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Goldman Summarizes The Reasons For Today's Rout
Everyone still dazed and confused by today's market rout will be delighted to know that Goldman is none the wiser... Or rather, Goldman knows precisely the reason why the market tumbled.
From Goldman Sachs
- Another down day for stocks. Why? EURUSD down. Why? Gold down. Why? Momentum and technicals – and neither the FED or ECB is ramping up the printing presses any time soon. Unfortunately this is as good as the explanation gets today. Lower unless there’s a reason for it to be otherwise. SPX drops 14 to close 1212 (-1.13%). The DOW closes down 131 at 11823 (-1.10%). The NASDAQ closes down 40 at 2539 (-1.555%).
- The VIX up 0.68 vol to 26.09.
- EURUSD through 1.30 overnight, and despite a short-lived rally, that handle seems a distant memory. Selling pressure remains, but again the flow isn’t overwhelming. All eyes on the year’s low at 1.2865. Good interest to initiate AUDUSD downside today. Everything from 1w to 6m, mostly via vanilla put spreads. Though vol is understandably higher this week, we’re still well off the year’s highs. EM selling also picking up. Mix of leverage accounts setting shorts and real money adding to hedges.
- LIBOR fixes 0.088bps higher and the front end follows, nearly 1bp weaker on the day. The rest of the curve immune to the re-emergence of funding concerns as the bond is the latest tenor to benefit from an insatiable demand for Treasuries. 30y auction clears 2.5bps through to yield 2.925% (the lowest on record) with yet another mammoth bid-to-cover ratio. In a world where gold falls 5% on a risk-off day and intervention risk looms over CHF and JPY, investors can’t seem to get enough of US fixed income.
- Commodities smoked across the board in one of the worst sessions in months - WTI down 5.3%, Brent down 4.3%. Gold breaks below 1600 for the first time since September down 3.4% on the day and Silver hit the hardest down 6.1% as some of the last profitable trades for 2011 come undone. Ags not spared either with Wheat down 3.3%, Cotton down 2.5%, and Sugar down 2.7%.
- Credit traded on light flows and no discernable direction, underperforming on the day.
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I'm not buying it, commodity moves were too sharp. There is shoe in the air somewhere, it is dropping but hasn't hit yet. The frustrating part is these squid fuckers probably know what it is too, but they'll put out this dribble now so they have some more time to front run it. A-holes.
EVer since the zerohedge rehypothecation story markets have tumbled. Maybe the big players know the truth is out of the bag, and they must deleverage before everyone else. Get out now, before the collateral chain shortens anymore.
dont' want to be holding the hypothecated bag, and find out you don't really own what you thought you did, and go bust.
sell first to survive.
Rehypothecation in reverse with the peddle to the metal.
Today reminded me of when the tide goes out just before the tsunami, and confused people on the beach stare at the fish flopping on the sand. A couple minutes later the wall of water comes to shore to wipe out everything in it's reach. Time to make another trip to Sam's Club, 50lbs of rice for 20 FRNs.
Serious question,. Is rice efficient?
Since you need water to prepare it, would it be more efficient to lay in a staple that you can prepare without using something that might also be in short supply?
Good question. Depends on you access to water, if your current supply line shuts down. I have a well (soon to have solar back up). You also need heat to cook it. But you can prepare it in a large pot, and it will last for a few days. Toss a can of beans and creamed soup on the rice, and you have a decent meal. Oatmeal is good storage food too, but you need heat and water.
A good ceramic water filter system is a must have item, then you can filter rain water, river water, etc... Plus, if you boil the filtered water, you shouldn't have any issues with the source.
Thank you for your reply. Laying in supplies ourselves and thinking through the items.
beans and rice make a complete protein.. in case you're a city feller who cant even pop a squirll.
Look.. God Love My West (By God) Virginia Family.. but squirl brain gravy is for the birds! LOL!
Bernanke drops the bombshell: he won't bail out Europeon nations.
http://www.marketwatch.com/story/bernanke-says-fed-wont-bail-out-europe-...
Has Bernanke rebelled against his european oligarch masters?
euro-markets to crater tomorrow?
