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QE-Off, Reality-On But Merkel/Van Rompuy Save The Day (For Now)

Tyler Durden's picture





 

UPDATE: ES at day's highs - alone in its exuberance relative to risk assets.

We watched, we dipped, and then we ripped. Disappointment at no new QE drove Silver down first, then Oil and then the rest of the risk basket tumbled notably. EURUSD dumped 60pips, ES dropped 7-8pts to Monday's close, Treasury Yields dropped 6-7bps, Commodities (Gold, Silver, Oil, Copper) all fell 1-2% (with Silver worst). But then we ripped as Van Rompuy and Merkel started chatting about some progress in Europe. This pulled EURUSD up to unch, Gold and Silver retraced half of their spike down, stocks recovered all of their drop and reached up to VWAP (rather conveniently) where selling volume re-appeared. Notably, only Treasuries remained near their spike levels. As we post, the recovery spike back up in risk assets is now fading. Now get your popcorn ready for Bernanke's presser. Finally, the issue with the European stick save, where Gollum mentioned Eurobond lite again, is that it is merely a regurgitation of news from Sunday, which Germany has already said Nein to: In The Case Of The World Vs Merkel, The Broke Prosecution Proposes Eurobonds Lite.

Cross asset class rebound...

but be careful as ES is merely back up to VWAP...

Charts: Bloomberg

 


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Wed, 06/20/2012 - 13:02 | Link to Comment Snakeeyes
Wed, 06/20/2012 - 13:15 | Link to Comment Jay Gould Esq.
Jay Gould Esq.'s picture

The major U.S. indexes are well in the green as of this writing.

What an utterly dysfunctional market. "Price discovery" is now nothing more than a quaint, old-fashioned notion.

Wed, 06/20/2012 - 13:23 | Link to Comment NotApplicable
NotApplicable's picture

Now, look at the size of those dips and just imagine how much wealth just changed hands at the margins. (hopefully all algobots engaging in cannibalism)

Wed, 06/20/2012 - 13:03 | Link to Comment Cursive
Cursive's picture

What else is there to say?  Ridiculous.

Wed, 06/20/2012 - 13:11 | Link to Comment bdc63
bdc63's picture

How on earth is the Euro/$ trading at 1.27?! ... unfreakinbelievable

Wed, 06/20/2012 - 13:14 | Link to Comment Cursive
Cursive's picture

@bdc63

Why?  Because they can.  The market has always been a rigged game in favor of the market makers.  They are having a field day rigging this shit.  But it won't last.  Nothing is forever and their hubris is about to catch up with them.

Wed, 06/20/2012 - 13:27 | Link to Comment NotApplicable
NotApplicable's picture

Given that it's merely a relative measure, they can make that number practically anything they want, within "reason."

Meanwhile, in absolute terms, prices of all non-paper things will continue to rise.

Got Things?

Wed, 06/20/2012 - 14:47 | Link to Comment q99x2
q99x2's picture

I don't have things but I have a lot of forks and knives and I'm motivated to start cutting something.

Wed, 06/20/2012 - 13:03 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

Quick!  Hit everyone's stop orders!

Wed, 06/20/2012 - 13:10 | Link to Comment HarryM
HarryM's picture

Board is Green

VIX<18

Score - Fed 80     ZH'rs - 0

Game over (as usual)

Wed, 06/20/2012 - 13:21 | Link to Comment Thomas Anderson
Thomas Anderson's picture

Van Rompuy and Merkel readies the ESM Bazooka... dud, and markets dive when The Bernanke begins to speak.

Wed, 06/20/2012 - 14:49 | Link to Comment q99x2
q99x2's picture

Board is Red again.

 

Game not over till Fat Lady sing.

Wed, 06/20/2012 - 13:04 | Link to Comment DavidJ
DavidJ's picture

So many twists and turns!

One day the drunken dancer will collapse!

Wed, 06/20/2012 - 13:06 | Link to Comment bdc63
bdc63's picture

Chinese Proverb: 'May you live in interesting times'

I don't know about you all, but I would LOVE a little boring right about now ...

Wed, 06/20/2012 - 13:13 | Link to Comment kridkrid
kridkrid's picture

Though there is debate over the origin, it's usually considered to be more of a curse than a proverb.  It works either way, I think.

Wed, 06/20/2012 - 13:21 | Link to Comment Mrmojorisin515
Mrmojorisin515's picture

It was exciting in 08, 09, and 10, but the past two years have been very boring

Wed, 06/20/2012 - 13:28 | Link to Comment NotApplicable
NotApplicable's picture

Drip...

drip...

drip...

Wed, 06/20/2012 - 13:04 | Link to Comment CreativeDestructor
CreativeDestructor's picture

Fed Bots are Busy.... 

