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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


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Tue, 05/08/2012 - 22:33 | 2408828 TravsMom
TravsMom's picture

Face. Melt.  Should be a fun summer.

Tue, 05/08/2012 - 22:35 | 2408838 BudFox2012
BudFox2012's picture

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

Tue, 05/08/2012 - 22:51 | 2408861 strannick
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.

Tue, 05/08/2012 - 23:13 | 2408958 DoChenRollingBearing
DoChenRollingBearing's picture

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

Wed, 05/09/2012 - 00:04 | 2409045 flacon
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! 





Wed, 05/09/2012 - 00:29 | 2409076 Nobody For President
Nobody For President's picture

Amazing! Thanks.

Wed, 05/09/2012 - 01:08 | 2409132 Oh regional Indian
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.



Wed, 05/09/2012 - 01:26 | 2409151 peter4805
peter4805's picture

She can work on my pole any time she desires.

Tue, 05/08/2012 - 23:49 | 2409022 Comay Mierda
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

Wed, 05/09/2012 - 10:04 | 2409141 cranky-old-geezer
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.

Wed, 05/09/2012 - 03:09 | 2409259 ffart
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.

Tue, 05/08/2012 - 23:15 | 2408969 covsire
covsire's picture

Someone help me out, where is the money going?

Tue, 05/08/2012 - 23:43 | 2409011 mt paul
mt paul's picture



choose your poison ...

Wed, 05/09/2012 - 00:10 | 2409053 flacon
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!

Wed, 05/09/2012 - 02:00 | 2409175 GMadScientist
GMadScientist's picture

Nitrous Oxide.

Wed, 05/09/2012 - 07:16 | 2409400 bentaxle
bentaxle's picture

And Bank of America's begging bowl...

Tue, 05/08/2012 - 23:45 | 2409017 ceilidh_trail
ceilidh_trail's picture

Money Heaven

Wed, 05/09/2012 - 00:47 | 2409107 spdrdr
spdrdr's picture


Wed, 05/09/2012 - 01:17 | 2409136 derek_vineyard
derek_vineyard's picture

alt + ctrl + del

Wed, 05/09/2012 - 08:07 | 2409469 WmMcK
WmMcK's picture

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

Wed, 05/09/2012 - 00:10 | 2409052 DeadFred
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.

Wed, 05/09/2012 - 00:22 | 2409068 rzero
rzero's picture

Someone help me out, where is the money going?

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

Wed, 05/09/2012 - 00:32 | 2409086 Nobody For President
Nobody For President's picture

Not into my account.

Wed, 05/09/2012 - 00:26 | 2409073 CvlDobd
CvlDobd's picture


Wed, 05/09/2012 - 00:46 | 2409108 msamour
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.

Wed, 05/09/2012 - 01:46 | 2409164 Likstane
Likstane's picture

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

Wed, 05/09/2012 - 02:42 | 2409198 atomicwasted
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.

Wed, 05/09/2012 - 08:33 | 2409520 Ranger4564
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.

Wed, 05/09/2012 - 01:33 | 2409156 cranky-old-geezer
cranky-old-geezer's picture



Someone help me out, where is the money going?

From losers to winners.

Wed, 05/09/2012 - 01:45 | 2409162 Reverse Split
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.

Wed, 05/09/2012 - 02:01 | 2409177 Clashfan
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...

Wed, 05/09/2012 - 03:47 | 2409308 flyingpigg
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...

Tue, 05/08/2012 - 22:56 | 2408897 jmcaule4
jmcaule4's picture
This simple indicator nailed the bottom of the market today! $RUT vs $SPX in action $IWM $SPY
Wed, 05/09/2012 - 01:52 | 2409167 Western
Western's picture

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

Tue, 05/08/2012 - 23:21 | 2408983 tempo
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.

Tue, 05/08/2012 - 23:21 | 2408986 vast-dom
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. 

Wed, 05/09/2012 - 01:57 | 2409173 BlackholeDivestment
BlackholeDivestment's picture Summer? Hello Tank Man. ...but this time is different. Lol.

Tue, 05/08/2012 - 22:35 | 2408831 BudFox2012
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"

Tue, 05/08/2012 - 23:23 | 2408990 Yes_Questions
Yes_Questions's picture



Sure would beat his hungover ass this morning

Wed, 05/09/2012 - 02:45 | 2409202 atomicwasted
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.  

