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Goldman Skewers Muppets Again: Worst Week For Stocks, Best for Long End Bonds

Tyler Durden's picture




 

While stocks staged an 'interesting' recovery this afternoon, it was not enough to save them from a fate-worse-than-death - a red-weekly-close! The only (and therefore) largest drop in the S&P 500 of the year (after GS long stocks call) was dominated (beta-adjusted) by the largest 30Y Treasury yield improvement of the year (after GS said get short Treasury futures). It seemed we reverted to good-is-good, but bad-is-better trading this afternoon, as dismal global macro data spurred a surge in commodities, rally in stocks (carried by the QE-high-beta faves Energy/Materials/Financials but not Industrials notably), compression in Treasury yields, a drop in the USD as QE-hope was back on (and Lockhart helped a little in the last hour with some punchbowl temptations). Futures volume was below average but not dramatic though cash (NYSE) volumes were on the weaker side. The small drop in the USD was dwarfed by the pop in commodities as Silver outperformed but only Gold managed to get back into the green for the week. Oil popped $2-3 around the US open but remains down on the week. Treasuries are 15-20bps lower in yield from their Tuesday highs and 2s10s30s has dropped modestly on the week. AUD reverted from yesterday's late lows and rallied (mildly supportive of the equity move) but JPY kept on rallying (with a small selloff this afternoon) leaving the USD (DXY) in that same very narrow range for the week ending the week down 0.55%. Broadly speaking risk assets did not participate as positively as stocks this afternoon as HY (and HYG) underperformed stocks once again though VIX managed to end under 15% again as the TVIX compressed back down close to its NAV and VXX closed at new lows as the term-structure flattened a little more. Oh yeah, and BATS and AAPL flash-crashed...

 

The ES (S&P 500 e-mini futures contract) rallied right up to the last minute today - successfully closing the day-session gap (which had been closed overnight in light volume) from Wednesday (h/t Andy Y)...


Stocks (blue line) managed a decent recovery today off pre-open lows which dragged HY higher (and HYG) but into the close HYG gave up its gains in a hurry. Investment grade spreads leaked wider - which is fair given how incredibly rich they were/are to fair-value but in general it is outperforming. Overall, Credit and equity is down for the week - though IG outperformed.

Forget the EUR (for a second - as CFTC data shows its smallest net short position since Nov 15) - even though it trades a little rich here based on our EUR-USD swap-spread model of around 1.30 (now at its richest in 5 months) - this week saw the volatility in AUD and JPY pairs with AUD recovering some of its losses today but JPY continuing on its dark path higher. DXY (USD) stayed in a relatively narrow range all week - but closed near its lows...

Treasuries were the talk of the town as they went from most hated and hyper-inflation is here to most-loved and safety-feels-good. A 15-20bps or so compression off Tuesday's peak yields was impressive and left the longer-end with its best week of the year in yield terms...


Gold outperformed on the week as Commodities overall staged a valiant attempt today to get back into the green on USD weakness this week. Oil's pop and Silver's high-beta efforts were strong today...

 

VIX had its largest up week in six weeks but managed to close down aggressively today as the whole vol complex remains mired in technicals from the TVIX debacle.

Overall, stocks tried to push up to the bottom of their up-trendline and heavier volume and larger average trade size came in at the close more on the selling side (whether covering intraday longs or fading the bounce is unclear - though we suspect the gap-fill signals fading the rally). Credit remains notably weaker (than stocks) on a medium-term basis and while short-term vol keeps saying all-is-well, the term structure remains steep (though gave some back this week - removing some short-squeeze ammo). Whether today's follow-on from the European close was due to the actions of the ECB during the morning or simply more hope for QE off terrible data is unclear but the defection strategy must be getting more optimal as without equities taking a tumble - even with data missing - it seems a pretty hard sell-job by Bernanke et al. to push through QE3 sooner rather than later. Perhaps the next NFP is being set up for a big miss and the proceeding cliff-dive is just the indication they need?

Charts: Bloomberg

 

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Fri, 03/23/2012 - 16:33 | 2284897 kito
kito's picture

poor jim henson, his wonderful creations becoming associated with goldman sachs....................