The Bernank is.a tricky fucker. He'll bail out the EU banks but just won't call it a bailout. He will either call it by some other name or not say anything at all and just pray that Ron Paul doesn't get elected.
Water can be purified. A bigger question might be: Do you have the energy for the cooking time?
Buy or make a rocket stove. A few small sticks can bring a pot of water to boil. They are quite remarkable.
I've got a nuclear powered lighbulb at just over 8 minutes from me....at light speed that is.
Do you live by a river. If not, you are hosed.
soon there will be cholera in your river.
later, bodies ....
My well is attached to a river, but it's a couple hundred feet underground, filtered through granite. 30+ gals per minute is enough for both rice and oatmeal at the same time.
To answer your question re: whether water shortages affect rice consumption: Rice can be prepared in exactly the same way wheat is prepared. Rice flours and rice starch are commonly used ingredients all over Asia. If the water used in preparation became an issue, the mode of preparation would change (as it has many times in past water shortages).
BUT a much bigger question is with regards to water requirements during cultivation. While non water-intensive cultivation for rice is indeed possible (although requires large amounts of pesticide) it's not a simple transition for the agricultural sector.
However, from an investment standpoint (although certainly not a humanist standpoint) -- the price of rice will reflect a shortage of water for cultivation positively. OTOH, it would likely not be affected greatly by an increase in the cost of water for cooking due to the many alternate means of preparation.
LIBOR at .28% tends to support the tsunami theory. You can't panic banks out when they can borrow in an unlimited fashion to make margin. And you sure can't panic them out of gold when the gold carry trade died this month. That is one thing that amazes me people have not figured out yet. Probably because they think a negaive lease rate means you get paid to borrow gold. It really means gold costs more to borrow than dollars. GOFO is the real cost to borrow gold. Lease rates are LIBOR minus GOFO. GOFO is bigger than LIBOR resulting in a negative lease rate.
Yours is the first real comment I have to actually analyse and research to understand wtf you're talking about. Kudos!
Wait...wouldn't that mean gold would be going up?!
It would if central bankers weren't trying to fix the problem, I suspect.
Better get it before they start making you pay in SDRs.
true -- he who sells first, wins. More often than not anyway. I wonder how much Pelosi and Reid are making this week on their inside trades.
PS: I'm going long on torches and rope, bitchez. :)
read on: alittle about pelosi & others,... masters
"Sunlight Foundation" [blog]
'The Political One Percent of the One Percent' ___ by Lee Drutman 12-13-2011
http://www.sunlightfoundation.com/blog/2011/12/13/the-political-one-perc...
Interesting. Izzy K has a neat piece along these lines.
Izabella Kaminska is sounding more and more like she should write for ZeroHedge.
Maybe she does...
We're all just commodities now. And we are moving sharply down. Not exactly relative but it's all relative.
URGENT FAX FROM RI SENATOR MOURA TO SENATOR JACK REED
These magnificent bastards all belong in PRISON.
EDIT: The lousy hag from Wells Fargo "Office of the President" had the balls to call the Senate President's office to say this legislator is using her title improperly.
The hags name is Shari Ruber. Screw you Shari Ruber. Here is her direct line 515-324-6987.
Good for Senator Moura...going after GSE's for fraud? Who'd a thought?
A senator demanding accountability for hundreds of billions of taxpayer dollars, and then receiving lecture from Wells Fargo and Fargo bitch Ruber. Go ForeclosureHamlet. Fuck you Wells Fargo...Fuck you.
This story from R.I. is not over and should be categorized as [developing]. I love you Senator Moura.
Follow The Money... Jack (G)Reed (D) RI, is a wheel on the US Senate Banking Committee, friend of Barney Frankenstein, friend of Crissy Dodd and of course, "very insider" for the Squidd... Follow the Money $$$$$$$$$$$
HOPE AND CHANGE!
"I'm not buying it"
I can tell you've never worked for Goldman. There are dissenting opinions in almost every office cube.
It's easy to find one for each and every trading day.
Why am I getting a negative for this comment!? It is a well thought out comment. Not intentionally insulting and party mentioned. Informative and revealing.
I just don't understand where all this hostility is coming from.
1. You aren't in Kansas anymore, this is fight club.
2. Your post implies you do or did work for Goldman. Might as well say you were Hitler's butler.
What's wrong with being Hitler's butler?
