Global Dollar Liquidity Freeze Leads To Pervasive Sell Off
Just two charts confirming that we have entered a complete USD liquidity lock up, and that the global coordinated USD swap line rescue operation will be launched any minute: both the US FRA-OIS and the EUR Basis Swap are at multi year extremes. The entire dollar funding market is now at levels not seen since the Lehman collapse and is effectively frozen. Only this time it is much, much worse as never before has the global central bank cadre been assumed and implied to be backstopping the global liquidity cascade. Ex-out the implied backstop by the monetary authorities, and liquidity is now locked up more than ever in the history of capital markets. The liquidity crunch explains why everyone is liquidating the one asset that is performing best YTD to procure much needed dollars - gold.
FRA-OIS 3M:
FRA-OIS 3M - LT:
And the EUR Basis Swap:
Charts: Bloomberg
(10 votes)
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Paper gold, none the less...
[Voiceover by the actress playing young Jenny Curran in Forrest Gump]
Basic arithmetic just called and said there can be no happy ending, no matter The Bernank, The Trichet, The Merkel, Sarkozy or Dudley does/says, and no matter what the CEO of Jeffries, Mr. Dick Handler, claims, and that when it comes to CONfidence games, mathematics ultimately and always is in control of the show.
*Barton Biggs just heard of two stocks with the ticker LNKD and GRPN that he says will be the Standard Oil of the 21st century and he's double-fisted buying (he claims he'll even sell his shares of The East India Trading Company to raise cash if need be).
**Abby Joseph Cohen announced, via satellite feed somewhere on Lord Blankfeins Bug Out ranch/compound in Paraguay, that she sees a lot of upside potential for the global economy and equities, and is therefore, quite bullish.
***A whole slew of wannabe Stevie Cohens, seeing the fix that Stevie Cohen is in, just announced that they're sick of client redemptions flowing in hot & heavy, that they "should've went to med school," and are taking their ball home while acknowledging that there still will be a highly rigged game (that they're implicitly admitting they don't have any influence over, no matter how large their AUM) despite their lack of participation in it.
****Steve LIESman just tweeted that it's important, despite what is actually the very scary reality of the economic times, for The Bernank to perpetuate CONfidence, and he's upset with Mark Zandi, Christina Romer, Austan Goolsbee, and last, but not least, his cohorts at cnBSc for not doing a better job at doing so.
Are there any greater fools left or have they all left the building?
Yes. Stay tuned for the Supercomittee next Wednesday. Lots of greater fools devising lies there.
Got FAZ?
silver is getting absolutely destroyed. I guess $60 isn't happening next week anytime soon.
A lot of bagholders been created by silver pumpers lately
Which pumpers, exactly, lately? And "bagholders"? What a blinkered, short-term mindset you have. It ain't over until the fat lady sings --- and, I hope, stomps the shit out of your scrawny ass.
Next stop gold at $1450 bitchezzz!
Greenspan Shrugged
Next stop gold at $1,450 bitchezzz!
Great, will be online and ordering like a SOB.(<:
My back is so scarred, the beatings no longer hurt.
I only wish I could give the number of greens you deserve
Thanks for the lightness!!!! om
I rushed to my safe to make sure the paper price adjustment didn't cause my physical silver to suddenly dissolve into the air.
Nope, still there. Phew. Guess I'm not a bagholder then.
lol, almost sharted when i read that...
ur stack is buying less of everything else today, bagholder
Only if I'm selling it today, shithead.
ah the old canard of bagholders "my account value isn't 0 because I haven't pressed the sell button"
I always wondered what the hybrid offspring of a douchebag and an asswipe would look (and act) like.
I wonder no longer.
Eh? When did silver go to zero?
I want to buy an infinite amount at that price.
I've offered $5 plus an additional bonus of $10 for each ounce of silver someone- anyone - wishes to dig from my back yard, and I've had no success finding any takers.
Lazy farkers.
You're expecting silver to go to zero? Let me know if you have any to sell at that price.
