• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Market Reaction - Gravity Bites As Draghi Serves Cold Plate Of Epic Disappointment

Tyler Durden's picture


As he began to speak the EUR rallied, EGBs rallied and ES rallied - last minute hopiness wrung out of the system, but as soon as he explained that his plan to promise a plan which plans to promise a solution was nothing but another promise and not an actual plan, so everything reversed. S&P futures are  -17pts from pre-Draghi, Gold back under $1600, and the USD is ripping higher, Treasury yields are down 8bps from pre-Draghi, EURUSD is down 50pip sfpom, pre-Draghi after trading up over 1.24 as he began, and has retraced over 75% of the post-Draghi 'believe' speech. Spain and Italy have given back the immediate euphoria with Italy now 50bps wider from pre-Draghi and Spain +25bps (having retraced over 60% of the post-'believe' rally).

EURUSD (now under 1.22)

and from 'believe'...


Euro Government Bonds cracking wider...

and European stocks plunging...


and across asset classes - its derisking reality:

but a lot more gravity to go yet..

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Thu, 08/02/2012 - 08:54 | 2671665 fonzannoon
fonzannoon's picture

How many points are we up since Draghi and Bernak leaked their BS? Unless we are down 750 on the dow today this goes in the win column for them.

Thu, 08/02/2012 - 09:06 | 2671730 malikai
malikai's picture

The wins were last week. Reality is coming back.

Thu, 08/02/2012 - 09:08 | 2671743 Lohn Jocke
Lohn Jocke's picture

The more shit you throw straight up in the air, the more comes straight back down on your head.

Thu, 08/02/2012 - 09:22 | 2671807 Jlmadyson
Jlmadyson's picture

A true philosopher right here.

Thu, 08/02/2012 - 09:47 | 2671945 Tabarnaque
Tabarnaque's picture

They are using this crisis to firm up their grips on the European continent. Period. All the rest is noise to distract people’s attention from their real game plan. QE today or QE tomorrow and everybody is living to hear this word while the real move is happening in the background without people noticing it. I have a deep aversion for central bankers and all their organized crime but I have to admit that they have mastered the art of illusion. They perfectly know how to catch people’s attention with a sheer distraction while they achieve what Napoleon and Hitler failed to do: I refer to a complete centralized control over Europe by a small click of psychopathic banksters that have an unlimited greed for money and power. 

Thu, 08/02/2012 - 10:49 | 2672229 LooseLee
LooseLee's picture

Actually they are only mesmerizing the idiot equity bulltards that are their poster-boyz for their FASCIST-SOCIALIST agenda.......

Thu, 08/02/2012 - 11:45 | 2672457 Bindar Dundat
Bindar Dundat's picture

We won last week selling into the rumour.  Won again today by buying back on the dip.  Rinse and repeat please.

Thu, 08/02/2012 - 09:44 | 2671927 barkingbill
barkingbill's picture

so that makes them shitheads....

Thu, 08/02/2012 - 09:29 | 2671833 gjp
gjp's picture

Love your comments, Fonz.  Find myself nodding everytime I read them.

Thu, 08/02/2012 - 09:53 | 2671976 Eireann go Brach
Eireann go Brach's picture

That motherfucker works for Goldman and not the ECB!

Thu, 08/02/2012 - 11:58 | 2672517 ElvisDog
ElvisDog's picture

The stock market pump is irrelevant in the big picture. Italy, Spain, and Greece are losing the ability to fund government-provided social programs through deficit spending, and Germany so far is refusing to play "Rich Uncle Helmut". Draghi's big plan was to have his wealthy neighbor pay his bills. Now that his big plan is falling through, what it Plan B?

Thu, 08/02/2012 - 09:04 | 2671722 GetZeeGold
GetZeeGold's picture





Thu, 08/02/2012 - 08:54 | 2671668 veyron
veyron's picture

At least it's still above parity ...

Thu, 08/02/2012 - 08:56 | 2671675 Mugatu
Mugatu's picture

Only in Europe can we have shit like this!

Thu, 08/02/2012 - 09:18 | 2671781 giovanni_f
giovanni_f's picture

Oh really? How about the debt ceiling farce?

