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In Renewed Push For QE3, Bank Of America Says EURUSD Squeeze Has Run Course, Sets New Short With 1.2510 Target
It is no secret that US banks are pushing hard for a big market dump: after all that is the only thing that could unleash QE either in Europe, or far more likely, in the US. Whether that means the Fed will much more aggressively monetize US or, as discussed yesterday European debt, remains unclear, but one thing is certain: US and European banks for the most part loathe the LTRO as it simply delays the day of printing and buys the banks time they don't need and can't afford. Which is why Bank of America, as it is the most exposed to a world without QE, was the first to jump in and demand the market crash itself, by presenting an FX note saying the EURUSD "squeeze has run its course" and is proceeding to sell the EURUSD at 1.3045 with a target of 1.2510. Whether or not the EURUSD gets there is irrelevant. What matters is that, as expected, the push for QE will be renewed with far greater vigor by the very entities that are supposed to benefit from the LTRO as paradoxically the banks now have to scramble to offset the favorable, if very short term, impact from the LTRO because they know it achieves nothing and the only savior is and has always been Ben.
Form Bank of America's MacNeill Curry:
Sell EURUSD, as the failure of risk assets to hold London AM strength bodes poorly for the US session.
We have seen a significant reversal overnight in EURUSD and risk assets generally. The EURUSD failure to attract new buying on the break of 1.3146 and subsequent Bearish Engulfing Candle on intra-day charts leaves a 3 wave, corrective rally off the Dec-14 lows. All this indicates the downtrend is resuming. While we have concerns about positioning and sentiment, the trend trumps all and it is still clearly to the downside. The squeeze has runs its course.
Sell EURUSD at market (now 1.3045) risking 1.3255, targeting 1.2510
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Ron Paul Foreign Policy Explained
http://djia.tv/ron-paul/ron-pauls-foreign-policy-explained/
Why does it give me the creepy-crawlies that RP has attracted Dow Jones' attention?
Sorry, this is kind of off-topic (but not really as it ties into a market smash which opens the door for more overt QE), but have any of the silver fans seen this? Is the door open now for one last big smash in silver and a chance for the crooks to cover their shorts?
Exemptions from position limits granted to guess who:
http://silverdoctors.blogspot.com/2011/12/cmecomex-grant-jpm-temporary-waiver-for.html
Nice find, and very well could be.
As long as outsized positions in the paper market are allowed, you can expect smash downs to occur. Those who have seen this time and again (e.g. Turd) know it's just yet another opportunity to buy the dips on PMs, as the fundamentals have not changed for them to continue to rise over time.
In fact, with the MF Global fiasco with customer's property stolen, it wouldn't surprise me to see the CME and the like become irrelevant in six months, as people flee the farce. So, by May 2012, this may be moot.
Bob Chapman said JPM had covered its silver shorts. I knew he was a senile old fool.
Question: Does BAC plan on still being in business when the pair is at 1.25?
How many funds below 5 needs to add extra margin for their leverage position in BAC ?...Infinite?
The blackswan is
or Bank of America or Societe Generale.
*
The problem is MS and Citigroup will follow it...so AFLOCKALIPSIS.....but the trigger will be UK, German or French downgrade....(Unavoidable)
and of course Chinese Banking System Fraud Leverage
Anything could be a 'trigger' at this point, pal. French banks will be nationalized without a doubt but I don't think it'll mean the end of 'markets'. I think China is about to send some shock-waves through Australia, Canada, and the rest of Asia...
take it from me ...EUR is going a lot higher....for about 2 weeks now
Citi, BOA, who still listens to these pennystock chuckleheads for advice?
The Obama Administration
Curry's mom did a bearish engulfing move on my candle.
Be careful what you wish for Mr. Moynihan.
Two things. First off thank god for the banks to give us all of these reports to rely on. Their frequent display of truthiness is welcomed.
