Overnight Markets Plunging

Tyler Durden's picture

Just as we warned at the end of today's nonsense, the afternoon ramp is fading fast now as the sad but true reality of a sun that rises in Europe awakening the maddening crowd. EURUSD is at 1.2970 (70 pips off the late-day swing highs already), ES (S&P 500 e-mini futures) are down 10 pts from the closing swing highs (which just happens to coincide with Sunday night's gap-down opening level around 1354.25), Silver has slumped back to the day's lows around $29, Gold back under $1600, and WTI is down around 2% from the day-session close at around $96.50. Treasuries are leaking lower in yield but FX markets seem very active as AUD drops to near parity with USD and carry pairs are generally weak. There are still a few more hours until Europe opens so anything can happen but for an overnight session, markets are not happy.

EURUSD not happy at all...

and nor are US equity futures...

But commodities are getting hammered again overnight (margin calls?)...


Once again - the intraday reality of credit markets (Corporates and Treasuries) is seeing equities converge lower to shake off that end-of-day insanity ramp. Clearly signaled by equity futures dropping back to CONTEXT (broad risk asset proxy) - though the latter is also fading fast this evening...

...and for the next time some equity analyst talking head scoffs when you tell them you use credit market information in your analysis - here is Bank of America's equity reality check writ large post stress-test results...just saying...


Charts: Bloomberg and Capital Context

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
TravsMom's picture

Face. Melt.  Should be a fun summer.

BudFox2012's picture

Let's hope we make it to Memorial day before worrying about this summer...

strannick's picture
Market Nuggets: Mitsubishi: Gold Hit By 'Another One Of Those Tsunamis Of Selling'

Tuesday May 08, 2012 2:45 PM

Gold’s weakness was exacerbated by “another one of those tsunamis of selling,” says John Howlett, division vice president with Mitsubishi International. “Supposedly upwards of 14,000 lots of gold were sold in the 5 minutes from 8:20 to 8:25--the old open-outcry opening time,” he says. “After the 7,500 that went on April 30...

China buying 10 times the gold by the ton through Hong Kong. India rescinds its gold tax. Physical gold flying off the shelves, meanwhile paper gold contracts getting sold by twice as much as April 30. When you're creating these naked short COMEX contracts out of thin air, backed by the Federal Reserve, and winked at by the CFTC, its no problem.

Nothing contra intuitive about gold's fall at all. This paper smash on a day like this is just what you'ld expect. Like Embry said, by the end of the year this will be looked back upon wistfully as that great buying opportunity. THen again you could just save dollars or buy Treasuries, or kiss Charlie Munger's ring.

DoChenRollingBearing's picture

I am out of town, but BTFD anyway....

flacon's picture

Time for some pole dancers in art form. Time for gold and silver to meet their end denominated in ficticious paper money. 


The price of gold in Zimbabwe Dollars is still ZERO AND INFINITY. The same will happen with US Dollars.... Zero dollars will be able to buy gold, but infinity dollars will want gold!


So watch the most beautiful exercise on a silver pole before shit hits the fucking fan! 






Oh regional Indian's picture

India had a really bad day yesterday and today it's doing the onsey twosey 30 point swinging. 

Anyone else notice how all major markets seem to be coming into the 15,000-18,000 band?

Wonder why.



peter4805's picture

She can work on my pole any time she desires.

Comay Mierda's picture

Gold chart looks awful and TLT breaking out higher. 2008 part 2 developing. Best to hedge physical holdings with slv and gld puts or inverse etfs. The smashing and price suppression is likely to continue. The fundamentals remain bullish as ever, but the market can stay irrational longer than you can stay solvent

cranky-old-geezer's picture



2008 part 2 developing.

Yep, reminds me of Aug 2008 except MBS aren't collapsing, this time it's growing anti-bank sentiment in  France and Greece raising the possibility of default, euro dropping hard.

Default.  Bankruptcy.  It's what needed to happen in '08 but TARP and QE prevented it.

If one euro nation defaults, it would send a shockwave thru bond markets.  Trillions of dollars (or euros) of sovereign bonds suddenly drop in value. 

And default is a bigger possibility now after election in France.  That's when all the markets started dropping, after Sarkozy got booted out.

Bankers are scared shitless once again, just like they were in Aug '08.

But this time QE won't come so easily.  The dollar and euro are much weaker now than they were in '08.  Another round of QE or LTRO might do severe damage to both.

Plus we have 3 years of experience proving QE doesn't help the economy one bit, it just helps banks stay in the gambling casino and helps government spend more money. 

3 years ago many people believd Krugman's "more inflation, more government spending, save the banks, and the economy will recover". 

They've had 3 years to see it doesn't work, Krugman is full of shit, he's just a banker whore.

ffart's picture

Fundamentals don't matter when you're trading these markets. Especially gold and silver. The stocks and futures are just designed to keep you gambling in the same casino as AAPL and NFLX owners. The only thing that matters to asset pricing is how much are the banks willing to intervene to keep the stock market afloat. If you want to do any kind of fundamental investing maybe you should consider starting a mafia protection racket in one of the soon-to-be suburban ghettos popping up all over America.

covsire's picture

Someone help me out, where is the money going?

mt paul's picture



choose your poison ...

flacon's picture

What is money? What is debt? I don't know where either of them are going, but FUCK EVERYONE I AM GOING TO SILVER!

bentaxle's picture

And Bank of America's begging bowl...

WmMcK's picture

Or flip the power switch, no controlled shut down possible.
Discharge the capacitors, then restart (with install disk in hand).