Fri, 03/23/2012 - 16:49 | 2284957 Rat King
Rat King's picture

A lot of Goldman Sachs clients are now asking themselves the tough question: "Am I a man or a muppet?"  http://www.youtube.com/watch?v=2MFn8L9tIrg&feature=fvwrel

Fri, 03/23/2012 - 19:07 | 2285454 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Muppet massacre!! 

Sat, 03/24/2012 - 02:53 | 2286137 amadeusb4
amadeusb4's picture

More specifically now: http://www.youtube.com/watch?v=oPOmbEpIO7c

 

Fri, 03/23/2012 - 16:44 | 2284963 Contra_Man
Contra_Man's picture

Estate of JH apparently is a client... just say'in

Fri, 03/23/2012 - 17:09 | 2285047 Silver Bug
Silver Bug's picture

Never listen to Goldman, that is my motto.

 

http://ericsprott.blogspot.ca/

Fri, 03/23/2012 - 17:35 | 2285118 slaughterer
slaughterer's picture

"Magnetism" of EOQ window dressing coming up.   Last Q earnings were weak.  1Q is the time to make up for past performance. 

Fri, 03/23/2012 - 16:33 | 2284898 Atomizer
Atomizer's picture

LMFAO, love the tittle. Goldman Skewers Muppets Again

 

Fri, 03/23/2012 - 16:33 | 2284902 SolidSnake961
SolidSnake961's picture

Goldman buy= you should sell

whoever listens to GS deserves to lose their money

Fri, 03/23/2012 - 16:34 | 2284904 TradingJoe
TradingJoe's picture

I still wonder why the muppets are taking it so calmly?!? Must be some kind of drug! I would have pulled my dough out of there a long time ago! I guess they deserve it, eh?!

Fri, 03/23/2012 - 16:35 | 2284909 Zeff
Zeff's picture

If someone lost their shirt going long on GS's call this week, they either need to find another job or just die for being even dumber than Muppets.

Fri, 03/23/2012 - 16:41 | 2284912 Pretorian
Pretorian's picture

Are you ready to believe that Goldman together with other syndicate banks are deciding how the chart will look next week , next month! Who else has FED unlimted bag of no interest loans to speculate the market. Wake up even Secretary of Treasury former Goldy, whats wrong with the world.

 

Fri, 03/23/2012 - 16:37 | 2284924 Outlaw Of The W...
Outlaw Of The Wasteland's picture

Hitler was right:

"We were not foolish enough to try to make a currency coverage of gold of which we had none, but for every (new reich´s) mark that was issued interest free [non usury system], we required the equivalent of a mark's worth of work done or goods produced. . . .we laugh at the time our national financiers held the view that the value of a currency is regulated by the gold and securities lying in the vaults of a state bank." -Adolf Hitler, 1937 (CC Veith, Citadels of Chaos, Meador, 1949.)
   
"And it proved sound. It worked. In less than ten years Germany became easily the most powerful state in Europe. It worked so magically and magnificently that it sounded the death knell of the entire (Zionist) Jewish money system. World Jewry knew that they had to destroy Hitler's system, by whatever means might prove necessary, or their own [system of usury] would necessarily die. And if it died, with it must die their dream and their hope of making themselves masters of the world. The primary issue over which World War II was fought was to determine which moneysystem was to survive. At bottom it was not a war between Germany and the so-called allies. Primarily it was war to the death between Germany and the International Money Power." -  William Gayley SImpson

Fri, 03/23/2012 - 16:44 | 2284958 kito
kito's picture

right. the war had nothing to do with a fascist lunatic trying to create a barbie doll race, rolling into every european country with the idea of creating barbieland..........noooooo, he had to be stopped because he was good and had an honest idea about money..................ok................

