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Perfectly Irrational Market Slides On News Spain Actually Not On Verge Of Default

Tyler Durden's picture




 

Within seconds of the non-news headline (via Bloomberg) hitting:

*EU SAYS IT'S NOT EXPECTING SPAIN AID REQUEST 'ANY TIME SOON'

The S&P 500 is crumbling, Oil is plunging, and EUR is selling off

 

which just as we tweeted:

 

 

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Thu, 08/23/2012 - 13:23 | 2730906 JeremyWS
JeremyWS's picture

Makes sense!

Thu, 08/23/2012 - 13:35 | 2730931 onelight
onelight's picture

Actually, Merkel just said that they would have to get the Troika visit report before they make ANY decision on Greece, and the Hollande remarked that he hoped Greece would stay in the union. 

Maybe it was just the Spain news, or perhaps the markets got a dose of Merkel ice water and suddenly recalled the feeling they had forgotten about while on vacation lo these many weeks..

In any case, the Euro can go higher, but for the moment it is decently extended intraday on the 4hr chart, and since gasoline and copper have been rolling back, and the DX finding footing, not a bad place to trim some, for the position adjusters out there.

Thu, 08/23/2012 - 13:29 | 2730938 vast-dom
vast-dom's picture

makes perfect sense: less prob of QE....heh....flip a 2-headed coin biyatchez!

Thu, 08/23/2012 - 13:43 | 2731005 NotApplicable
NotApplicable's picture

Good news sucks!

Thu, 08/23/2012 - 13:45 | 2731013 CClarity
CClarity's picture

And the S&P is on the verge of dipping below 1400 for the 30th time since first reaching 1400 on the way up back in July 1999!!!

Thu, 08/23/2012 - 13:51 | 2731040 vast-dom
vast-dom's picture

yes but to say SP is crumbling when it is anything above 800 is silly. SP has a 600 pt QE FUCK YOU BUFFER built in. Please people let's keep it all in perspective. 

And oil below $120 is yet another perfect example of central planning. 

Thu, 08/23/2012 - 13:56 | 2731049 CClarity
CClarity's picture

Couldn't agree more.  They're going to have a more difficult time controlling food prices.

Thu, 08/23/2012 - 14:02 | 2731059 CrashisOptimistic
CrashisOptimistic's picture

Actually the rationale would be that Rajoy is more a badass than anyone in Greece and will refuse any aid that has austerity requirements.

One must presume he knows his debt credit default swap profile is far more terrifying than Greece's ever was.  He can threaten default and knows they will flock to give him money, and will turn a blind eye to his refusal to adopt austerity.

Never, ever forget there are credit default swaps on all this shit.

In fact, if you're a peripheral country leech, you want your leadership to encourage swap creation to huge amounts, to enable you to play this terror card.

Thu, 08/23/2012 - 13:42 | 2730999 Itch
Itch's picture

oh, it all makes perfect sense, to market makers.

Thu, 08/23/2012 - 13:53 | 2731046 Element
Element's picture

Just wondering, has the EU ever been right about such things?

Thu, 08/23/2012 - 13:59 | 2731062 Itch
Itch's picture

I dont even pay attention to it anymore mate, its an ongoing joke. Whether right or wrong, they are doing one hell of a job of frustrating the market...call me a cynic, but thats got to be in the plans somewhere.

Thu, 08/23/2012 - 19:49 | 2732130 Offthebeach
Offthebeach's picture

What market? They are the market. It is us, the stupid primitive "money clinging " muppets that are frustrating them. Pretty soon the BIS, The Fed, ECB and henchlings will of had enough of our herding and call in the 440v direct current prods.

Thu, 08/23/2012 - 13:25 | 2730914 Boilermaker
Boilermaker's picture

Not REITS or the IYR. That shit is positive.  TA DA!

Thu, 08/23/2012 - 13:29 | 2730917 Cult_of_Reason
Cult_of_Reason's picture

There was another headline hitting at the same time.

 

*Romney: QE3 Wrong Way to Go - Fox Business

*Romney: Would Want to Have a New Fed Chairman - Fox Business

Thu, 08/23/2012 - 13:31 | 2730949 Haager
Haager's picture

So markets disagree with Romney? Do they call the funds back?

