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Globally Coordinated Nothing
Equities dramatically retraced to the very edge of the global bailout rally top with credit very much in sync and most notably HYG not finding a bid. Implied correlation (sometimes considered crash risk) rose to contract highs for the 2013 maturity as cheap protection was very bid this afternoon. Peter Tchir, of TF Market Advisors, said it best today: "I can't get the Amy Winehouse No No No song out of my head. No ECB. No IMF. No Fed. No PSI. No balanced budgets. No QE." Commodities were demolished late on with Gold, Silver and Copper all falling down 5% on the week and while Oil managed to hold its 'Iran-risk' premia, even that started to leak lower as everyone derisked as 'market-saving-interventions' seemed obviously impotent. Financials, rightfully so, were hardest hit with the majors seriously lower (and wider in CDS) from the open. Equities which remain rich to credit markets on a medium-term basis, underperformed broad risk assets as some late-day covering pulled TSYs off their low yields of the day and gold/silver managed to pull back a little.
ES (the e-mini S&P 500 futures contract) sits at key support/resistance from the bailout rampfest of 11/30's overnight session. The blue and yellow shaded bars show large (professional) and small (amateur) average trade size (courtesy of Barry at emini-watch) and it appeared the professionals were selling into the late-day covering.
Financials managed a very late day pull off their lows but overall were hard down close-to-close and even worse from open to close today with for instance Morgan Stanley -7.5% from 0931ET.
Implied correlation (a simplified way to think about the demand for macro index protection relative to the cost of protecting the underlying index components) broke to new contract highs for the period that covers next year. With Bernanke seemingly leaving Europe to fend for itself for now, the bid for protection was significant and this crash risk indicator just keeps on rising for 2012.
In credit markets IG underperformed as we initially sold off (which makes sense as it stood so rich (tight) to its fair-value - or overly bullishly positioned) but by the close broadly speaking equity and credit had stayed in sync and ended at pretty much their worst levels of the day.
Commodities bid bounce a little right at the close on some covering we assume but ended very close to the lows.
Broadly speaking risk assets outperformed relative to the S&P 500 and credit markets but we note the strong sync between the S&P, Vol, interest rates, and high yield credit as the 'SPY Arb' model stayed very close all day (which we have not seen too frequently as HYG has seen its mysterious technical flow bid). This is the kind of HYG move that could well lead to forced selling from the ETF creators into an already supremely illiquid scondary HY bond market. This is concerning and we should closely watch shares outstanding for HYG for clues.
More from Peter Tchir:
Pretty much everything the rally up to and following the summit was based on is falling apart.
So far, No downgrades, but I suspect that is one of the few things that will change to a YES downgrades.
So far we still have what qualifies for peace in the mideast, but that does seem to be detiorating as well.
If a song is going to get stuck in my head, that is one of the better ones.
If you really feel the need to be long, for the Santa rally or whatever reason, I have never felt so strongly about the need for short term puts. SPX is down 2% from the highs today. With the lack of liquidity, overly bullish positioning (IG17 is about 6 bps rich) and the soon to be obvious failure of the latest summit, I could see a flash crash or a very fast, ugly brutal move of 5% or more.
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Asian session should be fun.
That fucking Greek auction December 19 will be fun to watch.
Don Coxe on Europe...
http://goldandsilverlinings.com/?p=1788
Euro is getting crushed along with everything else today. Today was all about the Euro. We are all currency traders now, like it or not.
The dollar is on an absolute tear against everything. This will provide Ben's justification for QE, cannot let the $ get too strong.
C'mon Tyler, don't be so negative. I can name globally coordinated government idiocy just to start. Globally cordinated incompetence and corruption clearly visible as well.
YEAH! THOSE ASIAN GAMBLERS ARE GOING TO HAVE A FIELDDAY IN A FEW HOURS!!
BANG THY HO BRO!
its just the fucking algos, the spx broke a support level. maybe a big fish knows something and the guppies are just following him. who the fuck knows
well at least...
well....
LET'S END THIS TURKEY!!!
A bit misleading....the DOW has been sitting right about HERE since 2010!
And going further back than that, is around a 25 year avg level. Big deal!