I don't care what silver trades for today or tomorrow. I might care what it trades for in six months or a year, but until I do the daily price is meaningless noise, and I haven't actually gained or lost anything until I pull the trigger.
This isn't rocket science.
Hypothetical scenario: Silver goes to $5/oz, and the USD goes to toilet paper. Which would you rather have. I sure wouldn't put that dirty coke money in my rear. Fire starter maybe.
Today being the only operative word in that comment.
Behold the sound of one brain cell yapping.
http://www.youtube.com/watch?v=nnpEI3njoeo
What, you mad that all your silver is going down in value, Trav? Why didn't you sell when you were talking so much shit?
Could it be that you are a contemptable hypocrite who wants everyone to be poor or dead so they can't use any of your precious oil?
i've been thinking...there is no credible way that anybody could be as stupid as you continually appear to be, so you simply have GOT to be a shill for someone trying to create lots of silver bagholders. It's either that or you actually DO believe the moronic stuff you type, in earnest. I'm just not willing to believe yet that anyone could possibly be that dumb. Convince me.
As bitter and hateful as you continually are, it must really suck to be you.
nah it's actually awesome to be me.
I guess I am a bit of a bagholder; I just bought some silver...cufflinks. From Hermes. Just to celebrate being awesome
So awesome your wife and kids left you?
I guess they were jealous of your awesomeness.
Your life is pretty shitty, dude. You just can't admit it because that would require that you take some fucking responsibility for your situation.
huh? kids are right here dude, the wife i had to get rid of
You're pretty brazen for a dude who wants to stack silver and lord it over starving people
You know trav777, sometimes you act like an inflamed hemorrhoid,
you hang out just waiting to get irritated.
You can be really annoying and disruptive.
I can see why you can't keep a wife.
I pity your kids.
Maybe there's hope for you yet. I assume you are buying new, at a retail store, because you feel like it. Not on CL, and not just because it's some random crap being liquidated
How can I convince you of ANYTHING when you hear only what you want to hear, and know only what you heard?
well, you managed to convince me that you're pretty frickin stupid, so don't sell yourself short, man
Congratulations on your graduation to full fuckwad troll.
You can expect automatic red arrows from me for your every comment from now on. You've proven yourself to be little more than a divisive, hate-filled, narcissistic troll and complete asshole. Thank you for allowing me to skim over each one of your posts as irrelevant going forward.
oh nooooooooooooooooo
the mighty AKOCK is going to click my red arrow...wtfever will I do? How will I live?? How will I find the strength to carry on?
Come on, dudes
This is too much fun to be a carrying on so
You two sound like a couple of brothers of mine
The sun is shining even on the other side of the world
Always shining that sun
the organic shit is happening and we are a part of it
What a great fucking day even if my pocket is not so full as it was om
oops
"Open swap lines, Bernank, Open swap lines!
Print, Trichet! Print!"
Geithner got a very cold shoulder several months ago when he went preaching the US "monetary" gospel of Bernanke to the EU. Given that he used to run the NYFRB, I wonder if the Fed is going to let the EU twist a bit before doing more to "help out".
Trichet no longer has control over the EZ printing press
Well aware of Draghi's comings, and Smaghi's goings. Take it up with Truth in Sunshine.
Right; Trichet doesn't have control of the ECB printing press unless Merkel & her loyalists put the German People on the open spit and roast them toasty in lieu of the PIIGS(+France) that should be roasted given the way the EU Member States have governed themselves since this brilliant idea (/s) of a union between nations as different as Germany & Italy was hatched and implemented.
But if the German People allow themselves to be sacrificed to the bottomless pit welfare states that are PIIGSFUK (PIIGS+France+UK), well then, Trichet will be a busy little printer.