Tue, 05/08/2012 - 22:34 | 2408833 Eireann go Brach
Eireann go Brach's picture

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

Tue, 05/08/2012 - 22:36 | 2408842 infiniti
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.

Tue, 05/08/2012 - 22:39 | 2408852 mcguire
mcguire's picture

cant eat silver..

Tue, 05/08/2012 - 22:48 | 2408875 devo
devo's picture

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

Tue, 05/08/2012 - 22:51 | 2408882 Diet Coke and F...
Diet Coke and Floozies's picture

Yes you can...

Tue, 05/08/2012 - 22:57 | 2408896 Tijuana Donkey Show
Tijuana Donkey Show's picture

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

Tue, 05/08/2012 - 22:59 | 2408906 The Alarmist
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.

Tue, 05/08/2012 - 23:47 | 2409018 infiniti
infiniti's picture

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

Tue, 05/08/2012 - 23:30 | 2409000 balz
balz's picture


Wed, 05/09/2012 - 05:31 | 2409342 TWSceptic
TWSceptic's picture

Actually you can, and eating silver has potential health benefits too:

Tue, 05/08/2012 - 22:39 | 2408848 l1b3rty
l1b3rty's picture

Here we are again, below thirty and staring $26 in the eye. In U.S. trading today, silver touched on $29.40, easily breaking through the touch-and-go (up) point of the prior day at $29.70. Today, $29.70 barely existed, and straight down to $29.40 the metal went. Now, in the aftermarket, silver is taking another beating down towards $29.00, sitting currently (6:30pm pst) at $29.23. I expect the metal will bounce off this number for now, but could easily be taken down through it later on in Asia.

$26.00 is the next medium-term considerable support once the metals breaks through $29.00, as the yearly chart below will help demonstrate by showing the movement in the market over the past 14 months. You see how in March, September & December the metal was buoyed at that $26.00 price.

Tue, 05/08/2012 - 23:25 | 2408994 Prometheus418
Prometheus418's picture

I don't know that there were many folks who weren't expecting this.  It's similar to what happened to all commodities in 2008- if things play out the same way this time, I'll be looking forward to the (relatively) cheap gas, groceries and metals.

This is all rinse-and-repeat.  I was in copper in 2008, and it was unsellable at any price for a few months- but it didn't take long to bounce back.  Same thing here- either the central banks fire up the QE again, and we see new highs sooner rather than later, or the politicos decide it's time for austerity for all- and how likely do you think that is in an election year?

For my part, I hope silver falls hard over this summer- I don't have a huge amount of dry powder, but I'd be happy enough to add another couple hundred ounces on the cheap- and maybe even add a little gold to the stack.  If it stays cheap, my kids will get a nice coin collection some day.  

Those here who are traders already know what to do, but here's a reminder for the rest of the regular folks- when everyone else is selling, that's the time to buy.  When everyone else is buying, by all means- sell.  Don't be one of those fools that panics and sells for less than you bought for- if you have some coins, just leave them where they are until the price recovers.  Nothing has changed here, and it's just the other shoe dropping, as expected.  

Might be a good time to remind folks that ZH has been pointing out that the markets are irrational and broken for ages now- so if you got the message, and stayed off margin, there's no reason to panic, or even really care much.  PMs were never a good day trade.

Wed, 05/09/2012 - 00:14 | 2409059 Jim in MN
Jim in MN's picture

Real assets, and patience.  That is all that matters.  Until the collapse that is.  But if you think we can make it intact as a society, real assets and patience will get you through.

The panic is for those who are tied to the notion that stocks return 8% per year on average forever.  The harsh reality is that because of corruption and Japanification/zombification of the financial tumor, er, sector, we have a permanent drain of cash to the global elite that knocks about 1-2% off of GDP per year and eliminates any chance of real (inflation-adjusted) positive returns on stocks or bonds over the long term.  Bill Gross and many others have confirmed this framework.

In other words, you'll only get to keep what you yourself save, and that only with luck and strategy.  Zero real returns means savings must rise and leverage (debt) must fall.  Some gold and related real assets will provide a good hedge and potential real returns, or at least the staying power to avoid terminal paper asset collapse.  Just wait until interest rates are 10% and the Dow:Gold ratio hits 1:1 at about 5,000 each.  That'll be fun.  Not looking forward to it personally, whatever my portfolio happens to be.