S&P breaks out the downgrade hat this week it is going to be on!
Bernake put gone in a day.
They just need some serious justification for QE3. With unemployment at 8.6, yes this figure is crap but the Bernank believes it like the christmas ghost, there cant be a qe. So now they need to crush the market to 1050 on ES by Feb or March and he can do it right in time for the saviors election. Winning
And that will do what? Put the new floor on oil at $115, and gold to $2,100, and further piss off any american with half a brain by doing incredibly unpopular QE, which people identify as handing free money to the rich bankers, to support the Messiahs second corronation? How?
Makes no sense.
"... I could see a flash crash or a very fast, ugly brutal move of 5% or more."
Very fast, ugly, brutal move... UMMM.
The next rumor better be a Whopper!!!
"Commodities were demolished late..."
Not all commodities, OIL and GAS up almost 2%. Another "tell" for war?
Translation: No happy ending.
Once 1170-1180 is broken hello triple digits fast.
Why would we need more QE in the USSA when our TOTUS is crowing about BLS data showing falling unemployment? I fully expect the BLS to report gradually lower unemployment numbers even though informed people know HOW they calculate their BOGUS information. Announcing another massive QE program might stoke widespread fear. I suspect a major QE program would be politically unpopular in Washington right now.
QE in an election year for an already very unpopular president, would be about as popular as a group of whores sitting down in the middle of Sunday mass and farting 'Bad to the Bone' in unison.
Yea...But whenever I mention things like QE...The Federal Reserve...Gold...Negative Real Rates, Inflation/Deflation etc to my friends and family...Their eyes start glossing over...Most people have no clue or perhaps a very small crumb of it...I have long since given up explaining things and yelling at the wall...
I don't think people's first reaction would be fear...Maybe here but not on 'the outside'.....
Let's all be honest...To have a clue means you have been thinking about these issues for years...And now there's no time left!!!
Yea, some family members of mine also used to roll their eyes whenever I was warning them about QE, the FED, the coming collapse...warning them to be careful and watch their money....well now theyre all bankrupt and unemployed.
Don't see how Obama gets re-election without some sort of massive printing and/or a big 'Jingoism' fighting 'The Arabs'...Either way, shit flows downhill quick, fast, and in a hurry..........
I don't think the Fed cares about a Popularity Contest...Hell...they don't even know who their 'loaning' money to anymore...Talk about the end of days...............
Well who says Obama DOES get re-elected? Hell we'll likely be lobbing nukes back and forth long before then anyway. Whats all this obsession over the focal point of the earth supposedly being election of this IDIOT Obama? WTF are they going to do about his all time low approval ratings....hand money to rich banksters? How does THAT get him popular?
The only realistic opponent Obama has is RP...Lots of positive chatter here in Iowa (for once on MSM) about him on local NPR and all that...I suppose we'll see whether the 'string pullers' want Obama or not...
As bad as Obama is...Gingy and Romney are worse...IMO...Maybe the PTB throw in Gen. Petraeus and the occupation gets up early!
at least yours had the decency to go bankrupt. Mine are doing okay and like to point out the rising dollar and falling silver prices as their way of politely laughing in my face as they say "what more harm would more qe really do?"
I don't believe a 'QE' is as far off as some would think...Besides...What would anybody do about it...The markets would go up...Commods would go up...Mix that in with some 'budget cut bullshit' travelling out to 2020...the MSM declare all is fixed...Meanwhile, more legislation is passed in the middle of a rainy night concerning less civil rights etc...Keep Zombie TV rolling and vuala!!!!
Just wait for a something that resembles a hard crash in the markets and see how political sentiment for QE will change. I think that one of the common themes on ZH on the matter is deflation first, inflation to hell after.
My little paranoid conspiracy theory over this is that the crash will to some extent be engineered/amplified by the actions of CBs and TBTFs in order to make even the last skeptic beg for QE. You simply cannot survive deflation at current debt levels. And by debt levels, I don't mean the tiny by comparison national debts. The TBTFs are tangled in a huge derivatives bomb right now, that's what they are trying to deal with, and there is no way out of the wonderful and magical counterparty risk world they live in, but massive amounts of liquidity. That where the whole game lies in my opinion. As far as the stock markets is concerned, it is very small part of the entire system and also for many the only visible part of the system. commodity markets even less so. A useful tool for scaring the crap out of everyone, but they don't realy care much about it.