Thu, 08/23/2012 - 13:35 | 2730967 Cult_of_Reason
Cult_of_Reason's picture

Oil and copper have violently reversed down when this headline hit the wires -- without Helicopter Ben as a chairman the entire commodities complex is extremely overvalued.

Thu, 08/23/2012 - 13:38 | 2730981 Dr. Richard Head
Dr. Richard Head's picture

Increased volilitility due to increased credit creation at the hands of the Fed and all.

Thu, 08/23/2012 - 13:44 | 2731007 ParkAveFlasher
ParkAveFlasher's picture

Looks like the stern is finally breaking off the Titanic.

I know two commodities that survive the collapse of credit and consumption, and the rise in interest rates.

 

Thu, 08/23/2012 - 13:53 | 2731029 Cult_of_Reason
Cult_of_Reason's picture

Paul Ryan and John Taylor on QE2 and the Dual Mandate http://www.nationalreview.com/corner/254266/paul-ryan-and-john-taylor-qe2-and-dual-mandate-daniel-foster

Refocus The Fed On Price Stability Instead Of Bailing Out Fiscal Policy

http://news.investors.com/article/555234/201011301909/refocus-the-fed-on-price-stability-instead-of-bailing-out-fiscal-policy.htm?p=3

What do you think John Taylor as FOMC chairman means for commodities ("owning stuff") bubble?

Thu, 08/23/2012 - 13:56 | 2731048 ParkAveFlasher
ParkAveFlasher's picture

The question is what do you think John Taylor as FOMC chairman means for interest rates for the credit ("owing stuff") bubble.

ERGO, STACK THEM SHINIES

Thu, 08/23/2012 - 13:35 | 2730969 Dr. Richard Head
Dr. Richard Head's picture

Here is some insight on Rombama's Bain http://gawker.com/5933641

Thu, 08/23/2012 - 13:33 | 2730956 HelluvaEngineer
HelluvaEngineer's picture

If I didn't know that he is lying, that might convince me to vote for him.

Thu, 08/23/2012 - 13:38 | 2730980 Boilermaker
Boilermaker's picture

You mean like this from yesteday:

Reuters:  Consider keeping Bernanke, top Romney adviser says

Thu, 08/23/2012 - 13:45 | 2731016 Dr. Richard Head
Dr. Richard Head's picture

The high-fructose corn syrup population surely can't recal back to news of yesterday.  News cycles now chrun like HFT traded stocks.  Though putting some Prince Harry balls or Kim K-Cups in that news story and you may have a week's worth of sheep retention.

Thu, 08/23/2012 - 14:01 | 2731038 OldE_Ant
OldE_Ant's picture

Can I have cock and tits with my rewashed news story??

 I mean come on us slaves need something to wack off to to work our sugar highs off before we go back to our slavery.

I mean this shit is like an old used hooker that now does blowjobs for pocket change.  Not long enough, not good enough, and completely frustrating no matter how experienced she is.

End of Line

Thu, 08/23/2012 - 14:04 | 2731086 optimator
optimator's picture

"Fire the boss"  thats a good one!

Thu, 08/23/2012 - 14:52 | 2731293 John_Coltrane
John_Coltrane's picture

Now just before Nov and to guarantee a crash in equities and commodities, Romney should make it clear the Bernake will be replaced with Paul Volker.  You know the guy that got interest rates to an all time high in the early 1980s and is a well know fiscal hawk!

Thu, 08/23/2012 - 13:25 | 2730918 lolmao500
lolmao500's picture

Bullish... oh wait I'm confused.

Thu, 08/23/2012 - 13:26 | 2730921 Big Corked Boots
Big Corked Boots's picture

Bullshitish.

Thu, 08/23/2012 - 13:30 | 2730928 Hype Alert
Hype Alert's picture

What's a market without a money pump?

 

So Europe having run out of anything actionable, gets some media outfit to repackage old stuff in ALL CAPS and flash it as breaking stuff

Maybe somebody just headfaked the algo's.

 

Thu, 08/23/2012 - 13:36 | 2730970 onelight
onelight's picture

...especially if you are also the ones that WRITE the algos...

Thu, 08/23/2012 - 13:28 | 2730929 The worst trader
The worst trader's picture

Tell me sweet little lies..... Romney crash just warming up for take off?

Thu, 08/23/2012 - 13:28 | 2730933 Flaming Ferrari
Flaming Ferrari's picture

It's a dip! Gear up! Draghi's got your back.

