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Mini Flash Crash Following CDU Statement Eurozone Leaders Have Excluded Boosting Volume Of EFSF Sends ES Down 30 Points

Tyler Durden's picture


After soaring by over a hundred points, the DJIA subsequently plunged in a flash crash type move after Reuters carried headlines saying that the CDU budget expert said that the Eurozone leaders have clearly excluded boosting the volume of the EFSF (and the plunge has nothing to do with any ridiculous rumor of an S&P downgrade - the S&P would be sent into exile if it dared to defy Obama at this point in his debt ceiling hike victory lap). The plunge was further exacerbated by a previous interview on CNBC with Olli Rehn in which he was pressed for details on the EFSF which he naturally would not provide as obviously Germany is still not onboard. And as everyone knows, without a €1.5 trillion expansion in the SPV monetization mechanism known as the EFSF, Italy is doomed. The result: a 30 point plunge in the ES showing once again that when it comes to flash crash risk, it is once again all about Italy and insolvent Europe in general.


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Fri, 08/05/2011 - 10:14 | 1526661 Thorlyx
Thorlyx's picture

Always count on these clowns to move the market !

Fri, 08/05/2011 - 10:35 | 1526741 scatterbrains
scatterbrains's picture

for real, I visualize them sitting around smoking cigars laughing and plotting ways to panic this sovereign or panic that sovereign, all the while playing the game with money they create out of thin air... *and  now the berstank does the chinaman one better by approaching the printer with a single cartwheel, double Pirouette,  left handed, reverse tap of the print button to the applause of the fiat gods..bravo bravo* all the while the put/call ratio spikes and the sheeple dump their shares into the groups hands.

Fri, 08/05/2011 - 10:15 | 1526662 ZeroPower
ZeroPower's picture

Yes rumor was ridiculous - no man at S&P has balls enough to downgrade the Motherland.

Fri, 08/05/2011 - 10:13 | 1526665 pods
pods's picture

I wouldn't touch this market with a Robo's money.


Fri, 08/05/2011 - 10:34 | 1526740 GeneMarchbanks
GeneMarchbanks's picture

That is a terrible thing to say. I'd buy wineries in Argentina with his money, Leo said it's time.

Fri, 08/05/2011 - 10:50 | 1526798 Thorlyx
Thorlyx's picture

Does that mean I should sell my chinese solars ?

Fri, 08/05/2011 - 11:08 | 1526877 karzai_luver
karzai_luver's picture

You COULDN'T touch this market with a Robo's money,




Fri, 08/05/2011 - 10:16 | 1526668 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

It was a sad day when they let bots trade on the markets. You can't trade with or against machines.

Fri, 08/05/2011 - 10:51 | 1526808 InconvenientCou...
InconvenientCounterParty's picture

Algos are correlated near 1.0.

If you believe reality is correlated 1.0, then then you truly have no opportunity to profit from capital markets.


Fri, 08/05/2011 - 10:17 | 1526670 swissaustrian
swissaustrian's picture

How many puts did the cdu buy before?

Fri, 08/05/2011 - 10:17 | 1526671 schismjism
schismjism's picture

flash! a-ha! you saved everyone of us!

Fri, 08/05/2011 - 10:17 | 1526673 Jason T
Jason T's picture

Rudy Havenstein!!!!!!!!!!!!!!!!!!!!!!!!!!!

Fri, 08/05/2011 - 10:19 | 1526676 Boilermaker
Boilermaker's picture

Now back to our regularly scheduled forced rally on shit news.

Fri, 08/05/2011 - 10:20 | 1526682 Spitzer
Spitzer's picture

All good for the Euro currency itself, and not for the bond holders.

King Euro

Fri, 08/05/2011 - 10:22 | 1526686 Ben Bermonkey
Ben Bermonkey's picture

CDU leaders playing ping-pong, not bad. haha

Fri, 08/05/2011 - 10:22 | 1526688 the not so migh...
the not so mighty maximiza's picture

must repromming those cells, those spreadshhets must look good.