Fri, 03/23/2012 - 16:52 | 2284991 francis_sawyer
francis_sawyer's picture

 "the war had nothing to do with a fascist lunatic trying to create a barbie doll race, rolling into every european country with the idea of creating barbieland"

~~~

facist lunatics [last 2 & prolly next POTUS] , trying to create a barbie doll race [zionist democracy], rolling into [insert ME country with gold & oil here], with the idea of [serving their masters]...

Hmmm... let me think about that one & I'll get back to you at halftime of the basketball game...

Fri, 03/23/2012 - 16:59 | 2285025 kito
kito's picture

two wrongs dont make a right..........

Fri, 03/23/2012 - 18:23 | 2285318 francis_sawyer
francis_sawyer's picture

Well I'm sure that kito 2100 will be along in a century to remind us all that (with regards to the current crop):

"he had to be stopped because he was good and had an honest idea about money"

 

Fri, 03/23/2012 - 19:23 | 2285501 kito
kito's picture

yes 2100 will be along in a century, last i checked my calendar and math.......

Fri, 03/23/2012 - 21:25 | 2285738 smiler03
smiler03's picture

Uh oh, somebody mentioned Hitler. It's surprising it doesn't happen more often here on ZH, see Godwin's Law.

http://en.wikipedia.org/wiki/Godwin's_law

Fri, 03/23/2012 - 22:13 | 2285809 kito
kito's picture

funny, i let myself get baited into it..shame on me..........from now on i will only respond to threads on mussolini......

Fri, 03/23/2012 - 18:37 | 2285330 Randall Cabot
Randall Cabot's picture

Poland was invited to join Germany, Italy and Japan in the Anti-Comintern Pact but declined.

England and France declared war on and commenced hostilities against Germany, not the other way around.

The Soviet Union invaded both Poland and Finland but that was ok by England and France, and later America.

Fri, 03/23/2012 - 21:20 | 2285729 smiler03
smiler03's picture

Simplification to put it mildly. Waste of space.

Sun, 03/25/2012 - 22:37 | 2289827 dannyboy
dannyboy's picture

/facepalm Peoples lack of history knowledge on this site is fucking scary.

Fri, 03/23/2012 - 17:02 | 2285033 ParkAveFlasher
ParkAveFlasher's picture

right. the war had nothing to do with a fascist terrorist lunatic trying to create a barbie doll race Islamic empire, rolling into suicide bombing every european country with the idea of creating barbieland Islamo-anarchy..........noooooo, he had to be stopped because he was good and had an honest idea about money this part I won't change..................ok................

fixed - and -

I would add that sound currency wasn't Hitler's idea, but he did usurp an economy made whole by it.  The reichsmark was in place for 15 years before Hitler unleashed the Blitzkrieg.

Let's not forget that Hitler's "war machine" was quite literally tooled during the hyperinflation of the early 20's by Germany's native industrialists because capital expenditure was preferable to sitting on piles of worthless cash.  Hitler was a regional sideshow in a very big national carnival back then (perhaps reaching out tmostly to defeated and disenfranchised youth of oh maybe college age who would later swell the Nazi ranks).

Not saying the many WASN'T a fascist maniac, and a murderer, clearly he was.

 

Fri, 03/23/2012 - 16:51 | 2284990 kito
kito's picture

hitler admired keynes....enough said..........and he was a central planning dictator............spare me the heroic talk of hitlers monetary prowess.....

 

http://www.lewrockwell.com/rockwell/hitlers-economics.html

Fri, 03/23/2012 - 17:34 | 2285116 Savyindallas
Savyindallas's picture

Hitler definitely had some good ideas. The Bush crime family thought so  -they helped fund him. Hitler was also Times's 1932 man of the year.

Fri, 03/23/2012 - 17:49 | 2285182 blunderdog
blunderdog's picture

Hitler deserves as much credit for saving the German economy as Obama does for bringing the stock indexes back from May '09 levels.

Schact's rolling over in his grave.

(BTW: I'm pretty sure outlaw-baby's a troll to discredit the site.)

Fri, 03/23/2012 - 16:37 | 2284925 Atomizer
Fri, 03/23/2012 - 21:37 | 2285746 smiler03
smiler03's picture

I tried to make a point about this earlier...

Moron put's up a youtube link with no clue about what it's for...

In this case it is about Kermit The Frog moaning about it being difficult being green.