A bewildered youLilQuantFuker stated:
I just gave you a negative for this comment only because you're being such a whiny little bitch. If you're so easily butthurt, you won't last long. Get over it, Polly Prissypants.
I don't know redpill, maybe a new war?
NDAA passes today which "also imposes new sanctions against Iran's central bank and pre-emptively freezes some aid to Pakistan."
And OPEC raises output today? Why now?
It's almost like Goldman and the Fed are dropping Napalm all over the economy. What a bunch of sick bastards!!!
-John
http://www.youtube.com/watch?v=4v-ZoQx6VOQ
The Drtyfrkrs have to blast commodities to keep the " Moderate Inflation " story alive so they can keep printing to infinity. If they make a a few billion on the operation all the better.
Ding Ding Ding......you win!
Squid show is the new donkey show.
Beautiful.
It's option expiracy day friday . . .
i don't believe anything the squid puts out to the public.
Sometimes they tell the truth just to keep you off guard.
quad witching
Maybe they could just say that momentum and technicals have started to catch up to the macro-economic fundamentals. Nah, too easy.
The only reliable (for the most part) explanation for stocks going up or down for the last year or so, as far as I can the hell tell, is whether the USD is up or down vs the EUR (and a few other currencies).
When The Bernank gets gold to 52,000 USD per ounce, we'll ALL be living the life of billionaires.
G5, playas.
It tumbled because they were short stocks and needed some fast cash to pay in advance for the expensive whores lined up for their holiday mixer.
Hoe hoe hoe bitchez.
Fiat hiding in the arms of full faith and credit must mean an Xmas eve flush...when not a creature is stirring. I'll choose curtain #3....Risk off til next year.
Something about christmas (no cap as it relates to time, not the holy day [holiday]) has been twitching my spidey sense for the last few months now. Dunno what it is but it's there and it's coming. Or not.
Same here, it's FEAR. TPTB are going to play off your most intimate fears this Christmas. As you stare into your innocent childs eyes and the world is collapsing around you, they want you to FEAR the collapse and pave the way for complicit peasant class. I guarantee it will be known as the Great Christmas Crash. Soom to be bailed out by our overlords as they rev up the printers.,
I see GS, JPM is working hard in herding us to the slaughter house.
With more money pulled out mutual fund and parking in the Treasury.
The only way to make money from the remaining "investors" is to misdirect them which ever way possible.
Sad... it is so sad that this country is ruined. And it is taking other European countries along with it.
At least you can bank money on the downturn... you got solar?? LOL
http://www.optionmillionaires.com/2011/fslr-first-solar-under-40-on-lowe...
Its times like this you miss Leo and his calls for purchases of Chinese solar and 300,000 + NFP prints any minute. And that was what - 2 years ago, 3 years? Told him then, sorry dude, ain't happening. Sadly, I was right.
goldman sucks lost their relevance sometime ago...
Conviction buy and sell actually used to move stocks. Now you just laugh...
Were that true, the squid would no longer
take up space on ZH. Take a look at Nov14 squid Buys CVD and RIMM and
where they are now.
In the absence of Fed easy money, surprise, surpise, the banks have to liquidate assets in order to raise money. Great insight Goldman. Thanks.
zactly - decline in gold is simply due to forced sales to gather USDs to meet impending or present margin calls. No one wants the shitty assets. As ZH says, he will sells first, sells best.
Looks like they participated in joint humanitarian venture to rise money for JP Morgan payment of MF GLOBAL. Similar move when they lost their farm on eur/chf and made there money following week with Silver spike.
Let's put things in perspective, shall we?
VIX is more or less at the low of the August 5th-Current period.
SPY is up more or less 10% from the low of the August 5th-Current period.
Today's move is exactly a 1 stdev move when VIX is at 25.
Even the freaking Euro isn't that low considering its historical prices and current yield.
Treasuries are the only thing pegged to the roof because certain classes of investors are unable to take the Euro risk at the moment. They will crash like there is no tomorrow as soon as this thing is resolved one way or another. I know nothing about commodities so I won't comment, but I suspect their movement wasn't that special in vol terms either.Commodities are falling primarily because of China slowdown. Dollar strength is also a factor but not the main one.
