Risk Markets Remain Macro-Driven

Tyler Durden's picture

As we discussed earlier, markets remain mired in their addiction to liquidity and the global macro-picture seems synchronized to this central bank largesse with an inability to function without at least the hope of more QE around the world. Nowhere is this more clear than in the extreme high levels of correlation across global risk assets. Barclays notes that the correlation between global equities, the USD, emerging market FX, high-grade credit, and commodities remains near cyclical highs and rising. Furthermore, 'safe haven' correlations are at record levels relative to risk assets (especially US Treasuries) and they remain tactically biased to fade any rally here as the correlations have driven an 'extreme valuation gap' between 'safe haven' and risky assets - which creates a strong potential for 'spasmodic relief rallies'.

Financial markets remain macro-driven...


and 'safe-haven' correlations have become even more exaggerated...

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bigwavedave's picture

FB is the only non correlated safe haven left. Run a backtest and prove me wrong. Bitchez

Spirit Of Truth's picture

Bob Prechter refers to this as "all the same market".  Per the Elliott Wave Principle, we might have just entered a dynamic move down:




Turkish army says it lost contact with plane

June 22, 2012 • 09:15 AM

Turkey said on Friday it had lost contact with a military aircraft while it was over the sea off the southeastern province of Hatay, which borders Syria.

CNN Turk television said the aircraft had crashed in Syria. There was no immediate official confirmation of that report.

In a statement, Turkey's military said a search and rescue operation was underway after it lost radar and radio contact with the plane after it took off from Erhac Airport in the eastern province of Malatya.

Turkish jet downed by Syrian air defences - Al-Manar TV

BEIRUT | Fri Jun 22, 2012 10:59am EDT

(Reuters) - Lebanon's Hezbollah-owned Al-Manar television station said on Friday that Syrian air defences shot down a Turkish military aircraft, quoting Syrian security sources.

"Syrian security sources confirmed to a Manar correspondent in Damascus that Syrian defence forces shot down the Turkish fighter jet," a news flash on the Beirut-based station said.


slaughterer's picture

Pair trade suggestion: Long high-yield credit/short ES 

idea_hamster's picture

You're not the first -- they've all been squeezed until they gush blood.

As long as ES is nominal and Ben is at the printer, you will lose shirt after shirt after shirt.

Not advice; just sayin'.

gjp's picture

Indeed.  Just look at today's market.  Euro, Euro markets, PMs continue down, energy and yields bounce back a little, but guess who is leading the charge back to quickly forget yesterday's foray with reality?  Of course, US momo stocks, WFM, CRM, CMG, FB, Nasdaq.  It is the instrument of oppression of shorts who still think fundamental valuation has any relevance in a centrally controlled world.

Alea Iactaest's picture

None of the banks "selling on strength" today. A bunch of blue chip names at the top. So if everyone is holding on a Friday, as the entire sector trades green, what does that tell you?


Nid's picture

Hmmm, wouldn't a truly Macro-driven SPX be trading at somewhere closer to 1200? Seems more headline and bullshit CB doublespeak driven.

Alea Iactaest's picture

You think? How about if SPX was priced off of fundamentas? About as useful. All that matters are policy and headlines. Until even that doesn't work anymore. Then fundamentals. Feel free to go broke in the meantime.

slaughterer's picture

On a long enough timeline, the halflife of a "EuroRumor" (TM) approaches zero seconds...

NotApplicable's picture

All that means is that they have to approach infinite rumor velocity.

And I wouldn't bet against that, given it's the only thing they're any good at (well, other than stealing).

The Singularity approaches!

Ghordius's picture

+1 for making me laugh. but at the end we could expect both human and bots to stop listening to the EuroBabble

lolmao500's picture

Here's risk for ya...

AFP: Turkish government calls crisis meeting after military plane disappears nears Syria

Alea Iactaest's picture

Turkey member of NATO. What could possibly be going on?

lolmao500's picture


There's lots of contradictory information out there... Were they F-16s? F-4s? How many were shot down? Were they shot down or was it an accident... Are the pilots still in Syria or are they back in Turkey?

Alea Iactaest's picture

From AP: the plane apparently plunged into international waters outside the territorial waters of Syria.

