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Market Snapshot: Financials Disconnecting

Tyler Durden's picture




 

Corporate bond flows continue to see net-selling in the major financials (such as GS, C, JPM, AXP, MS, and BAC) with MS volume huge. C specifically is seeing a lot of dealer-to-dealer volume. At the same time, CDS are limping sideways to modestly tighter and we note that while financial stocks are holding up from yesterday's incredulity, they are not joining the rest of the high beta sectors. Hardly the positive underlying factor this market seems to be rallying on? Financials remain in the red from Friday and we also note that IG and HY credit and making lower highs as equities make higher highs - especially HY which given its cheapness should be bid if risk appetite is truly there.

Sectoral performance since Friday's close.

UPDATE: It appears that there is a significant Morgan Stanley basis trade unwind the last couple of days - perhaps that is why we are seeing net-selling in bonds and modest CDS compression:

Looks like it was a great trade but large crowds and small doors...

 

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Wed, 10/05/2011 - 15:18 | 1742357 slow_roast
slow_roast's picture

This market might be more complacent than 2007.  Fucking unbelievable. 

Wed, 10/05/2011 - 15:22 | 1742378 SheepDog-One
SheepDog-One's picture

Yes theyve got all the 401K and pension Hindu bulls totaly complacent...right where they want em.

Wed, 10/05/2011 - 15:39 | 1742437 CClarity
CClarity's picture

And yet, the ultimate question remains.  What will extinguish the debt saturation while CBs keep ZIRP in place and global market credit debt is growing at a pace three times the global GDP rate?  THAT is what is unfucking believable - or rather fucking UNbelievable.

Wed, 10/05/2011 - 15:19 | 1742360 Racer
Racer's picture

Mark it up to sell to the bigger fool in other words!

People rush to buy higher

Wed, 10/05/2011 - 15:19 | 1742363 lapedochild
lapedochild's picture

Am with you.. also saying 'fucking unbelievable' because I am short the market and never seen a rout like this!

Wed, 10/05/2011 - 15:23 | 1742383 slow_roast
slow_roast's picture

Then you wern't around in 2007....sub-prime was exploding and people(Jim Cramer) was recommending that you buy Countrywide at $40...he ahd Angelo Mozilo on Mad Money on the same day that a Senate Finance committee was having a panel on sub-prime, yet instead of appearing in front of the Senate panel he was on Mad Money talking about how great of a position Countrywide was in. 

 

If 2007 was fucking retarded...2011 is retardeder. 

Wed, 10/05/2011 - 15:26 | 1742392 SheepDog-One
SheepDog-One's picture

Yea 2007 was NOTHING compared to this full retard hockey helmet 2011.

Wed, 10/05/2011 - 15:21 | 1742372 LongSoupLine
LongSoupLine's picture

The automated corruption has gone full retard.

Wed, 10/05/2011 - 15:27 | 1742386 SheepDog-One
SheepDog-One's picture

They've built a whole new special ed wing on the institute for this full retard class. Indexes in there eating glue and Play-Doh and pooping in their hockey helmets.

Wed, 10/05/2011 - 15:49 | 1742498 Miss Expectations
Miss Expectations's picture

We're going to need a bigger bus.

Wed, 10/05/2011 - 15:22 | 1742380 zorba THE GREEK
zorba THE GREEK's picture

Everything's okay, the governments of the world have it under control, that's why we

elected them, to handle problems like these so we don't have a serious problem.

If you don't believe it, look at the stock market, it's going up again today.

Wed, 10/05/2011 - 15:29 | 1742401 SheepDog-One
SheepDog-One's picture

Crowd control training for when they really pull the rug out, everyone will expect it to be quickly recovered and wont try to sell, as it continues down every day.

Wed, 10/05/2011 - 15:22 | 1742382 The Axe
The Axe's picture

they are coming for morgan coming another strong close.....in the works.....crazy

Wed, 10/05/2011 - 15:23 | 1742384 Belarus
Belarus's picture

The 45 minute ramp is here. Clockwork. WHAT. A. JOKE.

Wed, 10/05/2011 - 15:34 | 1742422 Spitzer
Spitzer's picture

the sad part is, gold is back in the risk trade dept. unlike the week after the debt downgrade.

Wed, 10/05/2011 - 15:55 | 1742542 smlbizman
smlbizman's picture

is this the time of year we set the stock market clock back to 3 p.m. take offs?

Wed, 10/05/2011 - 15:26 | 1742393 Josh Randall
Josh Randall's picture

This is the casino of crap

Wed, 10/05/2011 - 15:29 | 1742399 YesWeKahn
YesWeKahn's picture

It's all correlated, it just needs some time to get there. Yesterday, it was tech and financial. Today, it's more like energy, and emerging market.