I doubt you read this but you are correct sir...There's no way out for the Banksters accept print...If at all...I hope a crash comes and I can buy GE for $3.00 or Silver Wheaton at a $1.50
Today proved that the crack junkies were expecting some crack, and the dealer snubbed them. The banker junkies are jonesing bad in their bed right now...
Really, EVERYthing had to go "right", with no hiccups, for the pretend we're doing something policies from Europe to continue to muddle along. The combination of MFGlobal impacts (nope, most of that money is not coming back), no solutions to the debt saturation while all planning is for continued liquidity and access to credit markets, slowing and recessionary economies in Europe, Best Buy can't sell products (I wrote how I'd been to local NorCal Best Buy two times a week ago and there was plenty of up front parking and no line to purchase goods - weird at time but today supports that not uncommon), more people not working, houses continue to lose value . . . well really - no matter how "cheap" valuations are touted to be, there is no reason to think there will be any fundamental improvement. And the idiocy around 1212 elections only exacerbates this slow motion car crash. I'm just hoping the airbags work really well.
The bis has already said that the LTAP programs were major fade the 2nd go around for precisely the expectations hypothesis
http://www.bis.org/publ/qtrpdf/r_qt1112.htm
that's all well and good, but how come with risk assets getting hood stomped today, why is VIX down???
Just float another QE3 rumor on open tomorrow...another qualude and the market gonna love us again!
That would make a great short again.
The cartel controls so much paper gold and silver they can easily synchronize these prices with the rest of the equities and commodities markets. Some day, these prices we decouple, but I'll probably be dead by then.
Someday is close, according to FOFOA's latest post.
Good one, yes. Rambling a bit, as always.
Perhaps, but it would take time, and while fofoa understands currencies, he neglects lending rates - they have a psycological role.
Good Lord, that man gets more insulting by the day. First, I can't understand anything because I "live on the wrong side of the Atlantic," and now I can't understand anything because I "read ZH and don't believe in fractional-reserve banks and fiat currency."
Meanwhile what he points out is my fundamental flaw is actually his, IMO.
Look, if I believe that fiat is a fundamental flaw (which I do), then that completely invalidates anything to do with his idea of it serving in primary/secondary monetary roles, as there is nothing rational to build a system upon. I've read all of Another, all of FOA, and quite a bit of FOFOA, and nowhere do they ever present a coherent model of how the Euro and Freegold can work together as primary and secondary forms of money, as they fail to project the working of the system over time.
If the Euro is for spending and Freegold is for saving, with a floating exchange rate between the two (because as we all know, Euro gold is periodically marked-to-market), how are contracts over time valued fairly? If I'm paid in ever depreciating Euros (just not hyper-depreciating, right?), will a lender give me a loan in Euros, guaranteeing them a loss, or will it be denominated in units of Freegold, guaranteeing my loan payments rise indefinitely?
Either way, someone is losing (creditor or debtor), while someone else wins who should not (the Euro printer).
That this system is championed by smart people is suspect. That it is championed by smart people who have to resort to name-calling (or the idiocy above in comparing theses by quoting f'ing Pogo! (can anyone explain what that accomplished?)) is beyond reproach.
I do not doubt the idea of a Freegold standard. Tie it to the Euro though, and it's nothing more than the next tool of enslavement. Banker notes are simply not money, but an IOU for money that they're liable for. That the two have been confused is the fundamental flaw, not this silliness as proposed by FOFOA, who I trust less and less as time goes on. He's obviously carrying water for someone, otherwise character assassination wouldn't be his primary tool of reason.
Rest assured it is fofoa who has no understanding of money. You have hit the main argument against his idea of spending fiat and saving gold. His view of the euro as a planned intermediate step is delusional. It is either fixed in price or floats but to say that people will think in ounces when they save and currency units when they spend is silly.
And to say people will happily accept rapidly devaluing currencies without creating severe distortions in consumption and financial planning is silly.
