Guest Post: Fear And Fear

Tyler Durden's picture

From Peter Tchir of TF Market Advisors

Fear and Fear

Correlations are breaking down, and each asset class seems to be trading more and more in its own little world.  Sometimes retaining old correlations and other times moving counter-intuitively.  Each of those markets now seem to be driven primarily by fear.  The markets have been split into two camps, those that are afraid of rallies and those that are afraid of sell-offs.  The breakdown of many correlations is making it harder to hedge or to balance portfolios.  It is adding the broken feeling in the market.

Normally the markets are portrayed as a battle between fear and greed, but more and more it looks like greed left town and all we have is fear.  Fears of rallies, fears of sell-offs, and fears that someone knows something that you don't, fears of jobs, fears of tap on the shoulder, fears on redemptions, fears that the summer is almost over and you didn't enjoy it, and worst of all, the fear that your starting quarterback will be injured and the team will sign Brett Favre. 

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Waffen's picture

Fear Bitchez!!


Did I do it right?

oogs66's picture

with that avatar, you can do no wrong

Falcon15's picture

You did it right, now all we need is O'Bottom Our POSPOTUS to get on the toob and recycle a little of FDR and make a mark - other than the skids in his drawers - "All we have to fear is fear itself".

I am long on semiprecious metals - lead, steel, and brass, food, and phyzz. Bring it!

Got preps? Pray for the best, prepare for the worst.

moon_121's picture

What else is greed than fear to miss the big one? Fear rules!

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molecool's picture

Pure mental masturbation - trading correlations has always been a bad idea. They work until they do not. For instance take the TNX - that one worked for decades and then loosened.

I am not saying there is no fear but that is always present and the thoughts conveyed in this post are meaningless.

Shell Game's picture

I think it is meaningful.  Sentiment is a significant part of the market.  When the VIX is high do you ignore it, or factor it in?

MichaelG's picture

OT, but the correlation between this link:

Make sure to read our "How To [Read/Tip Off] Zero Hedge Without Attracting The Interest Of [Human Resources/The Treasury/Black Helicopters]" Guide

and the guide itself also seems to be borked.

ZeroPower's picture

Despite the rally, Itxx Xover still being bid at All is well, all is well.

TideFighter's picture

All minor worries and qualms, until you get to that Favre thing, then panic fear sets in.

piceridu's picture

Just heard a rumor that B of A 's Board just signed Favre.

John Law Lives's picture

"It is adding the broken feeling in the market."

That is an understatement.

It really is a pity that we have a Chairsatan who is punishing savers and creating conditions that urge a "risk on" mentality re. equities just to stay ahead of real inflation.  It is theft of the highest degree (imo).

theMAXILOPEZpsycho's picture

I'm just amazed people still actually save cash. If anything this crowed deserve to get their asses handed to them even more than the equity crowed. That said, with the save save no risk mentality it can't be long before they convert their fiats into whatever PMs they can still get for them (ie over the next 2 years)

GFKjunior's picture

Love the smell of volatility in the morning.

John Law Lives's picture

Home Prices Decline 5.9% in Second Quarter:

QE is a failure re. housing and employment.

dcb's picture

I made some comments of this nature yesterday on a post.

tawdzilla's picture

When stocks trade higher on bad news (because everyone expects QE to the rescue), something is terribly wrong.

Azannoth's picture

The only people left in the trading business are those who manage Other ppl money as they have 'nothing' to loose

Not even Soros wants to thouch this market and is 75% cash

PulauHantu29's picture

"The bank delays have left homes in the delinquency process longer. U.S. homeowners facing foreclosure averaged 587 days without making a mortgage payment in June, up from 251 days in January 2008, according to Lender Processing Services Inc. (LPS), a real estate information company in Jacksonville, Florida."


"Financially troubled condo associations are taking banks to court as foreclosure delays enable delinquent homeowners to stay in their buildings for years, often without paying dues that keep boards running. The groups start by pressuring lenders to speed up home seizures and take over payment of the monthly fees. In extreme situations, like the Vintage East case, associations may force banks to give up rights to the property."