Good luck and God bless.

Tue, 05/08/2012 - 22:40 | 2408853 lsbumblebee
lsbumblebee's picture

Naturally that maven of a safe haven of wes craven nightmare the dollar hits 80 again. 

Tue, 05/08/2012 - 22:39 | 2408854 Godisanhftbot
Godisanhftbot's picture

 I always wondered why there were so many SELLERS of gold.  If it's so wonderful ,it should be hard to buy, not trivially easy.

 And the folks that 'print' gold cheap, the 'myners' they are getting their asses kicked.


 Just goes to show ya.


Tue, 05/08/2012 - 22:59 | 2408903 CryingBear
CryingBear's picture


Tue, 05/08/2012 - 23:23 | 2408991 jimmyjames
jimmyjames's picture

I always wondered why there were so many SELLERS of gold.  If it's so wonderful ,it should be hard to buy, not trivially easy.

 And the folks that 'print' gold cheap, the 'myners' they are getting their asses kicked.


 Just goes to show ya.


I've always wondered why people who dont know what they're talking about bother talking-

If gold was hard to buy or sell-it wouldn't have the liquidity that makes it so attractive to own--no?

Gold producers are reporting record profits and raisng dividends-maybe if you looked you would know this-



Tue, 05/08/2012 - 22:41 | 2408859 Caviar Emptor
Caviar Emptor's picture

There's no need to worry. We're living in a freekin utopia. Trust Mr Market, Trust the Fed and Trust your Uncle Warren.

Tue, 05/08/2012 - 22:43 | 2408860 Father Lucifer
Father Lucifer's picture






Tue, 05/08/2012 - 23:12 | 2408948 Cursive
Cursive's picture

@Father Lucifer


STFR ^ 64

Tue, 05/08/2012 - 22:44 | 2408863 pleseus
pleseus's picture

This overall selloff is going to last a while, couple months at least.

Tue, 05/08/2012 - 22:45 | 2408867 The trend is yo...
The trend is your friend's picture

will it be 1280 or 1150 on the spx before we get qe4?

Wed, 05/09/2012 - 00:15 | 2409063 THX 1178
THX 1178's picture

Did I miss QE3?

Wed, 05/09/2012 - 00:30 | 2409080 CvlDobd
CvlDobd's picture

Operation ZIRPTwistLTRO

Wed, 05/09/2012 - 00:31 | 2409082 WonderDawg
WonderDawg's picture

Yes, but don't feel bad, so did most everyone else. It's ongoing, behind the curtain.

Wed, 05/09/2012 - 00:59 | 2409120 THX 1178
THX 1178's picture

Oh yes... so the next out-in-the-open QE should have almost no influence at all... or maybe only for a few days? then markets are back down and commodity prices are higher than ever? We're boned.

Tue, 05/08/2012 - 22:48 | 2408873 I should be working
I should be working's picture

Futures are at 1354, this hardly consitutes a blood bath, 5.2% down from the yearly intraday high. Yawn...

Good time to buy growth stocks, I have never seen so many gap from a 52 week high to a 52 week low.  All you chart readers will be out of business soon, all I see is step functions...

Tue, 05/08/2012 - 22:58 | 2408900 Conman
Conman's picture

Yup great time to buy growth stocks like GMCR and NFLX.


Tue, 05/08/2012 - 23:00 | 2408907 midgetrannyporn
midgetrannyporn's picture

Go Greek or don't go at all. [/sarc.]

Tue, 05/08/2012 - 23:58 | 2409037 ceilidh_trail
ceilidh_trail's picture

Yup- don't forget AZO and AMZN! Where's the deer? That'll be shopping time. In the meantime, ABC says things 're lookin up!

Tue, 05/08/2012 - 22:53 | 2408884 Banksters
Banksters's picture

Ben Bernak here, and I've got infinty fiatscos.   Me and da boys gonna print it all good.   


Fuck the savers!



Tue, 05/08/2012 - 23:32 | 2409003 Yes_Questions
Yes_Questions's picture



please sir, may we have another (sub prime lending spree)?

Tue, 05/08/2012 - 22:54 | 2408892 tom a taxpayer
tom a taxpayer's picture

Is that the EURUSD chart or Disneyland Europe's new rollercoaster ride?