If the gold currency competes freely with the euro that would be great, but europran gold reserves cant back the euro, maintain confidence in the euro and compete with it at the same time. If it backs the euro it is not freegold. If it doesnt back the euro we have the system we have now, a floating exchange rate. Adding gold as a legal currency floating against the euro gives us competing currencies, but there will always be a ratio between them, and if the euro devalued too fast then we have the same problems we have always had, not some fancy new system.
...or alternatively, what you are describing is not what is discussed by FOFOA because you don't know what you are talking about.
Good thing dollars aren't "ever depreciating," because then lenders would be "guaranteed a loss" and they would never lend, right?
But more to the point, why make such silly claims about "ever depreciating Euros" unless you hadn't read FOFOA? He actually talks about something different - stability! Actually, its clear you haven't read FOFOA because you write stuff like:
I do not doubt the idea of a Freegold standard. Tie it to the Euro though, and it's nothing more than the next tool of enslavement.
Tie it to the Euro? What are you talking about? Freegold is coming, Euro or not. Its more a market reaction to the dollar reserve system. The Euro was built for Freegold in the hope and expectation it could survive the dollar's collapse and find its way into Freegold in a substantially similar form (aka without hyperinflating). Think of the Euro as the currency that embraced being gold's b!tch, as opposed to the great con of the gold standard, where all those states hoisted the great fallacy that their fiat currencies were as good as gold. SPOILER ALERT: it became apparent their fiat currencies weren't as good as gold.
An Honest Money that does not purport to be something it is not - its just a medium of exchange.
Menger: [I]t appears to me to be just as certain that the functions of being a "measure of value" and a "store of value" must not be attributed to money as such, since these functions are of a merely accidental nature and are not an essential part of the concept of money.
Mises: Money is a medium of exchange. It is the most marketable good which people acquire because they want to offer it in later acts of interpersonal exchange. Money is the thing which serves as the generally accepted and commonly used medium of exchange. This is its only function. All the other functions which people ascribe to money are merely particular aspects of its primary and sole function, that of a medium of exchange.
Retail sales figures today combined with Best Buy's report were big eye openers: there was no November retail sales surge. And retail margins are scary thin 6.1% for Best Buy which is worse than 99-Cent Stores at 8.7%).
Gold and treasuries are saying that deflaton is gaining the upper hand again. The 4% plunge in household net worth for Q3 with decining real incomes (and hourly wages as per last NFP) and declining housing are a guarantee for demand destruction.
Despite deflation this Fed, which has always said it would ease to fight any whiff of deflation, is standing pat. Biflation makes it much harder for the Fed to print because under the hood is extreme price sensitivity to loose money, as we saw in April. And global CPIs and PPIs reported this week are still stubbornly high, including Germany, UK, and here in the US
Yea and recall on Black Friday all the media whores gushing in their seats about the RECORD BUSTING sales and all that nonsense...they have no shame.
Turned out it was all lies. For 3 decades they shopped. Until the dropped.
Exactly. Media spoon feeds the public.
'Spoon feeds'? More like lies, misleads and manipulates the public.
Bankers cannot be trusted - Dick Bove
I couldn't stop laughing.
This is quite a reversal from the banks biggest cheerleader. It seems Bove is trying hard to remain relevant.
Putting our trust in a society that has created a system of wealth based on paper and rocks is our mistake. Wealth is a means of taxation. Taxation is a means of control for governments. Paper and rocks can not save you. Trust in your goverment can not save you. The police can not save you, they can only clean up the mess. Help put the odds in your favor and arm yourselves.
Looking at the markets today, I almost feel like I'm at the blackjack table, and I got dealt a 19 and the dealer, showing a Deuce, is slowly getting 3, 2, 3, 3, 2....etc.
You know the dirty 2,3,A=21 is coming.
What I feel like Im watching is me sitting at the table with a 21 and a $100,000 bet, and the dealer has 2 kings, but keeps on refusing to put up or shut up.
Very funny headline.
Another prediction of mine has come true:
English Butlers Wanted For Super-Rich Clients
http://www.bloomberg.com/news/2011-12-13/english-butlers-wanted-for-emer...
They'll need footmen, valets and stable boys too!
'For super rich Chinese and Russians'.....wait....I thought we had them ground down to poverty and helplessness?