CPL's picture

This has been happening in Florida quite a bit.  It's one thing when a couple homes are empty and condo fees for retirement camps are $100 a month.  It's another thing when 50-70% of the places are empty and condo fees are $300.  For people living on limited incomes it turns into a famine situation that only offers the option of nursing homes or a cardboard box on street corner.

Long-John-Silver's picture

I have no fear because Gold (and Silver) never go to zero.

Long-John-Silver's picture

Only Physical. Paper Gold is only paper.

V in PA's picture

Nice avatar! I started to reach for the screen.

theMAXILOPEZpsycho's picture

someone who bought silver in 1980 and sold in 2000 might give you reason to fear!

dwdollar's picture

America in 1980 wasn't completely gutted economically, had a relatively low GDP/debt ratio, and still had the political will to properly fight inflation.  Does America of 2012 have that capacity?

gmrpeabody's picture

Stop trying to make sense!

slaughterer's picture

What is there to fear?  QE3 is coming!   

kito's picture

no need for qe3 now that Hurricane "Fiscal Stimulus" is heading up the east coast, potentially whipping into manhattan at 100mph. this is the early christmas present krugman has been waiting for. better than aliens. lots of destruction and rebuilding!!! will pull us right out of this funk!!!!!!!!!!!!

InconvenientCounterParty's picture

looting should take down inventories a bit. Maybe GM dealers should leave the keys in the ignition?

glenlloyd's picture

naw, wouldn't do any good, their insurer would just reject the claim because they could have gotten them back via onstar.

remember.....everyone's watching!

Mesquite's picture

Shades of Katrina...?? (Only more efficient...)

Awakened Sheeple's picture

Headline on CNBS:

"Favre rides into NYSE on Lawn Tractor, Stocks Rally."

gwar5's picture

Fear and Loathing.......  Really big casinos bitches.



Oh regional Indian's picture

There you go gwar. It's not fear and fear but Fear and Loathing. Nice. And like someone said upthread, greed is just fear of missing out or getting less than we deserve.


tip e. canoe's picture

"There was every reason to believe I was heading for trouble, that I'd pushed my luck a bit far. I'd abused every rule Vegas lived by—burning the locals, abusing the tourists, terrifying the help. The only hope now, I felt, was the possibility that we'd gone to such excess, with our gig, that nobody in a position to bring the hammer down on us could possibly believe it . . . When you bring an act into this town, you want to bring it in heavy. Don't waste any time with cheap shucks and misdemeanors. Go straight for the jugular. Get right into felonies. The mentality of Las Vegas is so grossly atavistic that a really massive crime often slips by unrecognized."  ~ HST

Shell Game's picture

Funny how much less fear one has when awake to reality and heavily hedged with tangibles and a DIY mentality.

GD's picture

This chaotic market is setting up for a major flush, panic event is all broken-down and fragmented, will continue shorting on strength, while sitting on the toilet..

Zymurguy's picture

VIX has taken a strong u-turn today... taking off to new and exciting heights!

TradingJoe's picture

fear to be greedy! fear to control greed! greed fears to lose! and so on! Point on these "markets": chose one side and stick with it! For some Fear is QE3 ..etc isn't coming, for others Greed is because they think QE3 ...etc IS coming! We'll see who'se right in 2 days! Anyuthing else is just NOISE!

MayIMommaDogFace2theBananaPatch's picture

You've got -- that Broken Feelin'
Woah, that Broken Feelin'

InconvenientCounterParty's picture

Banks solid green and gold being liquidated. Yea, that's a big bowl of dissonance.

For that matter, banks solid green in isolation is a turd in the champagne fountain. Not buying that for a millisecond. Could it be as simple as the ECB shutting the fuck up? naaa.

More more bank-friendly accounting changes coming? Banks colluding on ratings and stock buy backs? This is one of those times that the conspiracy theory seems most likely.

One thing is for certain, the Fed and G7 CB's can't fix everything and people are going to figure that out very soon.

Musical chairs --let's get on with it.

unununium's picture

Death events coming and TPTB need better levels to short from.