So Atomizer, why the fuck didn't you say that? What relevance does it have at all?

ASSHOLE

Sat, 03/24/2012 - 01:05 | 2286036 Atomizer
Atomizer's picture

Yes, I'm a Asshole. Proudly accept your badge of honor. 

Kermit is a muppet who was tricked into going long. Kermit is walking thru the folage wondering why he listened to the count (GS) and didn't chose the other color.

See how easy that was? With all due respect, please give me another asshole round on your debt card. ;)

Sun, 03/25/2012 - 00:47 | 2287881 blunderdog
blunderdog's picture

I was just way tempted to indulge personal hatred.  Bravo, Atomizer. 

I haven't managed to get a drink with that asshole card, yet, but I don't spend any time at gay bars.

Fri, 03/23/2012 - 16:37 | 2284927 Scalaris
Scalaris's picture

I don't understand; is it possible that Goldman would misdirect us?

I feel used.

Fri, 03/23/2012 - 16:41 | 2284941 francis_sawyer
francis_sawyer's picture

(2:50)

Vesper: "How was your lamb?"

James Bond" "Skewered"

http://www.youtube.com/watch?v=NLFLuPQhe5w

Fri, 03/23/2012 - 16:43 | 2284953 HyperLazy
HyperLazy's picture

I have a suspicion XIV will be the next VIX related bubble.

Quick - run to the other side of the boat!

Fri, 03/23/2012 - 16:53 | 2285002 ZeroPower
ZeroPower's picture

XIV is not leveraged so chances are it'll achieve (albeit poorly) synthetic (inverse) tracking of the Vix. Anyone who partakes in the leveraged flavors of vol products however.... I lol at you. 

Fri, 03/23/2012 - 18:57 | 2285428 Sam Clemons
Sam Clemons's picture

XIV looks like a good short.  Only a year in and already a 33% tracking error.

Fri, 03/23/2012 - 16:50 | 2284986 ChiefJohnRutledge
ChiefJohnRutledge's picture

Don't forget this was the week that Biggs talked about being 90% long stocks. That made it easy to lay out some shorts.

Fri, 03/23/2012 - 16:52 | 2284993 wonderatitall
wonderatitall's picture

...but cnbc just wrote that now the average "investor" is getting back in....now is the time to buy a house ... and obamakony is a great something or other...lets all join in

Fri, 03/23/2012 - 16:52 | 2285000 qussl3
qussl3's picture

Is it just me or does Lloyd look like gargamel?

Gargamel's laugh would be apropos now.

Fri, 03/23/2012 - 16:55 | 2285009 ZeroPower
ZeroPower's picture

Nobody posting about backing up the truck with TVIX anymore? Hmmm. Expensive lesson learned.

Fri, 03/23/2012 - 16:58 | 2285021 TradingJoe
TradingJoe's picture

I'll let you know so you can front run me :)))!

Fri, 03/23/2012 - 16:58 | 2285018 TradingJoe
TradingJoe's picture

It's weekend boys and "girls", let's leave this drivel for Monday, eh?!

Fri, 03/23/2012 - 17:20 | 2285081 Wakanda
Wakanda's picture

Skewered and roasted muppets. 

It's what's for dinner.

Fri, 03/23/2012 - 17:34 | 2285117 streetcrawler
streetcrawler's picture

Extremely low volume indicates a reversal in trend right?

Fri, 03/23/2012 - 18:41 | 2285382 printmemoney
printmemoney's picture

Goldman s clients are probably pension funds. Dont worry just up the expected rate of return to 15%.

Fri, 03/23/2012 - 19:12 | 2285477 Sequitur
Sequitur's picture

Muppets. Lol. This phrase is the gift that keeps on giving. It's never, ever going to get old.

Fri, 03/23/2012 - 19:23 | 2285500 slewie the pi-rat
slewie the pi-rat's picture

more QE = more twist

Fri, 03/23/2012 - 19:28 | 2285513 Troncom
Troncom's picture

Ha Ha Fozzie Bear, Fozzie Bear!

Fri, 03/23/2012 - 20:17 | 2285630 Currency is Debt
Currency is Debt's picture

The Ben Bernanke

 “In terms of debt and consumption and so on we’re still way low relative to the patterns before.”

Fri, 03/23/2012 - 20:28 | 2285647 Curt W
Curt W's picture

Anytime the people who make money from increased traffic cry at the top of their lungs BUY BUY BUY start running, it is gonna get ugly soon.

Fri, 03/23/2012 - 20:33 | 2285654 Currency is Debt
Currency is Debt's picture

 Ben Bernanke

“Bernanke, 58, also said government policies to increase homeownership were not principally to blame for the housing bubble.

“I think to put it all on the government is probably wrong,” Bernanke said in response to student questions. “Most of the worst loans were made by private sector lenders and then sold through private-sector securitizations. They didn’t touch Fannie or Freddie,” he said, referring to government-sponsored entities Fannie Mae and Freddie Mac. - They didn't touch fannie or freddie, I hope not. Please though clarify the $7trillion+ ,with new issuance, of mortgage bonds that Fannie and Freddie guarantee when the US National Debt is 15 trillion and the GDP 14 trillion.

 