Is it time for the asset sales to raise liquidity to commence? How low is low?
ppl had 15 years to participate in the bubble(s). All that wealth was phantom wealth (bubble wealth), and unsustainable. Now, we revert back to the mean, and 'real' price discovery, unless Central banks intervene, forcing future adjustments to be more severe. So wealth preservation is the priority. Anyone owning risk will be steamrolled.
correct, that is what SHOULD happen....however it will not, because the fed will pull out all the stops to keep markets from reverting to pre bubble mean
You don't get it. If they do that the cost-structure of owning the same assets explodes. That alone further depresses asset values like real estate, most people's #1 wealth asset. And margins get squeezed across the board, requiring further downsizing and offshoring. Finally capital flies overseas
Yes. Can you imagine how many yuppies and wannabes are locked into unrealistic cost structures based on pre-crisis asset prices? And they're being squeezed by rising input prices
The yuppies & wannabes were last heard booking their limited time promotional 'Want To Get Away?' flights to fantasy island courtesy of Southwest Airlines (also known as The Bernank Special).
The real inner sanctum already have their private jets fueled & waiting to be fired up and their compounds ready in places like Paraguay and certain patches of very rough terrain in Colorado.
In the end, The Bernank will be known as the boy who blew bubbles so that very important friends of the New York Branch of the Federal Reserve Bank could hitch their rides to the last opportunity to suckle the remaining lifeblood of taxpayers
Basic Math says:
"Just like the mother in the movie 'Blow,' the inevitable process that has to occur, global deleveraging, on a scale at least equal to (actually far more so given mark-to-fantasy valuations and leveraging gamesmanship) the circa-1981 through 2011 credit fed and central bankster sponsored debt bubble, is a complete and total bitch."
We're totally on the same wavelength. Uber yuppies have their bugout bags packed. Average yuppies are stuck with feet in concrete, struggling to keep what they have.
The circa 1981 Fed made it policy to stripmine the US productive economy and replace it with financialized KoolAid. Build massive overcapacity and slash median wages to offset money printing on a massive scale. They were just lucky that an oil shock didn't happen sooner
So your thesis is that after 90 years of intervening markets, the Fed will just stop all the sudden and things will go back to how they were? If they stop intervening it's just your queue that there's no longer any possible hope of the US dollar continuing to exist and to start emptying shelves at the supermarket.
No, my thesis is that the Federal Reserve 'Bank' is pushing on a string, pulling on a thread, shouting down a well/rabbit hole, and that its demise has already been planned, given what is to transpire, and that its successor has already been formed and is waiting in the wings, with a similar mission statement, only to be carried out with a more global focus and more global authority (think SDRs and other 'world weighted' things, etc.).
Remember when all that new design US currency got stuck in the printer and had to be stored so it could be manually sorted...
That was a coincidence, wasn't it?
There's no such thing as a Sanity Claus, no rally. He who sells first wins, profit taking time.
oops
Long end treasury traders getting whipped!
The algos in rest of CDS market gonna go crazy and fail as unwind goes parabolic. The hedges fail. Peeps unloading gold, silver, oil, anything that will get US$ so get out of dollar liquidity trap.
Like I always say, it's not panicing if you're the first one out the door.
That door may turn out to be a lot narrower than people expected considering how many want to push through
One more (major) sell-off before QE3. I`m holding my breath on it.
http://journey-to-alpha.blogspot.com/2011/11/one-more-sell-off-before-qe-3.html
No way with 2+% GDP and CPI.
Don't forget crude price plus pressure from overseas to keep dollar-denominated paper values from nosediving
QE3 No later December 13 FED Meeting.... Maybe alot sooner.
QE3, in similar fashion to QE2, will only accelerate the process of fundamental economic decline we're experiencing at WARP speed, as SNAP cards will buy 50% less grub, and unemployment/underemployment spike as those looking for the few jobs open or who are working at low wage jobs or part time pass on the opportunity to pour their whatever money they have left or can borrow and wages they earn into increasingly expensive gas tanks, utility and grocery bills and medical treatments for those pesky and painful ailments.
I'm not saying you're prediction will be wrong (or correct), but just pointing out some to be expected consequences.