Secondly, if as Alessio and everyone else currently points out Goldman rules the world, as well as these other banks...and they are begging for a market crash and QE3 then who is propping up the market?
Hmm...
I'm not sure I agree with this article.
1) how can we on the one hand say that the banks are pushing hard for a market dump... and on the other hand say they are trying to engineer a Santa Rally, or that they are trying to defend SP 1200, etc?? either the big banks are pushing the market up, or down... can't have it both ways.
2) Explain how LTRO is not covert QE if the ECB does not sterilize... IMO there is ample reason to believe that the ECB is covertly QEing right now using this LTRO. It placates the Germans who are against "printing" while they are "printing". The 3 year term makes it sound more definite than the squishy Amercian version of QE, whiich will please the Germans as well. However, like all temporary programs I see no reason why it can't/won't be extended.
Anyway, I thinkt hat some banks are pushing the market up, and others down. And I think that the LTRO may be more successful at kicking the can down the road for a while... how long is completely unknown to me. Obviously the LTRO does not solve the problem. The EU still faces break up... but between 1 month and 3 years of time was bought with this...
where am I wrong?
edit: obviously, if the ECB sterilizes then the LTRO is not QE, and obviously the EU can still bllow up despite LTROQE.
You are spot on. You can't keep saying on one hand that the banks rule the world and they are screaming for a crash and qe3. Then on the other hand keep asking how the market manages to keep levitating in spite of this. If the banks had the control that is always implied they would just crash the market somehow to get their desired result.
My take on all that is that there is no coordinated control, just different influences pushing each other around. Ultimately, human nature wins and herd-mentality overtakes the markets moving it with collective optimism (up) or collective fear (down). Fear will dominate in 2012.
Europe is dumping and all the smart money is leaving but to go where? A few billion dollars will put maximum insured accounts in every US bank that exists. After that you place your bets and take your risks. Right now there are a lot of assets withdrawn and looking for homes. As dubious as they are US treasuries and to some extent equities are the least ugly of assets. Large sums of money have to have a home, they can't just exist in limbo. I wonder if BAC is dissing the euro zone so that some of the displaced cash helps keep them above $5. Third time is the charm though.
Oh, but you can have it both ways. have you ever seen a small furry animal caught in the headlights of an onrushing car?
First it scurries this way... then that way- then this way- and then--- it scurries right under the wheels of the automobile.
Compared to the massive (massive is not a big enough word. you'll have to supply your own mental image: a tidal wave, a death star, a falling, buring mountain or comet, etc) deflationary juggernaut lurching steadily in our direction, the world's banks are but small (albeit rather plump) furry animals with nowhere to go.
It might not make sense economically, but to suddenly lose one's nerve and beg for death, so that one can be placed on life support (we can call this the "Sharon" option) but it is well within the parameters of panicked human response to an unsolvable inevitability.
I like the squirrelly rodent analogy, but I prefer to envision them as rats in a sewer during flash flood.
What's wrong with this picture? COT = 100,000 + EURUSD shorts & BAC recommending short. I know even a blind squirrel can find a nut now and then, but still.....
http://vegasxau.blogspot.com
Do you want to catch the falling knife? Let someone else ( G.S.), fade the trade. P.S. I didn't junk you.
Today we can behold a radical change: the investing public or the first time ever no longer cares where the stock market is headed. And this loss of Emotional Investment is even more serious than the loss of monetary investment, which was absolutely anemic this year coming in at a minuscule 4 billion in fund flows.
The transformation is now complete. THe US public is divorced from concern over the health and future of Wall Street. And as a backlash and emotional statement it could go even further.
Because Wall Street, the Fed and the financial sector appear to be working at cross-puropses to the real economy
BoA aint the only one praying for QE3 so are the gold bugs, every last one to a man (me included)
Not me. I'd much rather see a COMEX default.