Thu, 08/23/2012 - 13:29 | 2730936 Dr. Engali
Dr. Engali's picture

Must...hold...1400..

Thu, 08/23/2012 - 13:39 | 2730986 Boilermaker
Boilermaker's picture

That's some psy-ops shit, right there!

Thu, 08/23/2012 - 13:30 | 2730941 malikai
malikai's picture

The whole thing makes perfect sense to me, as messed up as it is. All my models have been screaming this stuff the whole week.

Thu, 08/23/2012 - 13:31 | 2730943 Howdan
Howdan's picture

Eh?? Nothing makes any sense anymore - the "market" (cough ,cough....FED) moves up on bad news in hope of QEx then drops on good news i.e Spain not requesting a bailout.

All correlations seem to have completely broken down, HFT's and Algo's are whipsawing the market around in bizarre directions and Central Banks are artificially maniplating bond prices, currencies, rates you name it.

It's actually sickening how dislocated markets are nowadays and how tough it is to trade properly or take a view

Thu, 08/23/2012 - 13:39 | 2730987 Hype Alert
Hype Alert's picture

The only way this Frankenstein of a market keeps standing is with jolts of electricity from the CB's.  If they continue the jolts, it will die and if they stop, it will cease to wiggle about.

Thu, 08/23/2012 - 14:27 | 2731178 Father Lucifer
Father Lucifer's picture

Obviously we have passed through the looking glass.

Thu, 08/23/2012 - 13:31 | 2730946 NEOSERF
NEOSERF's picture

Translation: Rajoy is not accepting the terms of the first $100b...hard to imagine the terms of the next $500b

Thu, 08/23/2012 - 13:32 | 2730950 falak pema
falak pema's picture

this reminds me of the mIC syndrome blues when the CIA realised it had nobody to play hardball with, once the KGB and USSR had collapsed. 

"QUick find me a new enemy; anybody, everybody, rogue states! renegade saudi, any cockroach under the crack!" 

You can practically hear Draghi screaming over the phone : "I need a new crisis to pump to infinity. I need a sovereign saying ...help or I die!"

Irrational but so true! 

Thu, 08/23/2012 - 14:28 | 2731187 Juan Wild
Juan Wild's picture

we are the enemy. we always have been. when people ponder this it will all become so painfully clear. everything will finally make sense. that's the threshold moment, when you must choose between light (very painful) and dark (comfortably numb).But you know that already ;)

Thu, 08/23/2012 - 13:34 | 2730963 diogeneslaertius
diogeneslaertius's picture

raw inputs

and ignore holograms or SPIN

Thu, 08/23/2012 - 13:36 | 2730971 Mcwop
Mcwop's picture

In Europe, you can always find bailout promise. In Soviet Russia, bailout promise finds YOU!

Thu, 08/23/2012 - 13:41 | 2730993 Juan Wild
Juan Wild's picture

They make up news as they go along. Then wait for the dupes to place their bets...and then predatory algo time kiddies!!!
rinse, repeat. MM's gone WILD. Not just Knight,mind you. All of them. PREDATORY. No wonder buy and hold has gone extinct. Hello SEC, gonna do anything about it????? Don't you think we all know whats going on??? sheeeeeesh.

Thu, 08/23/2012 - 13:42 | 2730994 scatterbrains
scatterbrains's picture

plunge?  maybe at 1100 /es which I think is on deck.

 

edit: my bad "crumbling"  for sure. The plunge is coming.

Thu, 08/23/2012 - 13:41 | 2730996 buzzsaw99
Thu, 08/23/2012 - 13:41 | 2730997 Dr. No
Dr. No's picture

Spain is even late to their own default!!

Thu, 08/23/2012 - 13:52 | 2731044 markar
markar's picture

manana

Thu, 08/23/2012 - 13:44 | 2731006 Abraxas
Abraxas's picture

Can we replace the colorful charts with pictures of run-ups to Miss Venezuela? Please?

Thu, 08/23/2012 - 13:46 | 2731022 Juan Wild
Juan Wild's picture

i second that!