Fri, 08/05/2011 - 10:22 | 1526689 hedgeless_horseman
hedgeless_horseman's picture

...obviously Germany is still not onboard.

Come on Angela!  It could be made into a monster, if we all pull together as a team.

Fri, 08/05/2011 - 10:26 | 1526702 fuu
fuu's picture

I was listening to "Welcome to the Machine" when I read your post. Where in my office are you hiding?

Fri, 08/05/2011 - 10:29 | 1526708 GeneMarchbanks
GeneMarchbanks's picture

I'm pickin up what you're puttin down. Pink Floyd... a lot of 80s references today.

fuu, I was listening to A Momentary Lapse of Reason just a day or so ago. It was all better with Syd imho.

Fri, 08/05/2011 - 10:26 | 1526710 Shitters_Full
Shitters_Full's picture

Enjoy that cigar, HH.  By the way...which one's Pink?

Fri, 08/05/2011 - 10:24 | 1526698 machineh
machineh's picture

As Jim Rogers used to say, surely there is some kind of fee we can pay to resolve this matter.

What's €1.5 trillion between friends? 

Fri, 08/05/2011 - 10:24 | 1526699 DCon
DCon's picture

The European Failed State Fund is a myth. It has no cash and the States that are guaranteeing it are broke..


German politicians are calling for Merkel to come back from her holiday. Fat chance.





Fri, 08/05/2011 - 10:25 | 1526700 writingsonthewall
writingsonthewall's picture

TOO MUCH INFORMATION - I cannot keep up!


I'm still laughing at this 'intervention'

Is it just me or does anyone else find it funny that 10 trillion Yen only buys you about 2 days relief these days?


They need to find something a little stronger than the feather they're trying to stop this steamroller with!


Fri, 08/05/2011 - 10:26 | 1526704 Boilermaker
Boilermaker's picture

Phew, they've got the SPX and DOW back in the RAMP THE SHIT OUT IF slot.

All better now.

Fri, 08/05/2011 - 10:24 | 1526705 Tic tock
Tic tock's picture

The 'bots are programmed to love their owners - but they think. It might not be fair, but the bots are the imperfect tool used to oppress us slaves; if weren't for 'bots, we'ed be be oppressed some other way.

Fri, 08/05/2011 - 10:26 | 1526706 Cdad
Cdad's picture

Sustained selling in individual retail names that are extended.  Source of funds.

Sustained selling in basic material let up yet...even in names that have been obliterated [coal] which are probably good buys for a bounce back.

The algos are just mental EVERYTHING as one.  One day, they will shut down the room with the co located computers next to where Duncan Niederauer takes his afternoon constitutional.  This and tens of thousands of banker pink slips...and maybe we can begin the long road back to capital formation in the worlds largest capital markets.

Barring that, and the "joyous" NFP report aside, we are all still just as fucked as we were last night...last year...etc...

Good grief.



Fri, 08/05/2011 - 10:38 | 1526757 SheepDog-One
SheepDog-One's picture

We've ONLY had +250 points worth of total market swings positive to negative back to positive all in the first all totaly calm!

Fri, 08/05/2011 - 10:51 | 1526809 Cdad
Cdad's picture

Every day, the criminal syndicate Wall Street bankers take us closer to total oblivion through the destruction of the market's credibility.  Today...a prime example.

That the SEC continues to fail to address HFT and the co located computers is another day of market credibility death.  Everyone currently working at the SEC needs to be terminated, and unemployed Average Joes need to be hired...regardless of their professional background.  Purge the corruption.  

And pull the license at the BlowHorn.  The insidiousness of people like Joe Teranova, the Najarian brothers, Cramer [with his perpetual upside down calls]...the whole lot...they all need to go.  That COMCAST has also failed to act is ridiculous beyond belief...and I still believe that stock is a short until such time as redress is made.