Nah! Now we want them to "pull us out of depression" by hiring Americans as servants. Starched white collars will be "in"
Nah! Hell americans are slobs....they want a 'Jeevsey' English type. Back 150 years ago they'd train their kinds to 'butle' from little kids, it was a family profession. Hell these days you cant get an american kid to make his own pop tart, much less dress in a tuxedo every day.
Right! They'll hire Americans as entertainers. The kind of entertainment you feed to other forms of entertainment, for the entertainment value
ha!
Who was it that laughed at my open-for-one-month gold@1630 order, last week? "We'll never see the 1600's again". Bwahahahaha!
Priced in what, fiat US Dollars? I dont pay too much attention to that myself.
It wasn't me (I never predict price), but I have to ask, don't you mean a paper-gold order?
See Celente for details...
" No ECB. No IMF. No Fed. No PSI. No balanced budgets. No QE."
From WWII:
"We're the battling bastards of Bataan. No mama, no papa, no Uncle Sam."
Why is the VIX down today..?
If Gold falls another 10-20%...You won't be able to get it....That goes double for silver...My local coin shop only has a handful of Pre-33's for sale in vf-xf etc. for like $1800-something...Nobody is going to sell cheap if everything tanks again!!!
Premiums will have to increase in order to take up the slack (if a market is to be maintained).
I don't watch much, but I've yet to see Eagles below $40 on ebay, for instance.
www.24hgold.com/english/buy_sell_silver_coins.aspx?co_id=0
Even Tulving is upped premiums on gold Eagles to $67 (while paying $48).
NA...If I remember back in fall 08'....Ag fell to like $10 but you coulden't buy for less than 13-$14...Au fell to the high 600s low 700's but nobody had any under $800 or so...I would expect the same this time around...
Except for rare brief disruptions i never had any problem from golddealer.com and they had the best margins in the business except for tulving.
Sold it all in low 1300's but had been buying from golddealer.com since 1999. I had no problem in 2007 or 2008.
Most of you guys are getting ripped off in premiums if you are dealing elsewhere. Granted i havent checked premiums since 2010. Gonna go check right now. No way you should pay 40 for a SAE.
Addendum. SAE spot plus 3.10. Their premium has gone up about a dollar through the years.
GAE. fifty dollar spread between buy and sell price. Less rhan ten percent premium to spot for their sell price.
They never sold GAE at 800 bucks when gold was 600 or 700. Price has never decoupled from paper and it has always been available.
Thanx TCT...I was at multiple coin shows right at the bottom in 08...Nobody was selling 'cheap' (ie...anywhere near spot)...Never payed more than $4 or so above spot for ASE's or maples since 08...Gold was a different story...Coulden't get anything at those prices...Always at or around $800 or so...I think this time around will be a warm up to last time...Don't see to many sales if things tank again...Call it Pavlovian if you like...A true decoupling will eventually take place...I will check out CNI...Thanx
The FED won't print until oil drops below say 70 give and take. Problem is China is crashing (commodities) whilst the oil price is bid. That is bad, real bad.
So, equities will be sell till the print job. And that may not happen for a little while. Europe will completely implode in 2012. That is when the ECB may go bananas. But even then, it may not have much effect. Watching for more extreme volatility going into end year and into next.
Again swing trade the tops, index futures minis etc
Trying to get blood out of dried up and rotten corpse
--IMF says Greek budget deficit, growth forecasts worse than government forecasts
--Athens must focus on cutting expenditures as little more can be squeezed from taxes, IMF says
--Further reforms will likely be required as officials negotiate a second bailout program
I wouldn't want to be in Greece in 2012.
Thoughts on oil? I know the typical thought is "Peak oil and war will cause oil to surge," but I am starting to think that unless there is war very soon, oil is going to absolutely implode. Gasoline demand in the US is down consistently 4-5% YOY every week. Heating oil demand is expected to drop sharply this winter. China is stalling, India has stalled, Europe is probably already in recession with the US soon to follow. Crude inventories in the US have been rising or at a minimum staying level so far after Thanksgiving, a time of year when inventories usually plummet due to drawdowns for tax reasons.