JP Morgan stock got killed the other day because of their connection to MF Global. JP Morgan is the biggest culprit in short commodies, think maybey their friend Ben the liar may have set this up? I do.
We will move sharply UP on something. Something fantastically bullshitty. Watch.
It doesn't make any sense but it will happen That is the pattern.
Any suggestion of QE aka printing gets you a day or so of rebound, and the market seemingly never tires of it.
Same reason a castaway on a raft in the middle of the empty south Pacific never tires of looking for airplanes, or sails on the horizon.
Chill out, bitchez!
To be long, you have to learn at which point(s) to buy. Especially after a blowoff, and just after a --soon to be short-lived-- ^DXY blowout. Tyler will help us understand the dynamics. And for that, we thank him.
http://www.rollingstone.com/politics/blogs/taibblog/occupy-wall-street-t.... Not sure if this has been posted. Quoting Zero Hedge
Nice link thanks. Worth reading.
it's getting more 2008 by the day.
Yes, it could be. But we could also be already in 2009. This summer and fall were a condensed and less panicked version of 2008. We haven't seen the massive withdrawals. Selling volume is actually not even that high momentarily, it is a lack of buying interest that's the problem. There are no buyers to sell to and the banks although they need to liquidate badly are in a tough spot. If the CBs have the banks in check, they will control how much the banks are allowed to sell. It's all pretty tame and civilized in the markets these days.
Keeping my powder dry for now. Shorting this motherfucker market is very tempting but potentially lethal. Let them muddle.
Right, but apparently equities are immune to deflation. My ass. Dow shouda been sub 11K today. Or maybe traders think we are headed into a high growth, low inflation economy. WTF.
If I took a truck and crashed into a number of shops the state would take away my licence ( the state would say , Brad you know what, you are not fit to drive trucks anymore!) , however I can work for a bank, cripple an economy , cripple my nations defence capability, put millions out of work etc, but I'm still allowed to go and work for another bank...
Before anyone gets too agitated, that's paper gold, not the real thing. No one can tell me that the spot price is for future deliveries. MF Global fixed that. The USD drops because the fiat adrenaline doesn't work anymore. There's no heart, left to start.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
I bought this morning and bought again this afternoon. Physical silver is starting to show signs of getting scarce. I wasn't planning to buy any more this year, but thanks whoever created this mess for the golden buying opportunity.
Glad to know Im not the only one here that gets super excited when silver drops. I see it as a buying opportunity and get all giggly like a little school girl with herpes.
Goldman just pissie about no QE 3. They are downgrading everything in sight.
Plus, we know they control the Rating Agencys and they are threatning to downgrade all Foreign Countries so they can make tons of money on the downside and everyone else loses.
The vampire squid knows and controls everything. In the meantime, ex head of Goldman Sachs, Corzine, says other peoples money disappeared.
Goldman forget it...China is crashing (commods selling like this has nothing to do with EZ), ok, that takes out your print jobs from the ECB/FED. With oil still slightly bid (hedge from the EUR) you won't see a print job till oil falls into the low 80s. Even then a China/commodity crash...
also the Chinese are mad buying USDs. So, USD bids will still occur even if printing drops the USD. Very serious situation. Hence China trying to encourage re-investment into China via Yuan loans. China is leaking liquidity at a major rate. It's a sinking ship.
But when China prints, yes, maybe a snap back rally. By then, the global economy will be totally broken. No bull run butnuts, just extreme volatility
99 handle on the AUD broken - Asian trading. Last time i checked australia isn't in the EZ...
This is bad.
Rout? you have seen nothing yet.
The CRB index is down 25% from where it topped in late April. So it´s in a bear market that will last a few years. Incidentally in late April the dollar started its run off a cyclical low and the stock market began to retreat.
Nothing really unexpected or surprising, just your usual violent bear market convulsions.
Just be nice if the market is saying enough MANIPULATION, now it's time to rest...
Let "luna_man" get back some, on the "short"!...RIGHT?
Guess I'll be running another get-out-of-dodge drill this weekend. The snow is getting deep up north, and I have some new snow gear to test.
I hope the shit doesn't hit before friday...