Tue, 05/08/2012 - 22:56 | 2408894 jmcaule4
jmcaule4's picture


This simple indicator nailed the bottom of the market today! $RUT vs $SPX in action $IWM $SPY
Tue, 05/08/2012 - 22:56 | 2408895 chump666
chump666's picture

The thing is everyone has expected a correction, that being in May sell off, technically the market is breaking supports at all levels - the bids will soon dry up, HFTS will start to panic.  So we get a crash, but, something terrible could be brewing.  As ZH has being pointing out since forever, is the market overall is broken, the bond markets are broken, the CDS market is broken, the liquidity markets are broken and finally governments are breaking apart =


Wed, 05/09/2012 - 00:30 | 2409081 THX 1178
THX 1178's picture

Everything in 3 sentences. Well said... =+1

Wed, 05/09/2012 - 01:06 | 2409127 chump666
chump666's picture

thank you.

Wed, 05/09/2012 - 01:09 | 2409131 Non Passaran
Non Passaran's picture

Or in one: shit is fucked up and bullshit.

Tue, 05/08/2012 - 22:57 | 2408901 Seasmoke
Seasmoke's picture

well looks like there is nowhere else to run to !!!!

Tue, 05/08/2012 - 23:00 | 2408905 CryingBear
CryingBear's picture


Tue, 05/08/2012 - 23:02 | 2408917 xtop23
xtop23's picture

We touch Ag of $27 and I'll probably dive in fairly big.

Wed, 05/09/2012 - 08:11 | 2409477 Widowmaker
Widowmaker's picture

And ill probably watch you sob like a banker down to 11.

Wed, 05/09/2012 - 12:21 | 2410240 xtop23
xtop23's picture

I'm buying physical not on margin. All the spot price means to me is an entry point.

Every time we hit a nice dip I'll buy and smile about it. 

Sub- $32 Ag for me is a no brainer buying opportunity.

Tue, 05/08/2012 - 23:03 | 2408919 Dorky
Dorky's picture

Can anyone tell me which credit markets to look for comparison? HYG? JNK? IEF? TLT?


Tue, 05/08/2012 - 23:04 | 2408922 Orly
Orly's picture

Watch for the sharp reversal at 1.29 on the EURUSD.  The pair is falling toward a Fibo-level that is higher than the down-craft channel.  Either it bounces cleanly off the 1.29-level or the next stop could be 1.2815 and a definite shock to the system.

This will be interesting.  Frankly, I'm putting my money on a break below the Fibo and a "stitching" of the channel wall to the downside, perhaps to the 1.28-level or slightly lower.  Anything past the 1.29-level, though, is getting into rubber-band territory, so the lower it breaks, the faster it will take your face off on the way back.


Tue, 05/08/2012 - 23:04 | 2408924 ekm
ekm's picture

From Zerohedge we learned it's about the Flow, not the Size (enter jokes here.....)

For the serious talk, it means that Primary Dealers may have had the dollar tap from the Fed turned off by orders of WH or Congress.

Problem for them: Nobody to dump the worthless BAC and JPM shares to. A huge vacuum is created underneath. Only one trader, the Fed.

The bottom of Niagara Falls seems clearer and clearer.

Wed, 05/09/2012 - 00:31 | 2409088 DeadFred
DeadFred's picture

It's an interesting and somewhat humorous idea to think that the WH or Congress tell the primary dealers or the Fed what to do.

Rule #1:

The banks control the government, not the other way around

Tue, 05/08/2012 - 23:06 | 2408928 EclecticParrot
EclecticParrot's picture

An asteroid the size Greenland could be within an hectare of hitting North America, and the algo dorks would still hit the "execute" button for their mid-day buy programs.  Sarkozy could dump his secret stash of high grade Greek olive oil into the Seine, leave his wife for Angela Austerity and attack Hollande's privates wilth a weed whacker, and still the afternoon market Lazarus act would continue.

We need sensible machines -- where's the Robot from Lost in Space when you need him? ("Danger!  Sell, Will Robinson, sell !")

Tue, 05/08/2012 - 23:25 | 2408996 Global Hunter
Global Hunter's picture

Holly from Red Dwarf

Tue, 05/08/2012 - 23:57 | 2409035 Yes_Questions
Yes_Questions's picture




+Sensible machines

hopefully progammed with an appropriate sense of the laws:

  1. A robot may not injure a human being or, through inaction, allow a human being to come to harm.
  2. A robot must obey the orders given to it by human beings, except where such orders would conflict with the First Law.
  3. A robot must protect its own existence as long as such protection does not conflict with the First or Second Laws.