Comex default? nah they'll just crash the next major brokerage firm and steal the warehouse recipts again like at MFG, IB maybe next
Massive QE now will simply keep gold at its present level. QE (liquidity) to the banks won't do anything to gold, because gold reflects cash, not liquidity injections to the banks.
QE that simply allows banks to rearrange their deck chairs (by that I mean to make accounting adjustments that make believe they are not insolvent), but which does not allow them to lend (lending creates cash) will not affect gold prices.
if CBs actually printed real paper money, if bernanke really dropped paper 20's from a helicopter (or used drones), gold prices would go up. But this will never happen. Think about it. Direct paper money cash injections into the Main Street economy would put people back to work, and get the economy moving again. It would create massive inflation, but isn't that why you have gold? Then you would be able to tell everyone you told them so.
But such a hypothetical cash injection will not help the banks. Paper money paid out by CB's will hurt the sovereign markets, and further stress banks overexposed to sovereign debt. Even if the governments gave a direct cash bonus via a 100% tax cut to citizens (thus avoiding the need to borrow from the CB) this would destroy the bond market, and send the banks into oblivion.
There is only one option for governments to follow, if they want out of the current trap. Allow and promote the formation of local Gesselian FreeMoney in every local government- that is, encourage localities to issue their own stamp-scrip. This is debt-free money with absolute velocity, injected immediately and accurately into the hands of real people everywhere.
The economy would grow again, and taxes would be paid, debts would be paid down, foreclosures would end, banks could offload real estate, bond markets would improve, and all of this nonsense would end well.
There are only two drawbacks. 1. One-world government plans would have to be scrapped. 2.Gold would become completely irrelevant, unless one was a jeweler.
Um, actually, I don't want to see our currency diluted just to make the nominal value of my PMs go up. That's just treading water (maintaining wealth), as they will still have the same buying power. A hedge against QE is one reason I'm buying PMs and other tangible assets.
What I'd like to see is a flight to safety in PMs which cannot be suppressed by the cartel; A good ol' bubble in gold. That's when we'll really have some fun.
JUST DIE BAC!
As the wise Dave Hester says, short Euro, YUUUP!
A 1 day squeeze?
Here's my hypothesis, since I think this article is dumb.
I think that in general the large financial players want the market to go UP.
however, there is no way on God's Green Earth that the markets can go up based on Fundamentals. The only way is by government and central bank intervention. Therefore, the banks need to keep the news sufficiently negative to encourage ECB/gov intervention, but not negative enough to engender fear of a collapse. The best way to do that is to use volatility.
Thus, go in long, then pump the market up using massaged fundamental data. Then convert to a short position and start scaremongering which will push the market down... as the market goes down start encouraging CB involvement and quietly go long again. Of course the CBs will tell you when they will act so you can get long right before the pop. Ride pop up. Rinse, lather, repeat. Extract bonuses. Leave your company on life support.
There is a reason people say "never fight the Fed". It's not because the Fed is all powerful. It's because the Fed works in collusion with everybody else. Just like the poker game... if you don't know who the mark is, then it's you.
This is why I won't give one penny to these MFers.
edit: on a side note, the process I outlined above is not 100% guaranteed, and people don't work in 100% collusion. There are competing big financial players trying to torpedo each other. My outline only explains the general trend in most basic of ways... but the fact that people aren't 100% in agreement is what causes things like MF global where JPM took out MF... or like how Goldman took out Bear and Lehmann back in the day.
These are sharks that are all attacking each other but who will work loosely together for short periods of time in order to attack their prey... before turning on each other again.
No surprise the first bank on the chopping block is the first to try this... More to come... At least give us some dignity Ben and let the mother fucker’s burn down first...
Please Mr Barnanke...more porridge sir...us poor lil starvin TBTF orphans be but skin n bones!!
Oh don't worry, when the economy collapses, they'll just make us poor peons eat porridge every day.
ECB OMO: $33B in 14 day dollar swap. On ECB web site this morning.34 bidders.
