Everything Up As Gold/Silver Outperform

Tyler Durden's picture

Between our overnight discussion of the size of the Fed's QE and Goldman's call for QE as soon as April, risk assets all synced and surged today as the USD gave back most of the week's gains. The S&P 500 managed to close above 1400 for the first time since June of 2008 on decent volume - even as AAPL closed down 0.7% (and -2.5% from the $600 threshold it peered over) as financials once again took the lead. BofA is now up 13.6% from pre-JPM-dividend news (more than double its peers) while GS and C languish up only around 2% from that point. High-yield credit markets were nothing like as QE-ebulient as stocks today as investment grade outperformed (more up-in-quality rotation) and the last 45mins actually saw active selling in HY and HYG while IG and the S&P leaked higher. Treasuries steepened very modestly with the long-end maybe 1bp higher in yield close-to-close but the 7-8bps compression off overnight high yields is noteworthy and brought the broad risk asset complex back in CONTEXT with stocks (after yesterday's dislocation). The USD lost around 0.4% from late last night on the day (though still stronger on the week) as EUR and JPY tracked it broadly but higher yield AUD outperformed handsomely (more QE-funding currency needed). Commodities bounced nicely with Copper the day's winner followed closely by Gold and Silver (up around 0.9%) and Oil practically unchanged after dipping over 1% on the SPR chatter and recovering on the denial. VIX ended the day (spiking) higher and the term structure very slightly flatter. After spiking Friday and Tuesday (as we broke the uptrendline) average trade size has drifted notably lower and was its lowest in over a week today suggesting less institutional buying here.

The FX markets maybe sent the most direct message that from the start that expectations were ramping again for USD-intervention QE which was then helpfully confirmed in a weird parallel universe by stronger than expected US data (implying no need for QE?)...



Higher beta credit markets, which we would expect to follow glibly along on a QE/risk-on day - did not. Particularly notable is the selling pressure into the last 45 minutes or so in HY and HYG compared to IG (up-in-quality) and the S&P...


Post-JPM, financials remain in charge as the worst continue to be first. BofA is the new champion of the underdogs (over $9) as GS and Citi lag...


Commodities did well - even as Oil dropped (with the Brent-WTI briefly but sharply compressing then recovering) on SPR and recovered to unch as the USD lost 0.37% on the day. Gold and Silver rejoined at the QE hip and outperformed (removing the sport of calling the drop in Gold from CNBC's ticker) as the realization that QE is inevitable washed over market participants. Copper benefited also.



Broadly speaking, thanks to Treasuries rally all day and only quite JPY-cross moves, CONTEXT reverted back to equity market's new reality. Whether yesterday's spike was corporate bond supply or purely technical breaks is unclear but it was a dislocation we have not seen in a while.

While betas make for tough comparisons, today seemed to us like a story of precious metal outperformance as it outpaced equities and Treasuries (in CONTEXT) and even the USD. This makes us wonder if the lack of real broad enthusiasm in stocks today on such an otherwise surge day is a sign of QE's increasingly weak effect on reality or perception or merely a reflection of Treasuries rally and the correlation machines not knowing which way was up...

Charts: Bloomberg and Capital Context

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Seasmoke's picture

BOA OVER $9 ......HOW , WHAT, WHY ????????......i know they signaled at the beginning of the year that it was the play , but its only march 15 !!!!

trav7777's picture

penultimately sad. And by that I don't mean "2nd to last," I mean a cooler sounding form of "ultimate"

true brain's picture

This is the effect of Bernanke mafia put. Just like the mafia, they beat you up twice and after that you pay every time they ask. So Bernanke doesn't have to do QE; just the rumor will drive up stock prices. Just wait for the actual QE, gold will be 2500. 

John Wilmot's picture

Ding! Ding! Ding!


Good dog.

DoChenRollingBearing's picture

+ 1

Front run ´em.  Sell in April!

MeelionDollerBogus's picture

Too bad most of the time that's horrifically wrong advice.

Most of the time mid-May to mid-July is the best time to load up on stocks OR some Puts with > 90 days or both (oh no, actual hedging?).

I'll never sell in May and because of that I'll make more money.

GovtMediaLiars's picture

I know it. I hate BAC as a company and as a stock and expressed dismay at this myself in yeterday's market and index updates.

I don't begrude anyone their profits I just hate to see a firm this bad, perform so well. Of course, they were also beat down the farthest.

Zero Govt's picture

"I just hate to see a firm this bad, perform so well."