Wed, 05/09/2012 - 02:37 | 2409193 Maos Dog
Maos Dog's picture




0. A robot may not harm humanity, or, by inaction, allow humanity to come to harm.


And here is where the trouble begins....

Tue, 05/08/2012 - 23:13 | 2408950 chump666
chump666's picture

If we are talking about FX risk indicators, I am looking at the AUD.  Say it retraces 1.01 from there it then slams through parity...and could pretty much collapse.  Only because the AUD selling has been happening with the Asia selling a week or so back before the Greek/French elections.  Still got my money that the filtered panic in the markets is coming out of Asia on the back of bad news from India/Indonesia and now China (political tensions)

Summary, major shorts could pile up on commodities currencies and Asian bonds/stocks. That would so much be worst/bear news than the European's clowning around.

Tue, 05/08/2012 - 23:14 | 2408959 the grateful un...
the grateful unemployed's picture

Hollande and Obama are blood brothers. we don't like the Germans much on principle, but we like to do business with them (Prescott Bush) until they offend the international community (the horror!) by expressing their power. then we turn against them (import their scientists before the war even turned against Hitler, their artists before the war) and as someone said Sarkozy was Vichy? now maybe Hollande may decide that there are no more troops for the NATO mission (NORTH ATLANTIC TREATY ORGY) in SE Asia, but what mission? Sarkozy kicked in on Libya, do you suppose that put him under? the Brits do anything they want, still having a royal family and all. so do the Japanese? what is about these island countries?

Tue, 05/08/2012 - 23:28 | 2408995 Global Hunter
Global Hunter's picture

island countries?  Sri Lanka is important too...cause its about the tea

Tue, 05/08/2012 - 23:56 | 2409031 JenkinsLane
JenkinsLane's picture

mmm, lovely tea....

Tue, 05/08/2012 - 23:20 | 2408982 lolmao500
lolmao500's picture

Euro is going down, bullish for the US dollar and bad for commodities.

Tue, 05/08/2012 - 23:35 | 2409006 Joe The Plumber
Joe The Plumber's picture

The deflation monster cant be stopped, not by the timid lot at the Fed, ECB, and MOF.

He may sleep ocasionally.
He is waking up again

Tue, 05/08/2012 - 23:57 | 2409032 wee-weed up
wee-weed up's picture

Shit... meet Fan.

Tue, 05/08/2012 - 23:59 | 2409036 I am a Man I am...
I am a Man I am Forty's picture

Europe Schmeurope, amerika will save the day just like today

Wed, 05/09/2012 - 00:08 | 2409051 orangegeek
orangegeek's picture

We overlaid gold and the gold bugs index (all major gold mining stocks included in this index).


The question of why the divergence between the two appears to be getting answered.

Wed, 05/09/2012 - 00:15 | 2409061 JR
JR's picture

Speaking of crashes...

Crash Dive at WaPo | Economic Policy Journal | May 8, 2012

Forbes has the details:

"The Washington Post Co. reported its first-quarter earnings on Friday, and the news coming out of the newspaper division was mostly grim. The unit lost $22.6 million in the quarter, with revenue down 8% and revenue from print advertising specifically falling 17%. 

"Meanwhile, the Post just reported one of the biggest circulation drops of any major newspaper with the lucrative Sunday edition selling 5.2% fewer copies and the daily edition skidding almost 10%. Oh, and newsroom leaders are so distressed about the way the business decline is affecting them, they held a secret meeting with the paper’s president, Steve Hills — without inviting executive editor Marcus Brauchli."

Wed, 05/09/2012 - 00:36 | 2409097 markar
markar's picture

To hell with the WaPo. NWO shills. Let them die.

Wed, 05/09/2012 - 02:56 | 2409219 atomicwasted
atomicwasted's picture

Good riddance to bad rubbish.  Hey, maybe if you stopped sucking the dicks of the powerful and actually committed acts of journalism people would still buy your stupid rag.  

Wed, 05/09/2012 - 00:17 | 2409064 Jim in MN
Jim in MN's picture

Unbullish for US firms with overseas earnings dependence, otherwise known as the S&P 500.

Our lovely Dollar is the leper with the least rot this week.  Still stinky though.

