinks Merkel is going to allow herself or Germany to be accused of destroying the Sacred Euro is so full of shit they'll never get the brown out.
ECB can print, but it has limits.
Look, Europe lacks leadership. There is no President of Europe with vast executive powers that can go in front of the TV and talk to a united Europe and calm everyone's ass down off the ledge.
There are a bunch of countries that until 50 years ago were killing each other, sharing a currency, with no deposit insurance. The people will panic, pull their cash out and then Germany will have the excuse it needs to walk away from the wreckage with its credit rating intact.
Once its clear that the EU has taken an iceberg size hit, and no amount of paper will patch the hole, its every country for itself ...
big short squeeze in the offing?
I tried that play, and got stopped out myself. I'd have to agree that it looks like we're well on our way to par.
I sold my EUO yesterday in anticipation of the squeeze ... not looking like a great idea right now ...
@ otto skorzeny
So says citi bank traders
There goes gold.
There go equities.
Gold and stocks ... US$ and UST look like a good investment. Who would have thought?
Lemmings to the slaughter really. I'll keep stacking.
Its got a ways to go down. Keep some dry powder
I see that some people believe that gold is going up today, hence the red arrows. Weird because the gold crash is real, whether you like it or not and I fucking hate it.
CAC 40 X7 SHORT GR is up 18% today, but who is counting?
Cue the teleprompter... Obama would like to inform you all how successful his 'strong dollar policy' initiative is working...
A good day to place a far out of the money bet on the weekly options. Twenty bucks could pay off big in a flash crash.
Twenty bucks sounds like an appropriate risk.
And with the YEN crashing too, the USD has but one way to go - up.
Elliott wave count shows long term bullish trend for the USD.
http://bullandbearmash.com/index/usd/daily/
Not sure I understand "and well on its way to the 1.20 levels that the current Fed and ECB balance sheets would imply"...
Where do the Fed/ECB balance sheet numbers come from? How is the Y-axis on the left calculated?
The banks publish their balances regularly. Tyler has had several posts showing the obvious correlation between the forex exchange value and the simple ratio of those bank balances. The balances can be used to quantify "How much have the banks devalued their currencies by printing?" The ECB has printed more recently but the exchange rate did not follow so Tyler posited that it should drop to the target level. It doesn't have to drop to that level but don't bet against him on this one.
I understand the concept, just not where the ratio came from. Thanks.
125.80 BID fellas.
.65 stop
@ newstreet
Do not try to catch a falling knife
(The Fed) Banana Republic Anarchy Printing Co. run by Ben Bananarchy must be in a panic.
Dont blame the FED for everything.
FED is only expanding the monetary base (your arse) and providing liquidity (lubrication). Banksters are doing the rest...
Bananarchy sounds like a more radical version of Bananarama.
Always focusing on the negative around here...FB is kicking ass! That should fix everything just fine.
Reuters reported that chuck Norris hit a wrong button on a eur trading monitor
Gold went first.
dow $37 - yikes.
crude crashing too.
Although I feel EURUSD should be no higher than 1.00 I must say I am a bit surprised they let it fall under 1.30. seems like the CBs put in quite the effort to defend 1.30. a sign that CBs are losing control of the Ponzi???
Or a sign that they have acknowledged that only PLAN B can save their skins now. Scary prospect... If we only knew the plans they have for us.
Various pricing models --
Some actors are at extremes in terms of their COT index
https://docs.google.com/open?id=0B16Nxp5pgJBzVFdVQVV6ZElSLWs
EU is fucked. and so is the spot price of Au and Ag in bennybux.
if i were smarter, I would have more dry powder for right about now.
ah well, at least it's not a total loss.
"as we reported two weeks ago" along with countless tout pieces on gold and no mention of the FT article showing collapsing demand for the metal in India. having a bias is bad for making investment decisions. could be approaching a peak on bonds
Deflation reigns supreme.
Bonds can go to -3%. A lot of money can be made enroute.
The really bad news is why deflation reigns supreme. Oil scarcity. This is forever.
Gold may never seem a safe haven, and meanwhile I despise dollars. Just amazes me why anyone would be parking their money in bucks, which pay negative interest. This is the craziest fucking world ever. And a very discouraging one.
Patience. Dislocations in the natural world tend to resolve themselves. In general the corrections are fast and violent. I've never slept better knowing these are just steps being taken that will ultimately make the snapback far more painful for those bending the tree....
Bring me the head of the one they call 'Spitzer'!
LOL
if Euro reaches USD parity bernanke will have night mares; I can't go beyond ZIRP or can I? Like black matter replacing USD? Negative interest means I pay YOU if you take my greenback as T-notes or as bonds.
So now we have the silly situation where USA gives negative interest T notes to CHina so that it has financial clout to send its troops to the south china seas where it actively promotes anti-china feeling; aka military clout. Why should China accept such a deal, financing the US military and US debt so that it gets lumbered with black matter T notes? Is there black magic in the FED? Not long ago the only good Red was a dead Red! Unless its Mcdonalds that owns the People's party of China. People's food and People's party on the same Oligarchy page. Wow, that's corpocracy efficiency and global clout. Its a knock out!