Obviously the risk of war is very real, but at the end of the day........if demand plummets, the price will come down and could do so very quickly again (like 2008). With all other risk seemingly selling off....unless oil is to commodities what the US is to world economies <sarc>, I am not sure how it can decouple, short of war. At this point, it seems it comes down to long oil = expecting major war, short oil = not expecting major war.
Thoughts?
With all that's unfixable at this time, there's no way war won't arrive to save the day.
Lower oil prices, higher inventories, make war an easier sell. Making war an easier sell, could discourage announced QEmore.
Agreed...War is all but here...Throw in Pentagon DOD budget cut threats to boot...lots of money in Raytheon, Micky D (the other one), Lockhead and friends...No way they take a profit pinch in a money free-for-all-print-a-thon environment like this...Common sense meets economics...
LOL. the global coordination of lies isn't working out too well. The smell from the rotting debt is starting to stink. French and German perfum isn't working anymore
The EU will ultimately come up with something...Unlike the US, Europa has way too many diverse cultures and most importantly, Media POV's that make it difficult to obfuscate the truth...here in the US...you could Project Blue Beam an alien invasion and people would freak out...Why? because the air/sound waves are all mono owned point blank
Wishful thinking re. Europa. They are just as dumbed down as anybody else these days.
i want to punch the guy who created the saying" may you live in interesting times" in the nose, i havent even built my dungeon yet, chains are going to get expensive, grrrrrrr.
Surfing
So, you have an array of event horizons coming out of the multiplexer, like a head picking from a data bus. The system programs you to time into a slot /event horizon (cookie cutter), every time around, based on conditions, like needing a shower in the morning, which will result in anxiety if you don’t get it. The point of being homeless, without employing the social service regime, and relying on the kindness of strangers (little left), is to wipe that stack of conditions clean, so you may enter any event horizon at will.
But, you will need the necessary accoutrements to build each rung. Employ algebraic reduction across the event horizons in parallel as you go, because several event horizons will have common conditions, like clothing for example. Pick up the clothing you need to enter the event horizon you want, when you get into the new town and see which event horizons are new to you. The objective of the system is to slow and stop you at the programmed queue, so you have to practice ignoring or recalculating your inner voice.
The external world is an aggregated perception of individual internal worlds. Your brain fishes with a funnel, the strength of which is determined by matching conditions. Time is a function of attitude. Be determined to fight the required conditions within an event horizon and time will race past you. Let the event horizon “think” you are stupid and you will have much more time than required to build the rung.
Once you have all the rungs, scamper up and pull the ladder up with you, to re-accelerate time within the now shorted event horizons. That is what the bankers are feeling, time accelerating beyond their control, increasingly as they attempt to re-establish historical control. They can’t see the new event horizon, which automatically catalyzes changes in the remainder to neutralize the neutral line, due to environmental control. Their attitude sets the high/low resonance, VIX.
Re-start as many times as necessary to catch the wave. Learn as much as you can from each failure.
"Microsoft co-founder Paul Allen made the latest step Tuesday, unveiling plans for a new commercial spaceship that, instead of blasting off a launch pad, would be carried high into the atmosphere by the widest plane ever built before it fires its rockets.” Crack me up.
I wonder when we're going to see those S&P downgrades come across the tape? Friday afternoon after US trading closes?
volume-less HFTs are running yr end market.
frightening.
await the 1.30 EUR handle blowout. should panic the machines
It's all about the Euro now..stocks are joined to that ball and chain and it's sinking fast. You see the Banks are forced to sell stuff (stocks, bonds, commodity contracts) to raise cash from declining asset values. Deleveraging if you will.
I'm watching the vix here.. it's sitting like a coiled spring ready to move @25. Mkts are VERY complacent right now.. so we could see some big moves coming shortly. The EU is coming apart and there is no fear!! Incredible.
As a gauge I am looking to cover my short positions with a vix around 85. However long it takes .
low liquidity + HFTs support + S&P soon downgrade news (EZ) = sell
oh and Asia buying up tons of USDs and selling their currency. Means? Asia/China are panicking
market is far too tight...ranges on everything, doesn't look healthy esp on no volumes.
something is up.
spare the algo ... spoil the market