Deleveraging is a mofo, and when The Bernank tries to postpone the laws of physics, it only gets more mofo-ey.
*p.s. - We're under the auspice of QE-lite right now, at any rate, given Fed churning/burning through and liquidating portions of its toxic sludge fund to repurchase more toxic sludge.
In dealing with these exponential graphs, when you get closer and closer to that little sideways 8 things sure do start to speed up.
Keep your hands and arms inside the train at all times!
until the g-forces pull them off?
a visual reminder of my last SLV/GLD encounter.....
http://www.youtube.com/watch?v=NFIDVMYx34o&NR=1
At what price does the Giant Squid go private?
-44% YTD
Know that, and one could extrapolate the EUR/USD bottom.
Right after the record bonuses for fraud.
Bank on it.
We don't say fraud we say providing liquidity.
The question I would like answered is, who (or what ) the Devil is propping up BAC this sesion ? RTQ: + 0.02/5.92
Read this one:
http://www.cnbc.com/id/40530212/Goldman_Sachs_2011_Forecast_Stocks_Gold_...
Goldman’s global investment team rates U.S. Large Cap Commercial Banks among its "Top" Trades for 2011.
LOL!
"Underweight consumer staples" for 2011, quoth the Vampire Squid.
Now then, what has Philip Morris Intl. done this year ? Up some 21% ? Of course, BAC has been a real winner -- on the short side, down some 55% YTD. Never buy what a cephalopod is peddling. Your capital will be drawn into the Deep, never again to see the light of day.
Squid's forecast from a year ago:
"Goldman Sachs is bullish on the U.S. economy for 2011, and forecasts U.S. stocks will see their third straight year of gains.
The investment banking powerhouse sees the S&P 500 gaining nearly 25 percent to a level of 1450 in the next 12 months, fueled by strong corporate profits, easy monetary policies and an improving U.S. economy. "
GS will not go private at any price.
As a "private" company, they would be gambling with their own money.
That was the whole idea behind going "public" in the first place.
Gulp
Sorry. I can't help. I ran out of buy before they ran out of dip.
lol right there with you brother
if you didn't get your dollars on that last dip, it may be too late
they still have dip, but they've run out of dollars!
I will cherish your words forever
now I have to clean up my notebook
I've advised not to buy when gold went back to $1800 because it was too early after the September correction and because Gold was a lot higher than its moving averages. So here is the correction.
I think fair range is between $1560 and $1700 with $1640 the fair value (for the time being).
So between $1640-$1700 is ok and between $1560-$1640 is very good value.
If gold brakes super strong support at $1560 then it is fucked, it may go down a lot.
Regarding Silver, I say it again: too dangerous right now because it is a lot more volatile than Gold. The GSR keeps going up and that is a bad sign. So my advice: avoid buying Silver until the GSR starts falling again (on a monthly basis) or until it gets ridiculously high (like 80 for example).
A part from that, don’t fucking sell your physical.
The time for selling silver was in May/September when it was above $40 and Gold when it was at $1900.
don’t fucking sell your physical
all the rest is opinion
Fair enough
I still like your opinion - just reacted to the word "fair", that's all
"fair" just denotes a consensual, free transaction, "fair price" is just "unrigged market price" for me
Dude, WTF? I mean SERIOUSLY, WTF?
Why are you being so AGREEABLE, asshole? lol
Regrettably, we are never in danger of the former from you --- but all too aware of the latter characterizing your behaviour in this forum.
flew right over your pinhead, didn't it?
No, I'm just finally sick and tired of your gratuitous bullshit.
Trav,
You have a lot to say for someone that's all opinion and no added value. Why don't you find something productive to do?
Except for that last line of impressive 20/20 hindsight.
Check my old posts and you'll see that I warned about golds run to $1900 several times. I even said it would go back to $1600 !
And that was easy to see from the MAs.
This is not a correction. It's a crisis of liquidity. Way different.
Are we reliving first week of June, 2008?