If that happens maybe I'll buy a BMW.
Gotta wonder what Bernanke thinks about all this? Strong dollar will crush US exports and not help the economy.
Funny how ZH could have said gold was crashing but no the headline is about the euro. Funny and somewhat disingenuous.
Which one will stay crashed? ;)
Paper gold==Euro.
Same thing. And both are going down, if not to zero.
Chart tracking, the present sloped head and shoulders has completed, setting up a major or inverted head and shoulders that could lead to USD/eur at 1.40. Both other indicators are possibly at turning points, so from the projection in this article to 1.20 there could be a bounce back. The long term .82 that was recently mentioned, one might have to wait till JPY and AUD join the party.
Quick, buy FaceBook....
RUMOUR HAS IT: JPM AND MS TO BE DOWNGRADED SOON
FB in the green zone, so funny !
But...but...according to the latest COT...EVERYONE is short the Euro...why...how can this be from a contrarian viewpoint...everyone on the same side of the boat?...Oh! The humanity!
Long term contrarian view is that Europe will recover while America is still on its long decline.
Back the truck up because gold is on sale and in the not too distant future anyone holding physical will be the last ones standing. We knew the paper price would continue to fall until shipments of gold don't get filled. Remember that spot price is nothing but the paper value which we all should know by know is pure dogshit.
I just recently sold some diamonds and accepted a few grand less for payment in physical. Best deal I've ever made.
Two local coin dealers had one, ONE silver maple between them yesterday. Only silver one had was junk silver.
As laws of physics says. Hedge accordingly and bring it!
Yeah it's getting harder and harder to come by I myself have never started stacking silver (only gold) but I think that's only because I just loooooove gold. I need to start diversifying and make a nice silver stack next to my gold one. Oh and also I do work in the jewelry industry so most of the gold I come by I buy off of people who simply need the money and I pay them more than any pawn shop or chain store will give them. Win win. :-)
Bullish for the US trade deficit.
google trends -> fiscal cliff ->
http://www.google.com/trends/?q=fiscal+cliff&ctab=0&geo=all&date=all&sort=0
The real carnage is on EUR/JPY
and the balance of payments chart
( about $ 700 000 000 000 in 2012 alone)
http://67.19.64.18/news/2012/5-20jw/image014.jpg
Anyone know where to get data on what percentage of total USD trading is in the EUR/USD?
Which do you think recovers first in the long run:
1. The fascist American police state and its 50 million illiterate illegal immigrants?
or
2. The European Union with its highly educated white population?
My money's on Europe. Go long Euros and European stocks. Timing is everything of course. Wait until a week or two after everyone realizes Greece is never leaving the E.U.
Sadly this comment is completely missing the point. Even if I agreed that the social slurs it utters are correct, which I do not and with direct knowledge, having worked both in the US and Europe for 20+ years, it would still be wrong.
The reason is that the main determinant of a recovery is the flexibility of the system and its integrity. The US system with all its defects is still orders of magnitude more flexible and adaptable to change that the systems of most European Countries. And adaptation capacity is what will take to move into the next era.
Until next time,
Engineer
There may be a record amount of shorts and a risk of a sqeeze, but I still like to look at the intrinsic valuation of a currency.
The Big Mac Index helps, but I like to go on Intercontinental's website and see hotel prices in real time.
In 2004, I was in Buenos Aires and got a IC hotel room for $75. Greece should be at that price or cheaper now, and I am seeing rooms there for 95 Euros. Rome is 185 Euros. Berlin is a very reasonable 126 Euros, and Madrid is 158 Euros.
IMO the prices in the PIGS nations are still way too high. When the price of a IC hotel room in Athens hits $75 a night, then I think I will exit my EUO, Euro short.
BK closed his positions to soon. Settled for a double instead of a home run.
But he's up by 3 runs just after the 7th inning stretch.
Why USD is up with deficits out of conrol and after printing of trillions by the FED (bought 60% of all debts issued by US government in last 5 years)
Simple, just think that all currencies are a Ponzi scheme, but that you don't have a choice but to hold one of them at a given time to have liquidity so that you can jump to something else in a microsecond (HFT). Which one would you choose? Easy the one that at that time has the lowest probability of the Ponzi scheme to be unraveled.
At this point in time that currency is the USD... But careful this changes from minute to minute...
For Gold and Silver holders, the value equation is very simple:
In the wilderness, strenghth dominates -> Men get in power -> Men want women -> Women like Gold and a little less Silver -> Women have a way to compensate men when they are happy -> Therefore, powerful men want Gold and a little less silver
Finally the availability of both is limited.
Thus Gold is worth its weight in Gold and Silver less
So, remember, Gold has no other value but that one derived from this very simple and you may call them stupid statements. Silver has some uses...
Until next time,
Engineer
And US Dollar closes to a new 21 month high.
http://bullandbearmash.com/index/usd/daily/