Thu, 08/02/2012 - 08:57 | 2671681 viator
viator's picture

Unfortunately “The ECB cannot replace governments,” Mr Draghi warns.

Thu, 08/02/2012 - 09:29 | 2671834 azzhatter
azzhatter's picture

I like how this fascist pig says "unfortunately"

Thu, 08/02/2012 - 08:57 | 2671685 Flounder
Flounder's picture

You know TD, for a few minutes this morning as the eurusd was hitting 1.24 I doubted you.  And well now...I'm so ashamed.  Won't happen again.

Thu, 08/02/2012 - 08:57 | 2671689 Jlmadyson
Jlmadyson's picture

Can you bullshit hypnotize a market anymore than this?

I don't really know.

Thu, 08/02/2012 - 09:07 | 2671737 CrashisOptimistic
CrashisOptimistic's picture

Why do you guys continue?  How do you not see it?


That has all gone away and it's not going back to normal.  Ever.  There is no price discovery.  There is only manipulation.

Do Not Participate.  There is no money to be made there.

Look into buying farmland.  Nothing else within your reach is an option.

Thu, 08/02/2012 - 09:18 | 2671787 Jlmadyson
Jlmadyson's picture

And why should I do that. Feds will take 55% of my grandfathers farmland next year if he passes.

The game is rigged for everything.

Thu, 08/02/2012 - 09:21 | 2671805 CrashisOptimistic
CrashisOptimistic's picture

Well, that sounds like estate tax.  If so, it would apply to any asset whatsoever so that's not a rebuttal.

Thu, 08/02/2012 - 09:24 | 2671814 Jlmadyson
Jlmadyson's picture

No in fact it is because while you may buy farmland for return the system will still end up winning in the end. Just like this rigged market.

Thu, 08/02/2012 - 09:29 | 2671837 eclectic syncretist
eclectic syncretist's picture

Your grandfather needs to take on a younger co-owner for the property so that when he passes there will be no lawyers or government tax assholes taking his land from his family, as the co-owner(s) will simply carry on as before. 

Thu, 08/02/2012 - 09:41 | 2671915 CrashisOptimistic
CrashisOptimistic's picture

That is the viable solution.  The guy did not seem to understand that he was not offering a rebuttal.  Estates beyond the threshold are taxed, whether they hold farmland or gold or paintings or stocks.

His point was not a rebuttal.  He didn't understand.

Thu, 08/02/2012 - 09:47 | 2671944 Nobody For President
Nobody For President's picture

madyson - you need to introduce your grandfather to estate planning. My kids will get our land with no estate taxes, because wife and self don't own the land, our marital trust does. For one to two thousand bucks for an estate planning attorney, several hundred thou plus in less taxes can be saved - plus making the transition for those left after a lot easier all around - powers of attorney, pour over will, all that stuff done.

Thu, 08/02/2012 - 10:08 | 2672039 Jlmadyson
Jlmadyson's picture

Does he have to be alive for 7 more years for his children to avoid estate hit? He has been a bit adamaent in his old age to this point because his estate has been less than 5 million and I think he believes they could run out of money even though they have plenty to make it well beyond their years. It kicks in at 1 million at 55% in 2013 which will hit his estate.

From my short reading co-owner would still get hit but perhaps not trust. They really need to convince him.

Thu, 08/02/2012 - 08:58 | 2671694 tawse57
tawse57's picture

He did what European politicians have been doing for 4 years - kicked the can down the road.

Thu, 08/02/2012 - 08:59 | 2671697 SheepDog-One
SheepDog-One's picture

So....what youre sayin is...theres a CHANCE? YAY!! So you're saying there's a chance - YouTube

Thu, 08/02/2012 - 08:59 | 2671699 fonzannoon
fonzannoon's picture

Mario's nose just started knocking over the TV cameras in the back of the room. Awkward.

Thu, 08/02/2012 - 09:00 | 2671704 Kreditanstalt
Kreditanstalt's picture

The half-life of new government-central bank blurbs seems to be now only a few minutes...

