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No New Punchbowl Promises Send EUR Ever Closer To Fair Value
EURUSD has tumbled hard following the FOMC minutes as the much-hoped for 'we promise to print USD to infinity at the next meeting no matter what we see' phrase was missing. Two months ago, when the EURUSD was at 1.30, we asked if a 1000 pip move lower, based on relative central bank balance sheets, is in the cards. Today, we are 80% of the way there, with the Euro having tumbled 800 pips against the dollar as NEW QE gets priced further and further out - now implying a 20% likelihood of getting a new USD printing from the Fed within the next 3 months.
and perhaps more interesting, the ebulience in the Sovereign risk market of the last few days seems directly opposed to the weakness of the EUR; who is right? We hesitate to guess but for sure there is room for convergence to some reality.
Charts: Bloomberg
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Looks like a ride at Euro-Disney.
2:01 pm-"No crack! What do you mean,there's no crack in this pipe. I need my crack Benny."
Breaking News - Hide your assets and lock everything down. Even Simone Foxman (and her ghostwriters) at BusinessInsider, that low brow proxy rag of the New York Fed, just conveyed that 'The Fed' for the first time has acknowledged that Quantitative Easing may be "market destabilizing." No shit, BI.
And it only took her about a thousand words to utter what most here have known all along: "The Bernank broke all markets."
See her last sentence: "This would appear to be the first time that the Fed has expressed any public trepidation about QE destabilizing markets in this way."
http://www.businessinsider.com/federal-reserve-june-minutes-2012-7
This seems to be the money paragraph:
That last statement also seems to hint at another problem we've been talking about recently: the scarcity of safe assets. Some investors have complained that the scarcity of safe assets—given the Fed's unprecedented purchases of Treasury bonds—could disrupt markets, particularly in the case of big negative shocks. This would appear to be the first time that the Fed has expressed any public trepidation about QE destabilizing markets in this way.
Great post mate.
What is the FV of toilet paper these days?
If u r referring to gold, it's on its way there. It's a riot that anyone thought the ZIRP was anti-saver. The stackers of fiat are the only ones who will come out ahead in the coming deflationary depression.
Whatever you're smoking, you should have set down a while ago. Actually, I'd be incredibly appreciative of the buying opportunity if the PM market were to collapse (it won't).
You and me both!
As to what Willy is smoking, I think bath salts are all the rage today.
pods
good luck with that. Who needs simple math skills when you have economic nearsightedness to guide you.
What deflation? The depression is an inflationary depression.
This is the truth - http://flic.kr/p/cutWa7 - no way out of it. paper fail + gold win.
New or used ?
Fair Value for a virtual currency that is not backed by anyone? OK 1.2000 will do. But so will .6000 :)
I believe that I was the first to predict EUR-USD parity within a year, and that was 5 months ago.
(Easy...relax...real wealth crowd - in the relative land of toilet paper printed by blind fractional reserve alchemists, the one eyed fiatski is king - http://www.dartmouth.edu/~matc/math5.geometry/unit9/09108.jpeg )
We'll see how correct or incorrect I was.
Will that call be a real chimp-of-a-Cramer or a winning Burry?
I WANT MY 2 DOLLARS!
The miners CAN'T go any lower can they? THE PAIN! [/spock] lulz
Depends on which miners, there are still some good ones out there...
there is not a single significant mine that is subject to free market forces. They are one way or another manipulated, stolen from or cohersed by overseeing governments to ever be an honest entity that will be profitable that everyone hopes. Keep away from mining shares. They are allowed only enough wiggle room in stock price to act as a juggly worm to intice the investor to bite. Fish on!
I don't see it Tyler. If they print more in this election year it's over for Obama. Inflation will be unleashed in such a big way even the liberals will say wtf.
What inflation?? Everything is rigged.
I'm not talking about the reported CPI or PPI. I'm talking about what you pay for in the way of a commodity, food, etc in a normal shopping day. I've not believed the government reported number for years.
You're kidding right? It doesn't matter who is in the office at this point. They are both playing for the same team,and it's not ours. TPTB don't care if it's Obummer or Mittens...they own them both.
why is this obvious fact so hard for people to understand?
I'm talking in the form of liberal monetary policy. With exceptions more often it has been my experience that the Keynesians are the people who are of the liberal mindset as an aside. Mittens as you like to call him has gone on record to want to get rid of Bernanke as has Ron Paul btw. There are differences Doc however minor. I don't want to give up hope just yet.
