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Schrodinger's Market As European Equities Surge And Credit Shrugs
On this first day of the second quarter, and especially since the US open (and the ISM print) European equities decided all was well and rallied broadly back to their highs of last week. In the meantime, credit markets (sovereigns, financials, and non-financials) sold off quite notably from a positive start and despite a small rally into the close (which sovereigns did not participate in) closed practically unchanged. It seems Schrodinger's cat is indeed present not just in Chinese PMI, US jobs data and regional surveys, but also in the risk asset markets as credit market participants are dramatically different in their views (and flows we suppose) going into this quarter. We also note that Europe's VIX has collapsed in the last few days to a more normalized level relative to US VIX.
European equities (blue) staged a remarkable rally following the US equity open (and ISM data) but credit markets did not - at all...
The fact that investment grade (brown) outperformed on the day (and financials underperformed) further underpins the un-reality of this divergence as if risk was really on (as stocks would suggest) then the higher-beta XOver or SUBFIN should have exploded.
And sovereign bond markets limped weaker all day long after a positive open...
Spain and Italy underperformed from the opening gap positive - and Portugal was the worst performer overall on the day as basis traders stop buying.
European VIX has collapsed 5 vols in the last two days as we said it would after reaching record wides relative to US VIX...
Charts: Bloomberg
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"Schrodinger's Market As European Equities Surge And Credit Shrugs"
Atlas is Shrugging
http://en.wikipedia.org/wiki/Atlas_Shrugged
Who is John Galt?
http://en.wikipedia.org/wiki/John_Galt
Just as long as Cog doesn't shrug... when are you going to give us another article?
Who is Cognitive Dissonance?
http://www.youtube.com/watch?feature=player_embedded&v=w45Pct9dVj0
Been real busy fixing up my Plan 'B' escape pod Dagny. For when it's needed.....of course.
Should have the new warp drive engines, Bose sound system and StarNav installed in a few more weeks........God willing and the fiat creek don't rise. Don't want to be stranded here on Earth when (not if) the Ponzi goes thermonuclear.
my best friend's sister makes $63/hr on the computer. She has been out of work for eight months but last month her pay was $18250 just working on the computer for a few hours. Read more on this site... http://goo.gl/2tEsp
Big time. "All your paper is belong to us." Fine with me, I have physical assets and know the value of my labor and that of my employees. The only people who should fear collapse are paper-pushers. fuck them, bring it. Even the manufacturers in China are getting sick of the government bullshit (basically, all governments are now playing paper games and front running said paper games - totally fucking stupid).
More like Schroeder's Piano actually. "and he just put Beethoven's bust to get him in the mood."
The Ponzi must continue.
If it stops all the criminals pulling the strings will be out of a job.
You hear that Bernanke, you MOTHERFUCKER.
Beyond absurd. But, you cannot short this market. Now that Europe is closing, lets rally the boys here.
pretty damn true. The only way to short now is to actually sell. How long before selling gets you on a watch list?
So long as you're buying something else you should be okay. At least on THAT watch list...
OT/
oops...
Bundesbank says no ban on sovereign debt collateral
Germany's Bundesbank said on Monday that it will continue to accept all eurozone sovereign bonds as collateral in its lending operations, rejecting media reports that it had stopped taking debt from EU/IMF programme countries.
Stock markets turned negative on Monday and traders pointed to media reports which said that the Bundesbank had stopped accepting sovereign bonds from Portugal, Ireland and Greece.
"We continue to accept sovereign debt from these countries under the ECB's rules,» a Bundesbank spokesman said.
Last month, the ECB gave the euro zone's 17 national central banks the power to ban the use of bank bonds underwritten by governments in EU/IMF bailout programmes as collateral to get unlimited ultra-cheap loans.
The Bundesbank was the first to say it would use the power.
[Reuters]
ekathimerini.com , Monday April 2, 2012 (14:45)
So stocks and commodities surge, the dollar falls, and what do US bonds do? Keep rising of course. CPN - central planner nirvana, uninterrupted into Q2. Sickening.
Until we get the next big planned false flag attack on us, we'll just see this same crap day after day.
yes, at least until the next delivery date or margin call.
well well well really pathetic and a true sign of desperation, fun to watch!
I am not so sure "European equities decided all was well" as much as US equities "decided" that Apple will sell north of 3B iPads in Q2 with a price target of 20 000, The Chair had an oatmeal this morning and US will decouple. European markets just follow suit.
they got it screwed down tight and they're checking the torque on the hi-fiat heads
i hope schro knows where his damned cat is! it could be causing this premature euphoria among EU men of all metro-sexes
US markets up another .5% as usual, nothing to see here in 1984.
Wow, the market keeps on going up even in Q2. It must not be a lie!