I die a little every year I hear Bill Gates is still solvent/running a charity/walking unassisted

IAmNotMark's picture

I would love to shake Bill Gate's hand and thank him for all that he has done for me and for humanity.  If it wasn't for Microsoft, computing would be much less advanced than it is now, and much higher priced.


ThatGuyEhler's picture

You don't seriously think he has been a net positive for society, do you? Try googling "Bill Gates Eugenics", and you'll see what I mean.

MeelionDollerBogus's picture

the eugenics stuff is a sham. Not one solid story among them. Surprised someone so gullible made it to ZH. Oh well, thems the breaks. We need the occasional jester other than MDB or MF.

StychoKiller's picture

You Sir/Madam, are obviously NOT a computer programmer!

MeelionDollerBogus's picture

Idiot. If not for Bill Gates and Steve Jobs computing would be almost FREE for all civilization. They did everything they could with copyright terrorism to stop this amazing thing we call OPEN SOURCE. This amazing thing teaches & gives freely what others charge money for and tends to turn out FASTER BUG FIXES because more people are working on the same problem.

Fucking idiot.

Your head needs a shake.

Or a plastic bag.

spartan117's picture

PMs up, but mining shares flat to down.  Same old game to keep everyone out of mining and in general equities. 

DoChenRollingBearing's picture

Even a bearing, now in Peru on a visit, can appreciate the PMs going up.  Especially as Peru is No. 1 0or 2 every year in silver production and No. 5 in gold.

The Peruvian economy is doing VERY WELL, and its currency the Sol continues to strengthen vs. the US$.

And, LOTS of bearings are being dold down here, our best year (to date) so far.

Sudden Debt's picture

I have 2 rolls of 19th century sols in my collection! Beautifull coins!
Used to buy them for 15$ a piece.

DoChenRollingBearing's picture

+ 1 for owning beautiful coins!  Good investment!

Midas's picture

A quick search shows Peru to produce around 116 million ounces of silver. At $35 an ounce this comes up to just over 4 billion dollars. Even if they were getting this silver for free it doesn't say much about their economy if this is having a noticeable effect. Not trying to wind you up, but I am always amazed at how incredibly thin the silver market is. Even the big producers don't produce enough to warrant attention. At today's prices anyway..... Cheers.


Can you imagine the windfall profits metal rich countries like Peru will reap when PM's real wealth is (re) realized?  A lot of poor countries will be helped, assuming they don't get invaded under a NATO / US humanitarian mission.

trav7777's picture

how the fuck are they going to be helped?  The reasons the countries are poor has nothing to do with the value of resources; it's all about the behaviors of the people.

Frickin Luxembourg doesn't have any gold or oil

DoChenRollingBearing's picture

trav, I think that Peru is seeing a slow evolution towards understanding that freedom and being left alone are the way to advance a country.  The people here KNOW they have been lied to for generations, and after some horrific years with Socialism and bad-ass Communist guerillas, most of their recent leaders have just seen fit to not change much and only steal relatively small amounts.

Kind of the opposite is happening in the USA.

trav7777's picture

the way to advance a country is to bring in advanced humans...amazingly, every time this group of people arrives, civilization is brought in their wake.  When they are driven out, civilization collapses.

Calmyourself's picture

When your right, your right, see South Africa.  Collapsing into a concrete coated dungheap shortly..

trembo slice's picture

who are civilized peoples?  are there a group of people that are inherently better than the rest?

IAmNotMark's picture

They're the ones that have more advanced weapons, which they use to 'civilize' the natives.

trav7777's picture

yeah, it's not like they bring any refrigeration, electric power, or fucking modern medicine.

The belgian congo wasn't invaded with fucking advanced weapons for a slaughter; the belgians turned that place into the fastest-growing economy on the continent...roads, bridges, electricity.  Then it got handed over to the natives.

You idiots think South Africa is novel?  This shit has happened all over the continent in the past 50 years.  Now, there are weeds pushing up through all the roads the belgians built.  Fucking advanced weapons WTFEVER.  Idiots.

MeelionDollerBogus's picture

Yes. There are people who are better inventors, better thinkers and stronger with better immune systems. You can't tell in advance who they are but once they arrive you can see it clear as day. Yes, there are superior humans and all others are weaklings to be removed through evolution.

That is in fact normal.

Campagnolo's picture

I think you are right on that one Trav

DoChenRollingBearing's picture

@ midas

It´s more than just silver and gold (and copper, lead, zinc and coffee).  There has been nearly a generation of freeing up the economy, at least in certain sectors, here in Peru that has helped a lot.  The natural gas found in the 1980s are also being used to power much of the smaller-car fleet here in Lima (one of our employees has a NatGas powered car -- why can´t they do THAT in the RICH USA?).