There are no differences. Obama did the opposite of what he said. Romney will do only as his banker masters tell him and NOT what he says today.
ur just bitter "they teook yer jaaab!" Retard, yeah the "liberals" created the fed and planned this whole thing. Liberals want everyone to be debt serfs, not the poewer elite who orchistrate the whole thing. Put your mittens back of before mom finds you.
Stopler never had a chance.
this dollar rally is losing steam i think, its been fundementally weekend by the FED and USgov.. if you look ad DXY and EUR/USD last time EUR/USD was at these levels DXY was around 87.
dollar cant gain much steam even with collapsing euro.. money moving out of dollars in fits and starts. its finnished. 90 is a dream, why are people constantly hoping for QE to weaken the dollar. ITS ALREADY DEAD FOLKS its just kicking around a bit.
SELL DOLLARS BUY PMs
"why are people constantly hoping for QE to weaken the dollar."
Because they want to destroy capitalism.
Capitalism was destroyed in 1913 on Jekyll Island.
Actually, it was destroyed before it could ever take root, as the shrewd discovered how forcing/bribing/blackmailing/cajoling the 'elected representatives' of 'sovereign nations' to "borrow" from them was the best racketeering operation to have ever been devised.
And the year of damage where the great meeted to beat on Jekyll Island was actually 1910.
But your example is a correctly cited iteration on the theme.
timing is everything when your opening salvo gambits the future
Sorry, I conflated the meeting with the legislation.
No need for apologies...
...'twas only a minor detail I cleaned up re Jekyll Island, otherwise known as the meeting of Morgan, Paul Warburg (Warburg is literally the father of the latest version of a fractional reserve central bank we now have) and other notables- including a sole mystery person whose identity to this day remains a mystery- (in other words, Lieutenants of The House of the Red Shield), - although they refused the then President of the United States admission.
The de facto deed was done in 1910, but public acknowledgement wasn't allowed until the puppets in Congress passed The Federal Reserve Act of 1913 (I encourage everyone to read it b/c it's acually quite interesting in all of its details and ambiguities, and despite what some may claim, you need not be an attorney or legislative historian to understand its plain, if often ambiguous or incomplete, language).
Chapter 3 - Federal Reserve System (112-90) - U.S. Code"Federal Reserve Act" -STATUTE- 12 USC § 226 - “Federal Reserve Act” The short title of the Act of December 23, 1913, ch. 6, 38 Stat. 251, shall be the "Federal Reserve Act." -SOURCE- (Dec. 23 ...
i think silver breaks out soon. bounced off of golds 200MA like it did back in 2010 without these slamdowns on stupid press releases and other FED bollocks they are going up
it beggins today, the next leg down for USD and UP for PMs betya!
When I have time I'll try to roll forward this 52-week ROC pattern for gold, trend-pattern in place (with some breakage) since 2005 - 2012 apr 17 gold ROC trends | 52week ROC gold to 2400/oz - and I have this silver to gold price-mapping scatterplot 2012 06 24 scatterplot gold vs silver 10yr 03 | goldpricemodel to go with this gold price prediction chart 2012 06 18 277week roc 02 goldpricemodel 2011 Jan to 2012 Dec 28
good luck - 200 DMA doesn't even factor in as a controlling / predicting metric.
(old scatterplot 2011 dec 27 gold 07 | 10 years gold vs silver scatterplot and 2011 dec 27 gold 08 | scatterplot gold vs silver zoomed in) essentially unchanged.
because they want to destroy crony capitalism - there, fixt it 4 ya ;o)
TheQE camp are the conies so you way of sony
QE will come when it has been completely priced out. Oh the irony!
Yup
Gold blowtorched, "Paper" screaming towards new highs.
Everybody got it wrong.
Go Dollar!
Go Bonds!
Go Munis!
Stocks selling off, but still way over 12,000
I was wondering what happened to you! Check in with me every now and then. Your parole officer has come by looking for you. Remember, you are a Level-3 offender, so you have to update your address.
you should be proud. sonny boy has been killing it lately.
The only thing he's been killing is gerbils.
You're probably out of tape too...
So far, his prediction that European financials would be the top performing sector of 2012 doesn't seem to be panning out.
EUFN: -2.31% YTD vs. S&P500: +6.26% YTD
As long as robo wants to have rear-view short-term calls, can he say WTI? what a useless troll.
Umm, I hate to be the one to tell you, gold is up on the day so far. Don't you have access to a chart thingamajig?
don't worry - they will slam dunk it in the after-market, as usual ;o)
Looks like they forgot to hammer oil.