Goldman is one of the main reasons why the world is in shit shape today.
In my opinion all Goldman partners need to be behind bars
They are definitely a BIG part of the problem that is fractional reserve lending, leverage and more commonly known as THEFT.
Is it just me or does Goldman now just take zerohedge articles, compile them and improve the grammar and pretend they have done something to earn $2 million or more?
If I remember correctly, the 2008 selloff started first with a commodity correction. I think Oil started selling off and other commodities followed. Then in the fall, down went Lehman and down went the market. Feels like the same is about to happen. I don't see how the S&P stays over 1000 without some leak of immminent FED and/or ECB printing. Maybe the realization of a Greek default next week and triggering of CDS is the Lehman moment? Would be interesting to have the market crashing and lots of volatility through christmas and new years.
THe reason for the rout - simple - Paulson and his silly naive trades. An=mazing how investors are duped by a person who has never managed more than 10 bb in assets whose claim to brilliance is one great trade. At the end of the day, he will have negative P+L for his career. I dont blame him, only the idiots who gave him money
Exactly , the move in commo was too sharp relative to equities to be a true deflation signal... Looks like Bernank doesnt like those exposing the emperor without clothes...
Ron Paul Bitchez
20 gallons Kerosene fuel for cooking/heating check
10 gallons treated gasoline for genset check
2 cases of sterno cans check
2 cases of butane for campstove check
3lbs powdered milk (the kind with real milk fat) check
20lbs of coffee beans and instant coffee check
10 lbs powdered eggs check
3 cases of MRE's 2A 1B check
water filtration and iodine treatment check
Solar oven check
Solar batter charger check
10lbs of various beef jerky in 4oz vacuum packed bags check
50lbs of dried fruits and veggies check
25lbs of rice check
50 cans of various soups check
25 cans of white albacore check
12 jars of skippy natural peanut butter check
10 boxes of granola and cliff bars check
20 gallons of water plus tub liner check
Many cases of bottled water check
80lb GTFOOD bag with survival essentials check
1 cord of firewood check
Hopefully this will get me thru the winter should TSHTF before then.
More rice, more soups and I would add some oatmeal and honey to your supplies. Also, a couple of big bottles of daily vitamins. Check out the medium sized rocket stoves on Youtube, they can boil a half gal. of water with a few decent sized sticks.
http://www.youtube.com/watch?v=H7BcZD_IzCQ&list=HL1323921231&feature=mh_...
I forgot to mention oatmeal, sugar, flour, and salt. Thanks for the rocket stove link! I know what my weekend project is going to be!
Using bricks to make a rocket stove...
http://www.youtube.com/watch?v=XSMR2ANIZ7E&feature=related
I just hope Silver stays under 30 until I can get to the bank and my local bullion guy Thursday morning!!!
I'll be adding to my tuna fish, powdered milk, and flour stash as well :)
And yeah I have fuel(s) and water covered already.
The best thing is I live in a relatively unpopulated area compared to most people on ZH. I'd hate to be living in a large metro area back east like I used to live in years ago.
'Cause for many of you back there...Soon life is gonna be like in that book
One Second After
"and neither the FED or ECB is ramping up the printing presses any time soon."
the lunatics are in charge
goldman on the loose
Original Yardbirds: Dazed and Confused
http://www.youtube.com/watch?v=58mQvW0ROag&feature=related
A rout that stopped with frantic HFT bid/offers?
Next...flash crash redux
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Why do you accept that what Kitco or INO or any other website says, is the price of gold IS indeed the price of gold?
We own those Companies or the people that run them.
You know that.
You know that currently what dollars or euros are is not even defined; their value is not legally determined nor defined. (FRNs are actually illegal to boot.)
Would you give me something in return for nothing?
So why do you give me your gold and silver for dollars?
Moron.
UE lies, home sales lies,debt level lies, corzine lies,obuma lies,bush lies,ben lies, earnings lies, CNBC lies, MSM lies, Newt in lead lies, Iraq war over Lies,china RE lies,
why don't I feel confident? according to consumer pols I do, I just don't realize it.
it is so funny, because the answer is so easy, but they never want to say and the anser is algos. just chart baby, ignore the news and noise.