A company like ours (importing Korean bearings for spare parts) could NOT prosper or even exist now in the USA.  Not a small one anyway.

Yes, the exports help a lot, but it is not the whole story in Peru.  And Peru´s BIG future in mining looks to be GOLD.

trav7777's picture

Peru has also decriminalized coca production which has helped stem a lot of violence.  Colombia did the same thing; both nations have seen crime rates fall quite a bit.

akak's picture

Actually, coca leaf production was never criminalized in Peru, nor in Bolivia, despite the best attempts of the ever-interventionistic US federal government to encourage them to do exactly that.

DoChenRollingBearing's picture

+ 1 to each of you two.  Coca itself was never banned in modern Peru, I even saw a coca bush one in the high jungle (little scraggly thing).

Crime is DOWN here in Lima, the guy at the Casa de Cambio I go to when here told me so.  He said more cops helped (and probably more cops because the economy is doing well).  I hope Peru can keep pulling this off even with China in some peril.

akak's picture

Hey DoChen!

Wow, you only saw a coca plant ONCE in Peru?  I was frequently stumbling upon them in Bolivia, and you're right --- they are pathetic, scraggly-looking things that I would not have looked at twice had I not known what they were.

And all those curbside coca leaf sellers in LaPaz!  Do they have those in Lima or Cuzco as well?  Always with the leaves in those bright blue plastic bags, too ---- I wonder why.  Can't say I cared for my few attempts at coca leaf-chewing, though --- nasty taste, and my mouth and tongue just got numb.

Sudden Debt's picture

Slv options hardly moved. I'm only going to go long at 28, 27 and 26.
And at whatever price, i'm loading up 60 ounces a month whatsoever of the real stuff.

EBR MOD 0's picture

Way to go SD, thanks to the cartel so the sale prices on real metal, none of that paper crap for me..

Thomas Jefferson's picture

Might want to pick up some PVG.  In Bob Quartermain and British Columbia we trust.

DosZap's picture


A WORD to the wise this time.

IS not like last time, ok to invest in the REAL DEALS,(known quanities) if you want to die broke invest in speculative miners, this trip is going to be far different than the last one.

espirit's picture

Why wait on more QE?  The Banksta's doing fine and little more free money won't never hurt them.

Quite obvious who's running the show here, and it ain't O'Boomer.

BKbroiler's picture

I don't wanna hear anything until it's back over $1850...

walküre's picture

$3.6 trillion

What butt are they pulling this out of?

When is someone calling them on the carpet for being absolutely grotesque and stupid? The money doesn't exist and just because they can create trillions out of thin air, doesn't mean those trillions are real and have any value or purchasing power.

This is GAME OVER, folks.

Calmyourself's picture

No its not game over. It is game over when you personally are in the street with 500K of your closest friends, then maybe its game over..

John Wilmot's picture

"What butt are they pulling this out of?"

That would be yours, mine, and the butts of all other holders of US dollars. They call this inflation. Try to keep up.

As long as there's capital in the dollar denominated world it can be expropriated via inflation. Sky's the limit. After the Weimar hyperinflation all of the mortgages in Germany were worth the equivalent of 1/3 of $.01. What does that mean, other than that there's no God? It means that the German central bankers robbed the holders of marks of damn near everything, like 99.99999999999999999999999999999999999999999999999999% of their wealth.

In short, the Fed has only scratched the surface. Bernanke says: "I have not yet begun to print!" "Print free or die!"

bankrun's picture


From: Z A N
JPMorgan Chase

Comment No: 57019
Date: 3/14/2012

Comment Text:

Dear CFTC Staff,

Hello, I am a current JPMorgan Chase employee. This is an open letter to all commissioners and regulators. I am emailing you today b/c I know of insider information that will be damning at best for JPMorgan Chase. I have decided to play the role of whistleblower b/c I no longer have faith and belief that what we are doing for society is bringing value to people. I am now under the opinion that we are actually putting hard working Americans unaware of what lays ahead at extreme market risk. This risk is unnecessary and will lead to wide-scale market collapse if not handled properly. With the release of Mr. Smith’s open letter to Goldman, I too would like to set the record straight for JPM as well. I have seen the disruptive behavior of superiors and no longer can say that I look up to employees at the ED/MD level here at JPM. Their smug exuberance and arrogance permeates the air just as pungently as rotting vegetables. They all know too well of the backdoor crony connections they share intimately with elected officials and with other institutions. It is apparent in everything they do, from the meager attempts to manipulate LIBOR, therefore controlling how almost all derivatives are priced to the inherit and fraudulent commodities manipulation. They too may have one day stood for something in the past in the client-employee relationship. Does anyone in today’s market really care about the protection of their client? From the ruthless and scandalous treatment of MF Global client asset funds to the excessive bonuses paid by companies with burgeoning liabilities. Yes, we at JPMorgan that are in the know are fearful of a cascading credit event being triggered in Greece as they have hidden derivatives in excess of $1 Trillion USD. We at JPMorgan own enough of these through counterparty risk and outright prop trading that our entire IB EDG space could be annihilated within a few short days. The last ten years has been market by inflexion point after inflexion point with the most notable coming in 2008 after the acquisition of Bear.

I wish to remain anonymous as of now as fear of termination mounts from what I am about to reveal. Robert Gottlieb is not my real name; however he is a trader that is involved in a lawsuit for manipulative trading while working with JPMorgan Chase. He was acquired during our Bear Stearns acquisition and is known to be the notorious person shorting in the silver future market from his trading space, along with Blythe Masters, his IB Global boss. However, with that said, we are manipulating the silver futures market and playing a smaller (but still massively manipulative) role in manipulating the gold futures market. We have a little over a 25% (give or take a percentage) position in the short market for silver futures and by your definition this denotes a larger position than for speculative purposes or for hedging and is beyond the line of manipulation.

On a side note, I do not work directly with accounts that would have been directly impacted by the MF Global fiasco but I have heard through other colleagues that we have involvement in the hiding of client assets from MF Global. This is another fraudulent effort on our part and constitutes theft. I urge you to forward that part of the investigation on to the respective authorities.

There is something else that you may find strange. During month-end December, we were all told by our managers that this was going to be a dismal year in terms of earnings and that we should not expect any bonuses or pay raises. Then come mid-late January it is made known that everyone received a pay raise and/or bonus, which is interesting b/c just a few weeks ago we were told that this was not likely and expected to be paid nothing in addition to base salary. January is right around the time we started increasing our short positions quite significantly again and this most recent crash in gold and silver during Bernanke's speech on February 29th is of notable importance, as we along with 4 other major institutions, orchestrated the violent $100 drop in Gold and subsequent drops in silver.

As regulators of the free people of this country, I ask you to uphold the most important job in the world right now. That job is judge and overseer of all that is justice in the most sensitive of commodity markets. There are many middle-income people that invest in the physical assets of silver, gold, as well as mining stocks that are being financially impacted in a negative way b/c of our unscrupulous shorts in the precious metals commodity sector. If you read the COT with intent you will find that commercials (even though we have no business being in the commercial sector, which should be reserved for companies that truly produce the metal) are net short by a long shot in not only silver, but gold.

It is rather surprising that what should be well known liabilities on our balance sheet have not erupted into wider scale scrutinization. I call all honest and courageous JPMorgan employees to step up and fight the cronyism and wide-scale manipulation by reporting the truth. We are only helping reality come to light therefore allowing a real valuation of our banking industry which will give investors a chance to properly adjust without being totally wiped out. I will be contacting a lawyer shortly about this matter, as I believe no other whistleblower at JPMorgan has come forward yet. Our deepest secrets lie within the hands of honest employees and can be revealed through honest regulators that are willing to take a look inside one of America's best kept secrets. Please do not allow this to turn into another Enron.

Kind Regards,
-The 1st Whistleblower of Many

flacon's picture


Smug. That is the impression I got from Blackrock when I worked for them, and the same for Merrill Lynch. 

walküre's picture

With revelations like these, all fiat will be worthless by EOY.

All fiat is a shell game. Nothing is backing it. No controls over how much fiat is sloshing around the world. "Funny Money" is about the only label that all of today's fiat deserves.

When the run on physical PMs and all tangible assets begins in ernest, it is too late to react.

That $100 drop in POG on 02/29 was NOT a natural market move. It had to be orchestrated to suit Bernanke's speech.

I could care less what these vermin did all day and night long if they didn't have access to the money supply for the rest of the world that is fucking FORCED to accept their funny money!

John Wilmot's picture

...the feeling is mutual. They could give a fuck what you or the government do as long as they can print the only legal tender.

Thomas Jefferson's picture

Good to see more whistle blowers coming out of the wood work. 

Tenshin Headache's picture

From that letter, I would conclude that someone's JPM short positions are not working out.