Because of reporting will not be announced by Fed until next thrusday.
We are witnessing the beginning of FED intervention in Europe.
Nope, it started, The FED fed ponzi, after the banker ponzi of 2008, as of END 2008/beg 2009. It continues as the fall out of that initial financial cataclysm, swan song of mad capitalism, widens the chasm between real wealth and fiat wealth; now become the only Oligarchical lodestone in desperate world wide play. Its sucking in everything into the vortex. All aboard HMS Titanic! The FED is behind all those who support the defense of stockpiled, bubble fueled fiat wealth. Their legacy is to defend "exorbitant privilege" to the last man.They have no other choice. The rogue banks are the common money line linking all central banks. Its one and the same thing : ECB/FED, until it breaks, then it will be every man for himself. Not before. However, the GS cabal has two faces, rogue speculator and FED supporter. You can't stop the scorpion breed from being just that, true to their nature.
If we ever had real capitalism all the BS MFs would go under.
Caviar I usually agree with you but without disclosing what I do for a living I can only tell you from my experience that is not the case. The investing public does very much care where the market is heading. The big difference is they are not interested in hearing negative scenario's. They want rainbows and unicorns. Even if it means they have to wait. They don't want the truth. They care, but they don't want to hear bad news. They would rather be confused as to why the unicorns have not showed up yet. IMHO.
I hear you, but I think that's the old paradigm. It's happened before: after 1929-1933 it took 20 years before the public returned to stock market. I mean average people. Rainbows and unicorns was the mindset of 1929, 1999. Post bubble, people get a hangover
yeah I find it interesting at how many retail customers have exited the market. I am pretty sure that most are not stacking metals. Maybe a few think they are picking the bottom of the real estate market. I wonder where most of the money is going.
All bad news is good news. What's everyone crying about?!
Adaptive behavior is the hallmark of our species.
Tyler you print that these banks are begging for Q3, but can Ben really produce enough juice to make a difference? How many tools for easing does he have left? What exotic liquidity potion can he introduce..will a PIMCO MBS special really help BAC? Republicans will block any Q3 to help remove Mr. Obama....
looks like santa lost its GPS
Biflation News Today: Greece announces 10% rise in electricity charges. At the same time, ANSA announces income from agriculture declined 5.3%
There going to commence with NGDP targeting therefore no announcement on QE3 duration or amount....just QE for ever until they meet the target..Dollar goes down EUR up..
P.S. GOLD UP
AH yes, so BAC says the +330 point daily pops are over....and please hand us poor little starving orphan waifs more porridge.....
Taking advice from B of A on anything, is like NASA calling the Khardashian Cunts for advice on how to build a fucking spaceship!
Recycled Biflation News: as US median real incomes and net worth dropped, 2011 set a record for average gasoline prices and tied 1981 for highest cost as % of income at 8.4%
So that makes BAC stock worth about half a Euro.
I find it interesting that the worold of finance talks all this bullshit about bailouts and governement spending, yet at the same time they manipulate markets to levels that puts governments and institutions left with little to no choice but to offer some sort of monetary policy to keep the wheels going or else total failure of the system...they are playing government officials against the system at our expense. I'm not one to judge, but I just don't see how this will benefit anyone in the end.
The job of the government is to stay out of the financial markets. When they enter the markets they screw them up and are corrupted by the players. Like a football game where the referees decide to suit up and play. It gets really fucked up quick. Who referees the game of the refs are playing the MF game?
End the Federal Reserve and the ECB.
Shrink the federal government’s take of the GDP to 11%.
I agree with shrinking the government, but how does that help deal with with market manipulation? I think your statement is very much one sided, and only shuts down real conversation.
So is 1.2510 BAC's stock price target?
Do you really think the BOA corporate structure is so coordinated that the top management/board member's secretive views are instructed and reflected downwards and relased upon a random currency analyst? It's a lot to expect from a 280.000 employee organization.