Wed, 06/20/2012 - 13:04 | Link to Comment i_call_you_my_base
i_call_you_my_base's picture

Must be a coincidence.

Wed, 06/20/2012 - 13:04 | Link to Comment FXPortent
FXPortent's picture

Let's do the twist! And party and dance like it's 1999!

Wed, 06/20/2012 - 13:30 | Link to Comment NotApplicable
NotApplicable's picture

Yer avatar done hypnotized me!

0_0

Wed, 06/20/2012 - 13:07 | Link to Comment VonManstein
VonManstein's picture

merkel saved the day... riggghhtt.. considering we have been "expecting" carnage without QE im not sure a little merkeling could levitate things so much..

perhaps people are just fed up with dollars and bonds?? whos gonna buy these things if the FED wont buy them from you with more QE??

the market has to come round soon

Wed, 06/20/2012 - 13:12 | Link to Comment VonManstein
VonManstein's picture

gold pushing back at 1620.. and ZH is telling us this is merkel and rumpoy?? pfff dont think they can move markets like this anymore

Wed, 06/20/2012 - 13:04 | Link to Comment sharky2003
sharky2003's picture

I'm so tired of this song and dance. Someone please pull the plug already!!!

Wed, 06/20/2012 - 13:10 | Link to Comment bigwavedave
bigwavedave's picture

The House wins. JPM up 3.5% - 4%

Wed, 06/20/2012 - 13:05 | Link to Comment THECOMINGDEPRESSION
THECOMINGDEPRESSION's picture

We are really into QE 50. We will never ever know the truth..about anything.

http://www.economicaldepression.blogspot.com

Wed, 06/20/2012 - 13:06 | Link to Comment Lost Wages
Lost Wages's picture

What I've learned after watching the markets astutely is that the most boring thing possible will always happen. This stuff has lost its excitement. I'm going to go do something else.

Wed, 06/20/2012 - 13:05 | Link to Comment gjp
gjp's picture

Market doesn't give a flying fuck about bimonthly official announcements for the plebes.  Market gets free money every freaking day from its toadies at the central banks / government to support its stupid momentum short face-ripping games.

Wed, 06/20/2012 - 13:05 | Link to Comment BlandJoe24
BlandJoe24's picture

Have they ever presented something at the press conference that was very different from the official announcment?  In other words, is it possible that a bigger qe program will be announced at the press conference?

Wed, 06/20/2012 - 13:05 | Link to Comment Conman
Conman's picture

rally on - why again? oh well. just rally on. dow13k hat on.

Wed, 06/20/2012 - 13:07 | Link to Comment asteroids
asteroids's picture

In the last 24hours the market has gone absolutely..... nowhere. The FED did nothing, and won't do anything before Obama is thrown out of office.

Wed, 06/20/2012 - 13:11 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Right, to be replaced by Rhomney.  That's a good little sheep.  One party, for the banks and financial houses, by the banks and financial.  There is no "market" with mark to fantasy in place.  Price discovery, what's that.  The prices are set by TPTB.

ZIRP is fucking QE, unless you rally believe there is no cost for creating capital, especially when nothing of real value has been created.  Totally fucking stupid.  Printing to pay interest and save the banks and financial houses.  Failure and consequences are for you, not them.

Wed, 06/20/2012 - 13:13 | Link to Comment takeaction
takeaction's picture

Obama out of office....HAHAHAHAHHAHAHAHAHAHAHAHAHHAHAHAHAHA...yeah right.  This thing is so rigged.  Here are some facts for you.  300 million people in the USA..right?  Only 112 Million Vote.....47 million people on food stamps....promise those 47 million more FREE SHIT....or maybe $3 grand each....And we have a winner.  Then to top it off....just grant 1,000,000 illegal alien kids amnesty, and then they and their parents, and all of their relatives as a thank you vote for you know who?  If you give amnesty to 1,000,000 illegal kids, how many votes will that get you?  It is quite exponential.  I see what you did there Obama.  Good play.

Wed, 06/20/2012 - 13:07 | Link to Comment Spaceman Spiff
Spaceman Spiff's picture

Didn't operation twist really boost the market last year?  or was that the european solution/ltro that did that?

Wed, 06/20/2012 - 13:18 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

Er, Yes?

Wed, 06/20/2012 - 13:32 | Link to Comment Plymster
Plymster's picture

Operation twist boosted the market slightly, but the big shot was the LTRO combined with Fed liquidity swaps.  That way the Europeans could spread the risk around to the US as they bailed out their shitty banks.

Since the Fed already owns most of the long end of the curve, and the European piggy bank is queefing dust, there's no reason to buy a thing (except puts) right now, unless Bernanke unveils a new QE program at 2:30.  So who are these buyers and why are they buying?