Add to this the need to pull Ben Bernanke from the Eccles building.  Mail out tens of thousands of banker pink slips.

Do these things, and Average Joe can start to get a little bullish on America again.  Until then...sell and continue the revolution of the closed wallet. 

Fri, 08/05/2011 - 10:26 | 1526707 augie
augie's picture

it's a friday. can't have a down friday, Dat's bad fo bin'ness. i held through 1330 i can hold through a retest of 1230.

Fri, 08/05/2011 - 10:44 | 1526775 topcallingtroll
topcallingtroll's picture

Merely a flesh wound

Fri, 08/05/2011 - 13:19 | 1527514 augie
augie's picture

I'm not dead yet! I want go for a walk!

Fri, 08/05/2011 - 10:27 | 1526715 dwdollar
dwdollar's picture

Commence meltup to squeeze shorts.

Fri, 08/05/2011 - 10:29 | 1526718 Bam_Man
Bam_Man's picture

"We need more bailouts, dammit!"

Fri, 08/05/2011 - 10:29 | 1526720 Arch Duke Ferdinand
Arch Duke Ferdinand's picture

Why Speculators Should Sell Their Gold Now

Four Factors That Could Stall Gold’s Price Rise...

OT: hilarious 2 min video When Everything is impossibly upside down...

Fri, 08/05/2011 - 10:29 | 1526723 LoneStarHog
LoneStarHog's picture

Get ready for the PPT-generated Obama He Gonna Make Him A Speech Rally, while dumping worthless paper derivatives in the gold/silver markets, since the physical London market will have just closed and the gold PM Fix will be complete. Timing is everything. Right, Messiah?

Fri, 08/05/2011 - 10:34 | 1526742 WoodMizer
WoodMizer's picture

Looks like the PPT cant find the resources to juggle knives this morning.

Fri, 08/05/2011 - 10:49 | 1526794 Bob
Bob's picture

It's looking like a greased pig contest so far.  Got him  . . . lost him . . . got him . . . lost him . . .

Something tells me the HFT's are gonna be eatin' pork tonight, though, one way or the other, whether it's theirs or yours. 

Fri, 08/05/2011 - 10:36 | 1526761 SheepDog-One
SheepDog-One's picture

And as usual Obama speech is good for -100 DOW points every time.

Fri, 08/05/2011 - 10:31 | 1526728 bam_son
bam_son's picture

The term "flash crash" is grossly over used.  Yes it is very likely to happen again but this was NOTHNIG like a flash crash type move.  This was just a well deserved move down, big deal. There was not the chaos and disappearing markets that were present during the real flash crash.  Tyler, don't start being like the MSM and throwing undo fear out there.

Fri, 08/05/2011 - 10:38 | 1526752 dwdollar
dwdollar's picture

Maybe I'm wrong, but I believe it's defined largely by its time interval.

Fri, 08/05/2011 - 10:42 | 1526773 topcallingtroll
topcallingtroll's picture

Undue fear

Good point though

Fri, 08/05/2011 - 10:33 | 1526730 search
search's picture

They're still fretting, a sledgehammer says the weilder thinks only a sledgehammer will suffice. Self fulfilling? i think we're far beyond that

Fri, 08/05/2011 - 10:31 | 1526736 franzpick
franzpick's picture

FTSE has gone from down 2% pre-NFP to unch'd to back down 2.4%

I'll WAG DJIA close down 100 - 200.

Fri, 08/05/2011 - 10:34 | 1526739 oogs66
oogs66's picture

why do they bother calling it EFSF.  It all comes down to Germany deciding to throw more money after bad.  France is all in because it's banks are screwed.  Holland will do as told.  It all comes down to Germany,

Fri, 08/05/2011 - 10:40 | 1526770 machineh
machineh's picture

See you at the 'D-marks only' beer tent at Oktoberfest. Back by popular demand ...