Bet the Chinese are fucking pissed as Hell right now.  At everybody.  Even themselves.

Wed, 05/09/2012 - 00:21 | 2409067 q99x2
q99x2's picture

Shazam Gomer. Judy Judy Judy Judy Judy Judy Judy Judy Judy.

Wed, 05/09/2012 - 01:16 | 2409137's picture

Fun fact: George Lindsey was Gene Roddenberry's first choice to play Spock.

Wed, 05/09/2012 - 00:26 | 2409075 upb
upb's picture

futures plunge until the free handouts continue!!!   more free handouts today  --->>> 

Wed, 05/09/2012 - 00:31 | 2409087 Pete15
Pete15's picture

Who will win deflation or the money printers stay tuned as the world turns...

Wed, 05/09/2012 - 00:49 | 2409104 LouisDega
LouisDega's picture

Look at that DXY. Tom O'Brien is having a woody as we speak.  The Dollar bull dude with that shit kicker hat was correct. 

Wed, 05/09/2012 - 00:49 | 2409112 Pete15
Pete15's picture

Oh fuck the dollar index, who gives a shit anymore are they really not going to print, will the printing not get worse each time, can they actually let deflation happen. NO

Wed, 05/09/2012 - 00:51 | 2409115 CryingBear
CryingBear's picture


Wed, 05/09/2012 - 05:54 | 2409357 TWSceptic
TWSceptic's picture

Set off caps lock and start using your brain.

Wed, 05/09/2012 - 00:57 | 2409117 Nobody For President
Nobody For President's picture

I ain't no chartist, but I'm polite to those that are, and they are all noting the major indexes are at the end of the left shoulder of a classic 'head and shoulder' pattern that started early in February - the Russell 2000 is clearest, but the S&P, Dow, and Nasdaq also show the same general pattern.

In the past, this apparently has not usually ended well - the left shoulder line drops down to the elbow or so...

Futures on FinViz are certainly pointing toward the elbow.

Stand UP, Hook UP, Shuffle to the Door...

I'm gettin' some TZA tomorrow morning (Yeah, I know, it is already tomorrow morning EST - screw you early-to-bed New Yorkers).

Wed, 05/09/2012 - 02:50 | 2409209 atomicwasted
atomicwasted's picture

Kudos to you for being polite to chartists, who I usually just call charlatans and kick their rhetorical asses.  How are those tea leaves and chicken livers working out for them?

Wed, 05/09/2012 - 01:02 | 2409121 q99x2
q99x2's picture

So far I've heard Roubini, Hendry and Faber say they were bullish on US equities. That is after the latest with the EU.

Maybe things are really bad. I mean really really bad such that there is no sense in saying anything else even if it is a lie.

Wed, 05/09/2012 - 01:05 | 2409126 delivered
delivered's picture

Been here with gold and silver numerous times over the past 5 years as with the first sign of trouble, everyone sells everything they can and dumps into the USD. Speaking of the USD, it really should be no surprise that it is rallying and will continue to do so. Just think about it. Japan is hell bent on devaluing the Yen in order to protect its export based economy (not to mention making sure they have enough exports to offset the increased imports of oil and gas as a result of shutting down nuclear faciliites). As for the Euro and Europe, no explanation needed here as this cluster fuck is just starting to come unwound. So between Japan and Europe, that's 40%+/- of the world's economy that have extremely weak outlooks for their currencies. So where to turn, well the BRICs offer some potential opportunities but limited as with Putin now back in power in Russia (and exerting his mighty fist to quell any uprising against his party), China still actively controlling the Yuan (from movements, external ownership, etc.), this leaves India and Brazil so maybe a little diversification in these two countries but the "float" with these two currencies is small. Austrailia and Canada might be interesting opportunities with resource backed economies but again, just too small to make much of a difference. So the only place to dump excess liquidity is the best looking horse in the glue factory, the USD. I would expect this trend to continue until everyone realizes they are on the same side of the trade with too much exposure in USDs and USTs. Once this happens, that's when the real fireworks will begin.

At this stage, the key issue with investing in PMs is patiences as I would expect it to be a rocky road for the better part of 2012. Every other CB is racing to devalue their currencies with Ben stuck for the time being (so by default, the USD increases in value). I've prepared myself for a down year or two in PMs and will take this opportunity to dollar cost average in at attractive entrance points. The Europe mess is going to take a long time to unravel which means that in the coming months, there will be more opportunities for down days than.