DeadFred's picture

Leveraged long positions are being sold. Assets are being liquidated to cover margin requirements. Some goes to the institutions that loaned money to create those long positions. Some goes back into accounts as cash reserves if you were lucky/good enough to book a profit. They can use that to BTFD and hope it's really a dip and not the first shoulder of a long dive. Keep tabs on BAC and remember what happened the last time it hit the death price of $5. I don't expect more QE until it's needed to saved the precious banks.

By the way is there any idea of which primary dealer dies in this round? All of them would be nice but it's too early in the evening to be dreaming.

rzero's picture

Someone help me out, where is the money going?

Treasuries. Lower yield indicates higher demand. It actually is that simple.

msamour's picture

For the most part the valuation of we laypeople understand to be "money" gets destroyed. I believe I read somewhere that 90% of all monetary transactions are electronic. When assets loose value, the only thing that really changes, is how much the asset is priced in at the new value. The "money" does not go anywhere, because it was never really ever physically created.

If I go to a town and no ones sells oranges, and people want them, I can sell them 20$ each, and people will think that oranges are worth that much. But if another guy shows up and sells them at 2$ each, then there is suddenly an 18$ per item destruction in valuation. The oranges were never really worth 20$. In many markets, where certain players can manipulate prices, they inflate. 2% inflation rate a year seems like nothing, but after 30 years, that is a massive increase.

There is also a case to be made for increasing energy costs, if access to cheap energy gets restrained, the petrol corporation will have to spend more to access, and refine the oil. They pass on the increased costs to consumers so they can continue to have increased profit levels. The entire capitalistic economic system is predicated on the basis that profits must always increase from one year to the next. This view is not necessarily to express that Capitalism is wrong, it is just that reality eventually catches up with people who think you can have infinite growth in a world where there are a finite amount of resources.

Likstane's picture

A cogent and accurate assessment.  You should be a teacher.   

atomicwasted's picture

Value is subjective.  They were "really worth" whatever someone was willing to pay at the time.  High prices lead to the entry of many competitors, who can undercut you with cheaper goods.  They were really worth $20, then really worth $2.  Absolute value is a chimera.

Ranger4564's picture

I have a lovely bunch of Tulips here you might be interested in.


Although i agree absolute valuation is impossible, you can't dismiss context, whatever form that takes. Otherwise you'd be arguing for arbitrariness and that too is impossible.

cranky-old-geezer's picture



Someone help me out, where is the money going?

From losers to winners.

Reverse Split's picture

Someone help me out, where is the money going?

Hookers. They give our money to themselves, the too big to fails, the white shoe boys club. They, in turn, use it on hookers and coke. That's all this is about really. It's a swindle to keep them bangin hot Eastern Europeans until they're expired or well into their 80s, these sleazy crooks.

Clashfan's picture

Say this twice, Reverse. Thanks.

It's nice to see someone explain it clearly and succinctly.

I'm just looking for fun.

They're wearing Burton suits. Ha, you think it's funny...


flyingpigg's picture

Someone help me out, where is the money going?

The real money has been going to China and Russia in Q1 in exchange for USD's...

jmcaule4's picture
This simple indicator nailed the bottom of the market today! $RUT vs $SPX in action $IWM $SPY
Western's picture

Don't worry, Aziz got hella junked last summer.

tempo's picture

Some left wing nut with no power from Greece threatens to reverse asterity measures and stop debt repayments while wanting Greece to remain in the EU and the entire world stock markets crash. Why is everyone scared about this retoric?? Big Ben, Germany and China carry the big sticks and may have to bring this guy to his senses.

vast-dom's picture

please let's not overreact -- these markets are all hopium infused and bloated. a true correction occurs when, say, the SP is back at 800. 

The miraculous fuckushima asian last minute reversal may occur tonight as well. 


Please hold on to your panties Ty, we're not even close to a plunge. 

BlackholeDivestment's picture

...fun Summer? Hello Tank Man. http://www.youtube.com/watch?v=s9A51jN19zw&feature=relmfu ...but this time is different. Lol.

BudFox2012's picture

Don't worry, the prestitutes at CNBC will come up with something to save the day tomorrow.  How about the headline "Cramer Pulls Head Out of Ass, Sees Shadow, 6 More Weeks of Bull Market"

Yes_Questions's picture



Sure would beat his hungover ass this morning

atomicwasted's picture

I have a new job and have to get up 30 minutes earlier to get there.  I am used to 7 am CNBC.  WTF is up with Cramer on the 6:30 show?  CNBC has been sliding badly for a couple of years but that takes the cake.  I don't need to deal with that level of propaganda at 6:30 in the fucking morning.  It's bad enough that my wife insists on watching that bullshit American pravda that is the "Today" show at 7 ish in the morning.  

Eireann go Brach's picture

Obama just got this text from Timmay and dropped his chicken wings!

infiniti's picture

I'm buying the fuck out of futures tonight for the forthcoming 50+ point rally in NQ over the next few days, then selling. Hoping silver also drops, might start nibbling on coins.

devo's picture

Blah blah you can't eat federal reserve notes either. blah blah.

Tijuana Donkey Show's picture

I can wipe with them. That's really dirty money

The Alarmist's picture

After which you can chuck them in the wash-machine and dryer so you can use them again. Can't do that with a Euro note. Imagine, money laundering for the masses.

infiniti's picture

If you wiped with FRN's, would your asshole expand by 3% annually?