Wed, 06/20/2012 - 14:02 | Link to Comment Spaceman Spiff
Spaceman Spiff's picture

Thanks for the clarification.    I need to write this stuff down to keep up with all the manipulations/interventions.  

Wed, 06/20/2012 - 13:08 | Link to Comment LawsofPhysics
LawsofPhysics's picture

No manipulation, none whatsoever.  < sarc off >

Wed, 06/20/2012 - 13:09 | Link to Comment caimen garou
caimen garou's picture

blah,blah,blah,blah,fools are saying anything to keep markets pumped

Wed, 06/20/2012 - 13:09 | Link to Comment HaroldWang
HaroldWang's picture

Fed left door wide open for QE. Europe door open for some sugar. Market can ONLY go up until this rhetoric changes. Until then, up, up we go!

Wed, 06/20/2012 - 13:10 | Link to Comment CvlDobd
CvlDobd's picture

Days like this give credence to robo's claims that Ben is the greatest central banker of all time. How the fuck they keep this many plates spinning is beyond me.

Ahfuckit

Wed, 06/20/2012 - 13:13 | Link to Comment bigwavedave
bigwavedave's picture

"There are no plates" -- The Oracle (paraphrased)

Wed, 06/20/2012 - 13:20 | Link to Comment CvlDobd
CvlDobd's picture

Oh, are these not the plates I'm looking for?

Wed, 06/20/2012 - 13:12 | Link to Comment I Am Not a Copp...
I Am Not a Copper Top's picture

Gold pop

Wed, 06/20/2012 - 13:26 | Link to Comment VonManstein
VonManstein's picture

check the fucking miners out..

this is the start of a big move... no more games

Wed, 06/20/2012 - 13:13 | Link to Comment falak pema
falak pema's picture

all this fast and furious market play is so sensitive to the lightest flutter of butterfly wings, one wonders why the tsunamis are not more frequent. 

Wed, 06/20/2012 - 13:16 | Link to Comment Father Lucifer
Father Lucifer's picture

Once the denial and shock subside we will see the true results of NO QE this year. ZH called it again, except that part about 4 year notes but all is forgiven in the name of

Wed, 06/20/2012 - 13:20 | Link to Comment daneskold
daneskold's picture

The simple math on this debacle is that the U.S. deficit spend of $1.7 Trillion annually is a MONSTOR QE.  After those dollars rattle through the system, they've got to land in someone's account.

 

Are we going to see deflation?

 

Not until that deficit spigot ends.

 

This $267 B Twist extension is a mere boil on the butt of that deficit spend.

 

You can be certain the Santa Obama is going to promise a few more $3,000 thingamajig credits to the masses quid pro vote for me in November.

Wed, 06/20/2012 - 13:59 | Link to Comment lemonobrien
lemonobrien's picture

that's the rest of the money til the deficit ceiling is hit; than we have real (direct) QE

Wed, 06/20/2012 - 13:20 | Link to Comment Village Smithy
Village Smithy's picture

ZIRP + high short interest = continuous short squeezing. Check Tylers' post FOMC chart, the market didn't peak until 2or 3 days after it was disappointed.  

Wed, 06/20/2012 - 13:21 | Link to Comment you enjoy myself
you enjoy myself's picture

the Bernanke put really is a modern marvel.  sick, but a marvel nonetheless.  i think i'm beginning to cave in my belief that it can't go on forever.  Ben really is just going to always hold a safety net under the markets, alternating bazooka devaluations between the Fed and the ECB as needed.  if you front-run it, great, then expectations alone sufficed.  if you get nervous and sell for over a week, then he steps in for real.  he can pull this shit off for years.

Wed, 06/20/2012 - 13:23 | Link to Comment TraderTimm
TraderTimm's picture

BTC 6.65 +0.150 (Daily)

Keep printing Ben, I wouldn't mind taking a vacation for a few months. Choices, choices...

Wed, 06/20/2012 - 13:24 | Link to Comment Splootch
Splootch's picture

All of this because gbp/usd have hit 1.5666 where is the magic 666 devils come back!

Wed, 06/20/2012 - 13:25 | Link to Comment risk.averse
risk.averse's picture

Merkel saves the day after the markets dive on dissappointing news from the Fed by *conveniently* releasing that bond purchases are now a "possibility". If you don't believe in coincidences then the only conclusion is that it's not just Swiss central banker's wives who are playing the markets. Hey, but I'm just a bitter and twisted cynic.

Wed, 06/20/2012 - 13:39 | Link to Comment Memphis10
Memphis10's picture

Well that was fucking nuts LOL

Wed, 06/20/2012 - 13:48 | Link to Comment Bastiat009
Bastiat009's picture

Gold down, euro up ... if only we could print gold, it would be much more valuable. :-)

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