BTW and one final comment on the Greece situation is that I don't believe TPTB in Europe are worried about Greece leaving the Euro (basically a foregone conclusion). What they most fear is that Greece will leave and eventually succeed in bottoming up, clearing their balance sheet, and laying the foundation for growth. This is TPTB's biggest fear as if Greece is successful, the exodus will be rapid. Of course the biggest loser may be Germany which has piggybacked on the implied weakness in the Euro from allowing weaker parties to participate. So Germany's exports received a boost from leveraging their poor neighbors woes. It's no wonder that Germany wants to keep these parties in the Euro as if the GM is reintroduced, it will most likely increase sharply in value thus damaging the business environment for Germany's export driven economy.

The balance of 2012 is going to real interesting to watch as Europe's grand experiment fails, the BRICs accumulate "real" assets at an accelerated rate, and the wealth transfer from the indebted west continues without the sheepie in the US having any clue at all of what is occuring. This of course until they wake up one day and realize that they've been hoodwinked in the greatest caper of all time. May not happen this year, or next, or the year after but by 2020, this process should have run its course.

Wed, 05/09/2012 - 01:23 | 2409147 CryingBear
CryingBear's picture


Wed, 05/09/2012 - 02:40 | 2409196 delivered
delivered's picture

No denial here as I've been in gold since 2000 and look for the second leg of the bull market to run through 2020 at which point the world economies will most likely have rebalanced. Its going to take at least another five to eight years to work through these problems given the magnitude of Europe's problems (i.e., one country's problems solved per year). Also, by 2020, the stated US debt (not the fully accrued obligations which could exceed $100 trillion by 2020) will most likely be in the $24 trillion range against a real GDP of at best $18 trillion (without inflation, assuming 2.5% growth per year) resulting in a 133% debt to GDP ratio. This assumes of course that interest rates will remain extremely low. So just when Europe has worked through its problems, the world will look to the final two problems (i.e., US and Japan) and realize that the math just doesn't work. Too much debt against too few assets and too little cash flow.  

Not sure where you got the "decades" from as this implies a bull market through 2020, 2030, and beyond. I'm only looking at the bull market lasting for about another 5 to 8 years (or until these debt problems are finally resolved once and for all). Once the rebalancing of world economies occurs, the PM bull market will be over and it will be time to exit. So if I have to deal with these short-term valuation reductions for this year and next, no worries as I've dealt with them in the Spring of 2008, the fall of 2008, the spring of 2009, early 2010, etc. Just review the trends and you will see that every time a so called "world crisis" happens, starting with what now seem like completely insignificant worries over Dubai, Ireland, Greece, the Arab Spring, etc. compared to the current crisis in all of Europe, gold takes a hit. In a number of cases, the corrections where in excess of 20% but always recovered. The reason is simple and is based in one guaranteed fact of life. That is, the debt level of the the developed countries will be greater tomorrow that today which is greater than yesterday.

BTW and if you want to look at a bull market that has run its course, take a look at USTs. Thirty years and counting with bills yielding 0%, 10 yrs 2%, and 30 years 3+%. Forget PMs as the total value of PMs is insignificant to the USTs market. Any increase in interest rates is an absolute killer at this point as not only will it hammer interest rate sensitive markets (e.g., real estate) and drive US debt levels even higher, but the real cherry on the top of this sunday is that all of the investments held by retiring baby boomers parked in debt will all of a sudden, quickly drop in value as yields spike and the inverse relationship with the principal face value of the debt decrease quickly. And you think investors were pissed watching the stock market loss value. Watch what happens if 10 yrs adjust to normalized rates of 4% and 30 yrs to 6%. Of course you can always make the argument that they will hold these until maturity which of course means that you must be either an investment banker of politician.

The bottom line is that Washington is trapped in a debt death spiral and the Fed knows this. So my position is simple. Either inflate or default and let's get this over with as dragging the process out longer and longer, using unrealistic assumptions, is only going to create more problems until in the very end, it just crashes down. Greece is a perfect case study on what all countries with excess debt levels can expect to happen at some point. Just a matter of time and pressure.