Fri, 08/05/2011 - 10:38 | 1526753 topcallingtroll
topcallingtroll's picture

Ouchy! I did catch a falling knife yesterday at close, but so far merely a flesh wound.

EWZ has a yield of 5 1/2 %
They have hardly any mortgage debt, a growing economy and sovereign debt less than 60 percent of gdp. Cut off my other leg now.

Fri, 08/05/2011 - 10:38 | 1526756 Cursive
Cursive's picture

So, Priceline's profit doubling isn't going to save this market? Somebody remarked the other day that we have soveriegn problems, but the corporations are strong. What good are corporate profits when the money is no good?

Fri, 08/05/2011 - 10:47 | 1526782 dwdollar
dwdollar's picture

Corporate profits will be real when the government is no longer manipulating markets.  Until then, it's nothing but transient delusional hopium.  Anyone who argues otherwise is a shill.

Corporate leaders don't even believe their 'profits' will last.  Otherwise they'd be expanding and hiring.


Fri, 08/05/2011 - 10:38 | 1526763 walküre
walküre's picture

Thanks for setting that straight. It was a crash of some sort, some big money moved quickly out of the market.

Now, where do we go from here? I was prepared to trade the relief or upswing this morning. Maybe this time is still good to short?

Fri, 08/05/2011 - 10:52 | 1526813 SheepDog-One
SheepDog-One's picture

I dont know how one trades the 'Cuckoo's Nest', but good luck.

Fri, 08/05/2011 - 10:39 | 1526764 slaughterer
slaughterer's picture

"CDU budget expert"--strange the ES should crash on this news today, as there have been news blurbs since yesterday about German opposition to ECB. 

Fri, 08/05/2011 - 10:39 | 1526766 Tic tock
Tic tock's picture

At this point -undue - is almost apt; Europe is facing a crediblity deficit: the ECB is not set-up for this, and the EU has the wrong political philosophy to govern Europe. It's not working and it won't work.

If anything, the Euro will be used as a stepping-stone away from the dollar. And then - left to rot.

Fri, 08/05/2011 - 10:40 | 1526767 slaughterer
slaughterer's picture

If we close above 1180, I will consider this day a success for the bulls.

Fri, 08/05/2011 - 10:47 | 1526772 SheepDog-One
SheepDog-One's picture

Really, the bulls can have a good day today because of course they all sold far higher? Then got back in last nite at close, yea Im sure....I dont remember any 'bulls' posts saying 'thats it, Im out for now', in fact all the ZH bulls such as Robo and Leo posted theyre piling in long at 12,700 for the big 'debt deal' run up.

Fri, 08/05/2011 - 10:40 | 1526768 SheepDog-One
SheepDog-One's picture

WTF no RoboTrader post yet this morning? Probably having a tough time figuring a way to brush off all his posts saying to go all in long at DOW 12,700 for the guaranteed huge 'debt ceiling deal' ramp up.

Fri, 08/05/2011 - 10:40 | 1526771 Subprime JD
Subprime JD's picture

wheres robo?

Fri, 08/05/2011 - 10:46 | 1526779 taraxias
taraxias's picture

puking blood

Fri, 08/05/2011 - 10:56 | 1526829 buzzsaw99
buzzsaw99's picture

1) his broker sued for his three screen setup as part of the margin call.

2) he pawned his laptop for booze money.

3) jumped off bridge.

Fri, 08/05/2011 - 11:17 | 1526917 karzai_luver
karzai_luver's picture

KIdney "donate" is NOT a one day deal.


Cut him some slack!



Fri, 08/05/2011 - 11:31 | 1527008 RockyRacoon
RockyRacoon's picture

3) jumped off bridge.

Hopefully into a dry creek bed.

Fri, 08/05/2011 - 10:44 | 1526774 youngman
youngman's picture

The little guys are pulling out of the markets...the Money market funds have drained their cash paying them they have to lower we will go ..adn that is just one industry....Hedge funds are doing the same....people are scared...sitting it out....a lot are running to Treasuries...I can´t figure that one out..but gold and silver are an international currency...IMHO

Fri, 08/05/2011 - 10:42 | 1526778 gwar5
gwar5's picture



This is still just a global currency and a world central bank waiting to happen.