But do you really expect a full story about what happened? From Reuters 19 June:

MOSCOW (Reuters) - Russia and Syria on Tuesday denied an Iranian media report that Syria would host Russian, Chinese and Iranian military forces for joint exercises.

Iranian news agency Fars said 90,000 troops and hundreds of ships, tanks and warplanes from the four countries would take part in the war games on land and sea in Syria soon.

magpie's picture

Wasn't that lifted from jpost ?

Alea Iactaest's picture

No idea. I pulled it from Reuters, as indicated. Was widely reported, however.

magpie's picture

...which means the Euro is finished ?

NotApplicable's picture

It's a small world after all.

It's a small world after all.

It's a small, small world.

NotApplicable's picture

"For the life of me, I thought turkeys could fly." -- Les Nesman

lolmao500's picture



Earlier, eyewitnesses in the northern Syrian town of Latakia told BBC Arabic that Syrian air defences shot down an unidentified aircraft near the town of Ras al-Baseet.

Me thinks Syria shot down the F-4 and Turkey won't admit to it.

lolmao500's picture

Another report.


Syria apologizes for shooting down Turkish plane - Erdogan

Damascus has apologized for shooting down a military plane, which went off Turkish radars earlier in the day, Turkish Prime Minister Recep Erdogan said.

The plane was taken down by Syrian forces, an official Turkish source confirmed to Hurriyet daily.

The plane crashed into Syrian territorial waters earlier today, according to reports. A missile shattered it to pieces after which the missile plunged into the Mediterranean Sea. The two pilots were later saved off the shore of Hatay, a south eastern province bordering Syria.

Syrian vessels have joined a search operation, which was launched immediately after the Turkish military lost radar and radio contact with the jet. The planes took off from Erhac Airport in the eastern province of Malatya at 10 a.m. local time.

Unconfirmed reports suggest that Syrian defense forces had been shooting at two foreign planes.

“Witnesses spotted two jets flying in from Turkish territory. One of the planes went down in Syria’s territorial waters, while the other one made off,” says Ihab Sultan, a local correspondent in Syria, told RT.

And for now, we don't know for sure if it's a F-4 or a F-16...

lolmao500's picture

Another report...

Source: There were 5 planes that violated our airspace and two were shot down, one F4 and one F16. One over sea, one over land.

lolmao500's picture

Another report and a big one...

Turkish source : The plane was in Turkish airspace when it was shot down by Assad's troops...

This might be why Erdogan is doing a emergency meeting with his military generals...

GMadScientist's picture

"government calls crisis"

Remember the Nineleventania!

disabledvet's picture

You mean "driven by fear." stop making it complicated. "people are scared shitless and that's your trade." taint much of a trade now is it...in ANYTHING.

czarangelus's picture

I just wanted to tell y'all I innocently loaded up ZH today and there's Jim Cramer's face plastered across my sidebar, begging me to sign up for TheStreet.com. Talk about mixed messages guys!

GMadScientist's picture

Don't blame TD for your lame browsing history.

Alea Iactaest's picture

Not that it really matters, but don't you delete cookies at least daily?

GMadScientist's picture

Yes...correlate....put it all in one big festering pyre to be.

Snakeeyes's picture

True, but if the US' M2 Money Velocity has crashed to post 1957/1958 recession lows, Central Banks cannot stimulate growth. Just create bubbles ... that burst.


Arnold Ziffel's picture

NYSE up again.....is this part of the "spasmodic relief rally"......or do i have it backwards?


It's amazing anyway you cut it.

Kreditanstalt's picture

The only way this nonsense will STOP is when dividends are CUT.

q99x2's picture

"As we discussed earlier, markets remain mired in their addiction to liquidity and the global macro-picture seems synchronized to this central bank largesse with an inability to function without at least the hope of more QE around the world."

That's because those with the liquidity fingers are the only ones left in the market.

Time to start new markets without central banks so people can invest.

Why talk about someone elses game. It is not very interesting. Sort of like talking about someone elses three legged dog. You can only take it for so long. But it must be done. And someone's gotta do it. And nothing I like better than beating something when it is down and broken like a dead horse or a limping spider. Yes give me an elite to pick on. Long live the revolution.

slewie the pi-rat's picture

slewie translation:  screwed down tight much?