Thu, 08/02/2012 - 09:00 | 2671706 Itch
Itch's picture

Naughty naughty, very naughty.

Thu, 08/02/2012 - 09:00 | 2671707 Aunty Christ
Aunty Christ's picture

How's that price stability mandate doin?

Thu, 08/02/2012 - 09:00 | 2671708 Rathmullan
Rathmullan's picture

"THE EURO IS IRREVERSIBLE" - Mario Draghi 8-2-2012

So, starting with Greece and, eventually Germany, I'm going to "draghi" you to hell

Thu, 08/02/2012 - 09:04 | 2671723 Hype Alert
Hype Alert's picture

Yes, but mistakes are infinitely repeatable.

Thu, 08/02/2012 - 09:10 | 2671751 Lohn Jocke
Lohn Jocke's picture

Maybe it will be different this time...

Thu, 08/02/2012 - 09:10 | 2671750 john_connor
john_connor's picture

He never defined who would still be in the Euro.

Thu, 08/02/2012 - 09:00 | 2671709 viator
viator's picture

1.22, 1.22, anyone give me 1.21?

Thu, 08/02/2012 - 09:02 | 2671714 RiverRoad
RiverRoad's picture

Ya gotta parse what this guy says fer sure:  "We'll do everything we can to save the EURO".  (If Greece goes, so be it.) 

Thu, 08/02/2012 - 09:02 | 2671717 DavidJ
DavidJ's picture

Maybe I should stop trading EUR/USD?  I just can't seem to win much.

Thu, 08/02/2012 - 09:10 | 2671755 williambanzai7
williambanzai7's picture

Bet USD parity and FB at 10. You will be a master of the universe.

Thu, 08/02/2012 - 09:03 | 2671718 Bubble
Bubble's picture

 he's got nothing. he's been found out. he's still trying to talk the mkt up.

Thu, 08/02/2012 - 09:05 | 2671725 Wm the Shrubber
Wm the Shrubber's picture

DOW is up over 500 pts since Hilsenrath "opined" in the WSJ and Draghi first opened his mouth last week.  It's a net win so far for the banksters as they have discovered a potent new weapon for their arsenal - the power of the boldfaced lie!

Thu, 08/02/2012 - 09:12 | 2671760 SheepDog-One
SheepDog-One's picture

Sure, now lets see em cash it in.

Thu, 08/02/2012 - 09:05 | 2671726 Cursive
Cursive's picture


as soon as he explained that his plan to promise a plan which plans to promise a solution was nothing but another promise and not an actual plan

He's like a verbal matryoshka doll.  This "market" is so idiotic.  Thank God for Zero Hedge.  See ya'll at ~1100.

Thu, 08/02/2012 - 09:06 | 2671732 L927
L927's picture

Sir, what exactly did you mean? markest are not impressed.

They are?????

No, they are not!

Thu, 08/02/2012 - 09:07 | 2671735 Dermasolarapate...
Dermasolarapaterraphatrima's picture

Mr Market won't like this and Bankers will like it less when they see the possibility of their bonus decreased.

BTW, how are those LieborGate indictments coming along?

Thu, 08/02/2012 - 09:07 | 2671736 Boilermaker
Boilermaker's picture

So what?  They'll just come with another lie.  Everyone will pretend to believe it.  Then be dissapointed.  Then another lie will come.  Then dissapointment.  Then another...

Thu, 08/02/2012 - 09:11 | 2671759 CrashisOptimistic
CrashisOptimistic's picture


Just stop.

THERE IS NO MARKET.  It's gone.  It's never coming back.

Algorithms read headlines.  The preparers of the algorithms inform the media what headline they are looking for, or what headline to avoid.  Then nothing triggering negative ever appears.

Just Stop Trading.  Go away.  Buy farmland.  This is no longer a vehicle for you.  

The party is over.

Thu, 08/02/2012 - 10:43 | 2672199 takinthehighway
takinthehighway's picture

Somewhat OT, but you might want to consider timberland as well...I've been studying up on woodgas generation and like what I see...kinda neat, the idea that you could run a car and power your home with wood!



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