Yes, muni's are kickin' it! Especially San Bernardino, CA.
nope, paper down, gold up. Looks like you're not good at reading charts.
Truth is here - http://flic.kr/p/cutWa7
interesting the dxy reacting rather poorly to this and oils moving higher. copper is cofirming weakness in sp. but oil is fighting its 50day ma. will we break 1320 in sp?
Check the daily broadcast email....
WHO IS IN CHARGE OF THE RUMOR TODAY? Someone in Eurpoe drop the ball?
MUST.....BULLSHIT......AGAIN.....
Cue Herman Von Rumpboy with a "turned the corner" comment
Looks like the morons are figuring out that stocks NEED to go much lower before any QE. SPX has to be down around 1100 before any QE hits this market again.
One hour to go for the daily rooomer. We need a nice juicy EU is saved rumor today. Not sure if a QE rumor would help today. Or PPT can do what it usually does and just BTFD at 3:30 since no one minds the fat finger anymore.
New highs for Uncle Bucky
Peter Schiff must look really stupid right now.
Hay there, hows your retails doing?
I was in the local sears store. One aisle was closed with a cone in front of it. Someone took a crap right in the middle of the row. This was on Friday.
Nuff said about retail.
I didn't take the crap inside I took the crap outside and left it in the aisle because it was making my knapsack smell. Beside it seemed to fit right in with the rest of the stuff on sale there.
If it was in the women's lingerie area it was most likely Robo.
Thanks, my monitor is covered in ice tea now...
Retail worse than expected.
How many episodes of [laughter] during the FOMC were noted? For Prechter the frquency of those bastards laughing their asses off is correlated to social mood.
In 100 years, I don't think they have stopped laughing.
Ben's take'n it down.....'til Jackson Hole town.
if we have a pull back towards 1335/40 area it is a nice opportunity to add to es shorts. i hope they squeeze it a bit to get a better entry point.
I'm sure end of the day rally will save it (for now).
The only real reason to print is to fund the public deficit. So if they keep the dollar strong, all other currencies will convert, and park themselves at the US Treasury. This may preserve the status quo for quite a while yet.
i wanna my fucking 2c.
Call Maria, we're of the "lows of the day".
Did you see the bounce?
Think i'll have a little stab at that convergence trade, 1.24 it is then. Cant get any cheaper than this hourly candle low...jack be nimble, jack be quick, jack burnt his balls on a candle stick
Quite an impressive export subsidy for the Eurozone, especially Germany. So why are US exporters valued so much higher again?
Its all about the pre-election sticksave.
Just waiting for someone to say the US drought is a global disaster and that the governments of the world will fix it by printing more money.
Obama: I will save the US from drought by pissing in the appropriate places. I am your savior.
Romney: I will save the US from drought like I saved the Olympics from...whatever it was I will do it and create jobs.
The way this is going, EUR/USD could overshoot the balance sheet equilibrium to ~ 1.10 before turning arround.
Never mentioning that the President's Working Group on Financial Markets, run by the SEC, Federal Reserve, and Treasury, can buy what ever type of asset they want to leverage up the system.
Where is the deflation?
We are caught in the Crash of the Fiat Ponzi. Use logic. Understand that price in fiat currency matters not. Now all that matters are what they weight of your assets are. How much food/water do you have? What type of tools do you have? What are your skills? And when it comes to money, how much precious metal do you have?
Is money what makes us happy? No, but it preserves wealth. So the question is, how much wealth do you want?
its 2:15.. time for bennie to fire up the algos...we cant be having any reality days now. not allowed.
Never fear, squirrelio here, to save the day.
ANECDOTE (fwiw): Friend has P/A for her mom; the broker (small town guy - not sure what affiliation, if any) told her to take ALL mom's "investments" (which are duly diverified) and put in bank. "If she had 10-15 years to come back, OK, but I'd hate to see her lose 30%, or 50%...."). I told her credit union, not a bank.
Just in time for war.
they dont even try to hide the manipulation anymore. IE last 45 min. Ben. Just tell us what you want the SP,DOW,NAS to finish for the the day that way we could just only pay attention to the last 5 minutes and some other fun things during the summer. . This is such a joke
1.224 fair value on the horizon! When parity comes the WS asset bubble sinks like the Titanic!
What a dilemma, damned if you do, damned if you don't, the FED and WS squid are tied to the mast as the sirens of financial armageddon encircle the boat in troubled waters. Only mutti Merkel can save the oncoming tide of contagion banker default.
Does FED have an ace up its sleeve?