Thu, 08/23/2012 - 13:48 | 2731025 Dad Was Right
Dad Was Right's picture

I feel like we may be at an inflection point. I was short term bullish yesterday after the FOMC minutes (even stale as they may have been) and I expected the algos to produce a strong bounce yesterday and today. After the terrible China MFR PMI last night I was conflicted. Combine that with Romney's comments today (not a supporter of new QE), and the ES futures sliding below 1400 at the moment, and It sounds bearish. I thought the bad US employment this morning would get everybody on the QE rally again. (is that intuitive or counter-intuitive? I lost track). If we don't see a strong last hour rally today, based on the bad news is good news rally conditioning, I feel like we are going down. At least until Bernanke talks it up again at Jackson Hole Aug 30. If we don't get that, and/or the German court rules negatively in the ESM in Sept. then I will position for a mid to long term bear in equities and the Euro.

Any thoughts?

Thu, 08/23/2012 - 21:20 | 2732316 ZeroAvatar
ZeroAvatar's picture

Just one:  Don't be long over the weekend!

 

No, seriously.  All last week, the Dow kinda just hung around at 'even'.  It felt like the roller coaster had just hit the top, and was moments away from the big plunge.

 

This may simply be a 'technical-induced' algo pullback.  It seems like MUCH, MUCH, more, though.  The SUDDEN about- face, the gold/silver moonshot:  something BIG is in the works, War, JPM scandal, QE3 announcement, something.  The big boys have got the word, and are putting their fiatskis on the appropriate chessboard squares.

Thu, 08/23/2012 - 13:48 | 2731026 q99x2
q99x2's picture

Booboo rumor. Market all fall down. Sleep now.

Thu, 08/23/2012 - 13:51 | 2731041 Piranhanoia
Piranhanoia's picture

The bendovers have demanded QE, they have paid for it with their belief in the great ben.   Therefore it shall be, for they are all that is left of the wandering ass in the desert, or something.

Thu, 08/23/2012 - 13:56 | 2731051 Curtis LeMay
Curtis LeMay's picture

 

EU SAYS IT'S NOT EXPECTING SPAIN AID REQUEST 'ANY TIME SOON

 

Is that right??

"The favoured option being discussed is that the existing European rescue fund, the EFSF, would purchase Spanish government bonds at primary auctions while the European Central Bank would intervene in the secondary market to lower yields, the sources said.

No specific figure for aid has been discussed in the talks, which started several weeks ago, sources told Reuters" - 8/23/12

http://www.business-standard.com/india/news/exclusive-spain-in-talkseuro-zone-over-sovereign-aidsources/183944/on

Every single apparatchick in Brussels is a liar.

Thu, 08/23/2012 - 14:07 | 2731099 Dr. No
Dr. No's picture

Considering the ECB chooses their words carefully, we should read the headline for what it is:

 

The ECN is not expecting....

 

Since CB are famous for not anticipating events, the statement means nothing in regards to the timing.

Thu, 08/23/2012 - 14:21 | 2731150 Curtis LeMay
Curtis LeMay's picture

I see. So the Brussels Politburo and Spain were all discussing who has the best Sangria, all these weeks?

Thu, 08/23/2012 - 13:58 | 2731056 Mountainview
Mountainview's picture

In Spain banks need help!!! The bad bank needs help!!! The regions need help!!! The Gov. as such is in a better debt position than France...but the needy ones are looking to the Gov. to help them out...what a mess!!!

Thu, 08/23/2012 - 13:58 | 2731060 The worst trader
The worst trader's picture

1:30 PPT? couldn't wait till 3? No 1% corrections allowed! BTFD again.......

Thu, 08/23/2012 - 14:09 | 2731110 Bastiat009
Bastiat009's picture

"Spain not on verge of default" ... you mean Spain has already defaulted?

Thu, 08/23/2012 - 14:29 | 2731191 rsnoble
rsnoble's picture

Does anyone around here know how to read a chart? There were only 5 million significant trendlines and resistance levels marking the top just a couple days ago.

If it weren't for the looming fed bs this market would be dropping like a rock and still might. There's a ton of overhead resistance right here technically it would be very difficult to break thru. However with all thats happend I won't be an idiot and say it's not possible. 80/20.

Thu, 08/23/2012 - 14:44 | 2731260 pragmatic hobo
pragmatic hobo's picture

BTFD

Thu, 08/23/2012 - 14:48 | 2731281 The Count
The Count's picture

Stupid question:

Aren't CDS just yet another ponzi game? So what I you 'insured' yourself against a Spanish default. Who is gonna cough up the billions and billions of CDS claims?

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