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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kito's picture

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

Rat King's picture

A lot of Goldman Sachs clients are now asking themselves the tough question: "Am I a man or a muppet?"

Contra_Man's picture

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

Silver Bug's picture

Never listen to Goldman, that is my motto.

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. 

Atomizer's picture

LMFAO, love the tittle. Goldman Skewers Muppets Again


SolidSnake961's picture

Goldman buy= you should sell

whoever listens to GS deserves to lose their money

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?!

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.

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.


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

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................

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...

kito's picture

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

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"


kito's picture

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

smiler03's picture

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

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......

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.

smiler03's picture

Simplification to put it mildly. Waste of space.

dannyboy's picture

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

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.


kito's picture

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

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.

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.)

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?


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. ;)

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.

Scalaris's picture

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

I feel used.

francis_sawyer's picture


Vesper: "How was your lamb?"

James Bond" "Skewered"

HyperLazy's picture

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

Quick - run to the other side of the boat!

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. 

Sam Clemons's picture

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

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.

wonderatitall's picture

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

qussl3's picture

Is it just me or does Lloyd look like gargamel?

Gargamel's laugh would be apropos now.

ZeroPower's picture

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

TradingJoe's picture

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

TradingJoe's picture

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

Wakanda's picture

Skewered and roasted muppets. 

It's what's for dinner.

streetcrawler's picture

Extremely low volume indicates a reversal in trend right?

printmemoney's picture

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

Sequitur's picture

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

Troncom's picture

Ha Ha Fozzie Bear, Fozzie Bear!

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.”

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.