Wed, 10/05/2011 - 15:30 | 1742402 SwingForce
SwingForce's picture

There was once a bank called RIGGED I mean RIGGS can you believe it? OF course you can! http://en.wikipedia.org/wiki/Riggs_Bank

But hey, Ben & Timmy work for all those banks mentioned above, don't think for a second they don't know that these stocks are well below TARP warrant levels, and even the levels they recapitalized themselves at in 2009. 

GooseWorks coming..... http://www.youtube.com/watch?v=UI2FolId6CA

Ben told everybody yesterday, I just can't do more than +50% CapGains on the long bond! 

Wed, 10/05/2011 - 15:34 | 1742410 CalibratedConfidence
Wed, 10/05/2011 - 15:31 | 1742411 adr
adr's picture

and WTI goes up over 5% in one day due to a European fix?????

That is what the story says.

Mass stealth Fed injection into the economy. It is the only plausible answer. Every time it looks like the S&P might be heading for 1000 and the Dow looks like 10,500 is coming up fast we get these gigantic rallies. It is insane. Everything is fixed one day and completely broken the next.

This is like having a schizophrenic wife who says she loves you one day and hits you over the head with a frying pan the next.

 

CAN WE GET THE MARKET SOME THORAZINE!!!!!!! FOR THE LOVE OF GOD!!!!

Maybe some trader will kill himself and we can put Wall Street up on murder charges. Then we can pull the plug on the machines when the stock market is found guilty. Hell I think we've already made it past the iRobot phase. We can prove computers are hurting humans.

Wed, 10/05/2011 - 17:01 | 1742881 LooseLee
LooseLee's picture

Sounds like my wife as she checks her I-phone for a facebook update!

Wed, 10/05/2011 - 15:32 | 1742419 Belarus
Belarus's picture

The market will end up over 2% at least. It's volumeless. So the VAPOR rise will materialize shortly. And YET, all MSM outlets will headline what a wonderful day isit  was in the market (leaving out that it is humanless and aglo Ben Bernank driven). 

When France comes out and says Dexia is all fixed I'm guessing the market melt-up continues as the traders push the S + P to 1200 and fry the shorts once again. 

Rinse. Wash. Repeat. This market is a joke. 

Wed, 10/05/2011 - 15:33 | 1742420 JW n FL
JW n FL's picture

 

 

James --

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Wed, 10/05/2011 - 15:40 | 1742440 BetTheHouse
BetTheHouse's picture

Second day in a row, starting at 3:30 exacly, they bang the close hard on financials.  All the banks going to be up 3 percent by close.  Why, it's almost like they are trying to discourage those shorting financials or something.  Whatsa matter Skynet?  Worried about the banks?

Wed, 10/05/2011 - 15:41 | 1742447 jm
jm's picture

Goldman hardly tightened at all.

 

Wed, 10/05/2011 - 15:51 | 1742516 TradingJoe
TradingJoe's picture

ZeroDamus laughing all the way to the next term?!?!

Wed, 10/05/2011 - 16:03 | 1742587 ivars
ivars's picture

Long term dollar index (USDX) prediction chart 2012-2018 with description and zoom options ( click on chart, then click on left upper corner zoom symbol) is posted here:

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&p=34401#p34401

Key points:

1) That is very important one to understand why there will be no inflation for another 4 years till 2016, why gold will not move up much in 2011-2013, and how USA will finance its needs by issuing even MORE unsustainable debt (held hostage to USD reserve currency status ) even in recession with approval of creditors (held hostage by USD reserves they have and need to continue trade imbalances with reserve currency issuing nation) . USD will deflate (gain in value) during 2012-2014. Recession will continue all this time, debt deflationary one.

2) Then, in 2014 the defaulting process will begin, lasting from 2014-2016, 2 years, with everyone scrambling around to try to position itself best ( if that is possible ) with all means available for the imminent default.

3) Nevertheless, I still stick with silver showing unexplained upside even during deflation period, as shown many times already in silver  graph from 35 in Q1 2012 up to 100+-20 USD in October 2012.

4) My thinking is, increase in silver USD price that has to be related not to inflation, but demand/supply issues. I favour explanation that demand will soar NOT because of some sudden new use of silver, but increased OLD use, perhaps very old use. I have only two options-either military buildup, or monetary policy of some sovereign based on silver (NOT the USA).

Wed, 10/05/2011 - 16:31 | 1742748 InExile
InExile's picture

There's no volume in financial bonds.  Volumes are pathetic.  CDS tighter.  This is overdone.  This is not 2008.

 

Wed, 10/05/2011 - 17:36 | 1742994 DarkAgeAhead
DarkAgeAhead's picture

Seems like the banks just unleashed the algo's on themselves. 

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karmete's picture

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