The current system is an old cow whose fumes are being milked to death.


Fri, 08/05/2011 - 10:48 | 1526789 Cortez
Cortez's picture

Trash day scrap collectors, Craigslist product flippers, and the four day county fair - All job creators.  But this reflects the real issue - Not only are we losing jobs, we are replacing higher paying work with dogshit paying work. 

Fri, 08/05/2011 - 10:48 | 1526790 Kina
Kina's picture

schizophrenia bitchezs. This market has gone insane.

Fri, 08/05/2011 - 10:48 | 1526802 SheepDog-One
SheepDog-One's picture

Wild hourly 100 point DOW swings from positive to this is all such a joke now.

Fri, 08/05/2011 - 10:52 | 1526811 bullet
bullet's picture

Folks pay very close attention to the gap on the chart!!!!!  I have two data feeds and that bloomberg chart makes three.  I can even look at one second data.  THERE IS NOT ONE PRICE PRINT FROM 1191 to 1206....15 handles with no prices on the employment number.  Think about it.  If algos can do that, this is no longer anything that resembles a market.

Fri, 08/05/2011 - 10:53 | 1526820 SheepDog-One
SheepDog-One's picture

Right its not a 'market' at all anymore, its now just a central bankster tool for public fear and control.

Fri, 08/05/2011 - 11:09 | 1526853 Highrev
Highrev's picture

And as everyone knows, without a €1.5 trillion expansion in the SPV monetization mechanism known as the EFSF, Italy is doomed.

If you say so (and you've got a bulletin board full of court jesters who agree).

Glad to see that you finally got Italy on your radar screen though, uh, what was it, about 4 weeks ago? (And the data's been there for years.)

(Nothing personal ZH - strictly business - but dogmatic statements without an argumentative thesis deserve such. Why don't you try again, starting with the numbers, and then incorporating into your analysis the recent positive - very positive that is - fiscal developments in Italy?)


Fri, 08/05/2011 - 11:11 | 1526874 walküre
walküre's picture

When is ZH going to comment on this?

The TSX was weird this morning. So now the exchanges are under cyber attacks as well?

Fri, 08/05/2011 - 11:27 | 1526974 The Count
The Count's picture

When will Merkel...somebody...anybody in Germany finally have the guts to say that "Ok, the party is over. Germany can and will not bail out the rest of Europe, even though giving up the DM was what we were forced to do to have the unification approved by France."

If the EU insists of dragging down Germany with the rest of the losers than Europe loses its motor. And that would not be a very wise move, but with bone heads at the helm there and here...


Fri, 08/05/2011 - 11:52 | 1527095 anonnn
anonnn's picture

Perhaps think in terms of...for whom would it be a wise move? Qui Bono?


Fri, 08/05/2011 - 12:00 | 1527122 stormsailor
stormsailor's picture

its through 1171 resistance level,  next chart resistance on the /es is 1037. thats a good ways south.

Fri, 08/05/2011 - 12:04 | 1527136 supermaxedout
supermaxedout's picture

Why is Italy doomed.

Just because the US wants that to happen to break-up the Euro zone?  Maybe the Americans are going to be succesful but I doubt it. I do not see, that Italy is not credit worthy anymore. And I believe the Chinese have the same opinion. I expect that China is buying Italian debt while dumping US Dollars.

The stock market is going down. So what, we know already that the US are manipulating all mayor stock  exchanges around the world. This is old news. But what is new is, that the US can not bring down the gold price anymore. And this will finally kill the US Dollar. Gold is going to emerge as the world reserve currency. The US Dollar is just living on Chinas mercy. The moment China decides it makes no more sense to prop-up the Dollar then he will fall like a stone. Maybe now is the time or maybe in a year. Who knows.



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