Wed, 05/09/2012 - 07:50 | 2409452 Debugas
Debugas's picture

you are absolutely right - they should inflate or default. But having the history (Weimar republic in Germany vs greate depression in US) my guess is europe is too afraid to inflate and will devalue and ultimately default whereas US (being too afraid of depression) will inflate the debts out

Wed, 05/09/2012 - 02:54 | 2409218 atomicwasted
atomicwasted's picture

I don't care about AU and CA as much in terms of investment as in terms of sanctuary.  Sadly, they both have serious problems in that respect as well.

Wed, 05/09/2012 - 01:50 | 2409166 holsfhf
holsfhf's picture

damm ... just when you needed to fall back on this gold hedge it doesn't work ... and .... it's all gone .... oh well we still have our long bund position .. that will save the day ...  

Wed, 05/09/2012 - 01:54 | 2409169 robertocarlos
robertocarlos's picture

If the banks call in loans it will be all over?

Wed, 05/09/2012 - 02:22 | 2409186 uncle_vito
uncle_vito's picture

Good news on China trade numbers on Wednesday will zoom the market.  This ovrenight stuff will be discounted in the morning.

Wed, 05/09/2012 - 02:48 | 2409205 atomicwasted
atomicwasted's picture

NUGT calls, bitchez.  That's all I have to say.  You're fucking welcome.

Wed, 05/09/2012 - 03:16 | 2409262 Dre4dwolf
Dre4dwolf's picture

The sickness is spreading, the medicine didn't work.... lol like it even had a chance to work.


If they want to save the Euro, they have to do a mass European debt forgiveness/debt liquidation and put some debt free currency into circulation to relieve household/small business debt burdens and allow for enough currency to circulate so that the economies in question can come up for air and breathe..... sure there will be inflation... but that boat has already sunk.


The same thing will have to be done in America, I suspect it will be in the form of a mass mortgage/business loan forgiveness program funded by the fed.... or some kinda federal reserve direct instant refinance to 0% for all your debts program. / / / bypassing the banks essentially and RE-Buying them out of their counterfeit loans that have already been pre-paid in full ten times over.

Until something that drastic happens, the economy is only going to get progressively worst..........because unless Obama double the current national debt by 2014~2018 the USD is toast, that is unless Ron Paul gets elected (fat chance with all the voter fraud going against him), hes the only one with the economic sense to steer the titanic well enough to avoid a catastrophe that we cant ever recover from.


Believe what you want...... the markets are toast, Dow @ 2000 in 8 months time, unless that is... something changes......... we are on a road to mass capital destruction and Burnbanke spilled his apple juice all over the map.



Ask yourself this, if people are dumping euros into the USDUS bonds and the Euros become worthless...... who gets stuck with the worthless Euros....? USA does.... how is that going to impact the economy ? when the capital being held by the treasury is essentially worthless Zimbabwe dollars?


Dangerous waters ahead, batten down the hatches, swab to poop deck, thisir be bloodsucking crackens a starboard.

Wed, 05/09/2012 - 03:27 | 2409303 blueskies123
blueskies123's picture

The PPT will be working hard in the hours during premarket trading to do a meltup in futures so when the markets open today, they open in green territory and everything "bounces" back into normal trading as if Europe and its problems don't even exist.

Same as what happened Monday morning when futures were down much worse Sunday night until just an hour before market open.

Nothing to see here folks, move along and keep buying equities, especially AAPL!

The Fed will provide and keep everything in the green and melting up because it can't let the  markets go down for more than 1 or 2 percent lest things spiral out of control.

Wed, 05/09/2012 - 04:18 | 2409322 blueskies123
blueskies123's picture

In fact, I just checked futures and they've already melted up since Europe markets have opened up recovering a portion of losses from yesterday.  So markets plunging is out news and so 2 hours ago.

So, I proudly predict that the US markets will open up across the board at least a .5% for each market (DOW/NASDAQ/S&P500).


Hoorah, gosh I feel like singing the national anthem now, our tax dollars at work to show the world that our economy is still strong and growing everyday, just like a ahem, the national debt!

Wed, 05/09/2012 - 04:51 | 2409329 cnhedge
Wed, 05/09/2012 - 05:37 | 2409349 Poor Grogman
Poor Grogman's picture



Dont Panic

The Bernank just had to dash out and change the printer cartridge, and grab a coffee.



Wed, 05/09/2012 - 07:37 | 2409427 The worst trader
The worst trader's picture

Buy the dip,buy the dip, buy the dip. and the machine will take the rest of your money. buy the dip you moron!

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