“After a long period of low inflation most people are pretty comfortable that inflation will stay reasonably low,” Bernanke said. “And that helps a lot” since “with inflation staying low the Fed has more leeway.”

 

In response to a question about Fed transparency, Bernanke said “most of the time transparency can make monetary policy work better” and promote accountability of the central bank.

 

 

Fri, 03/23/2012 - 21:57 | 2285784 Confundido
Confundido's picture

Guys, its simple: As the ECB funded sov debt with euros, and these euros crowded out the US dollars that were formerly funding the same sov debt, if now the sov debt deteriorates and margin is called, the search for liquidity WILL NO LONGER BE IN USD BUT IN EUROS!!!! Hence, less pressure to sell gold and US assets, more pressure on EU stocks. Which is a circularity because now the EU private sector feels the pain directly and is even farther from being able to sustain the EU burokrats! 

So.....what will happen to those US dollars no longer needed in Europe ? They will keep bidding for assets, among them gold and oil...

Sat, 03/24/2012 - 01:17 | 2286052 qussl3
qussl3's picture

USD swap lies might have something to say about that.

Mechanism probably isn't the same but I wouldn't discount it out of hand.

Sat, 03/24/2012 - 02:59 | 2286140 GMadScientist
GMadScientist's picture

"A butterfly, which is a combination of a barbell and a bullet, is one of the most common active fixed-income strategies used by practitioners. While being neutral to small parallel shifts of the yield curve, a butterfly is purposely exposed to specific bets on particular changes of the yield curve. There exist four different types of butterflies, the cash-and duration neutral weighting butterfly, the fifty-fifty weighting regression, the regression weighting butterfly and the maturity weighting butterfly. In this paper, we show that they generate a positive pay-off when the particular flattening or steepening move of the yield curve they were structured for capturing occurs. We also argue that one suitable way to detect the opportunity to enter a specific butterfly is to use spread indicators."

Sat, 03/24/2012 - 04:45 | 2286206 Olympia
Olympia's picture

Imperialism and loansharking are perfectly identified ...identified, exactly as imperialism used to be identified with war conflicts. This is why we believe that the consequences of some “mistakes” easily reveal the “motives” of those who planned them.

In reality, there is a permanent “recycling” of the same tactics that lead to the mistake and then to disaster. The method used in the case of Greece is a version of the practice that started from the imperialistic centers to expand all over the world. Simply, in Greece, that is a “terminal”, banking illegal superprofits were produced so that loan sharks “spoil” the Greek public assets, while at the “center” of the planning banking superprofits were created so that loan sharks “spoil” the "Greeces”. Exactly the same illegal things were planned to bring profit to their loan sharking inspirators ...illegal profits.

More info about Global Debt Crisis here:

http://eamb-ydrohoos.blogspot.com/2012/01/global-debt-crisis.html

.

Sat, 03/24/2012 - 07:20 | 2286265 Paul Thomason
Paul Thomason's picture

Shift In Lunar Energy This Week To Long Term Negative 'Astro Technical Review'

Sat, 03/24/2012 - 08:31 | 2286312 rsnoble
rsnoble's picture

Don't forget this quote from GS days ago. And ill be keeping this on file for sometime:

 

http://finance.yahoo.com/blogs/breakout/goldman-sachs-best-time-generati...

Sun, 03/25/2012 - 03:34 | 2288013 Grand Supercycle
Grand Supercycle's picture

The Wile E. Coyote scenario continues...

SPX daily chart with rising wedge enclosed by substantial broadening top (aka megaphone)

http://www.zerohedge.com/news/2012-12-24/market-analysis

Sun, 03/25/2012 - 07:33 | 2288104 MFL8240
MFL8240's picture

Just as the bond market was ready to fall off the ciff along came the Federal Reserve to manipulate the way.  The games is neverending and sickening to wittness.

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