As Stocks Surge On Rumor Of Additional QE Measures, Someone Forgot To Tell Europe It Is Fixed: CDS Rerack

Tyler Durden's picture

Even as stocks surge on the back of the latest rumor that yet another perpetually wrong Medley report has been released and states that the Fed may cut the IOER to zero in addition to Operation Twist (we have not seen the report nor have any interest in putting any faith in a "think tank" work product), someone has apparently forgotten to tell Europe it is all filed. Here is the CDS rerack, which unfortunately shows that this latest stock ramp is to be faded, especially since QE3-666 are already priced in, and will all eventually fail.

ITALY                 497/507  +34                       
SPAIN                 423/433  +13                                
PORTUGAL         1220/1280 +137                           
IRELAND             900/960  +75                      
GREECE                54/58  +5                                                                                                            
BELGIUM            298/308  +14                              
FRANCE               189/192  +13                        
AUSTRIA             149/157  +14                              
UK                       83/86  +4                    
GERMANY             87/90  +5     

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oogs66's picture

neither of those policies would have anywhere near the impact of qe2 anyways - pure hopium

ZeroPower's picture

Yup. But we all know equities are the 'real' market.

HoofHearted's picture

So why are the PMs not taking off to infinty if there is more QE planned in the US and more already in Euroland? More intervention of the Cartel? Of Central banks? Mass stupiditiy of people thinking that the DXY means the dollar is actually getting stronger and not just less weak than the others???

Cdad's picture

We are well past the freshness date on any banker public statements.  The market is explaining that there is no magic bailout that will turn the situation.

Gold...hard to say.  Profit taking, I'd guess...offsetting losses elsewhere.  As well, the move in the US dollar will trip up thousands of algos programmed to respond to what is the unwinding of the most crowded trade in the galaxy [short USD...which is the inverse of long gold].

Hard to play anything from the long side just now....not until the central bankers in Europe simply wave the white which time, I suspect you get the gold move you have been dreaming of.

But for what it is worth...I'm not very good with the PMs.

CvlDobd's picture

The dollar and margin calls IMO. I like this site but I am amazed at the bullishness on the PMs. History has never been kind to any thing that people think can only go up. I agree that the fundamentals (printing) for the PMs to go higher are there but that doesn't mean they have to go higher.


ManufacturedOpinion's picture

"History has never been kind to any thing that people think can only go up. "

Oh, yeah?  How many people ??

What kind of a stupid statement is that?

There are about 1% of the people (all here on ZH it seems) in the world that think that.  Does that mean we're gonna get hurt here?


That's the funniest one I've heard all day!


CvlDobd's picture

I didn't say you are going to get hurt in metals. Just responding to a post on the PMs being down.

Perhaps I should rephrase my history comment like this. All good things must come to an end. In case you don't understand that comment, it isn't a sell recommendation on PMs, it is an alert to use your head and not look at the world strictly through gold colored glasses. Just saying, be careful out there!

Frozen IcQb's picture

All thing equal, if the fiats are losing purchasing power, hard assets must go up.

Sure there's ebb and flows but you have to be in the game to pick-up the upside.

DormRoom's picture

Two points:


First, QEx gives time for households/businesses to deleverage, as the debt is offloaded onto the public balance sheet, and as long as the velocity of money doens't increase, inflation is moot, so the FED aren't too concerned. And can continue the program for years.


Secondly, you assume a Greek default will trigger a liquidity crisis, per what happened after the Lehman collapse.  But governments have a better understanding of the aftermath of such events, and are already preparing liquidity.  So a credit crunch may not happen.

Scisco's picture

I reject your reality and substitute my own.

Adam Savage

As a rebuttal to your comment. Granted not the government but only by semantics.

Cognitive Dissonance's picture

Anyone know the score?

I think it's Love (my US banks) Love (my ECB banks).

machineh's picture

Eh ... Greece lopped a couple of zeros off their CDS quotes?

Clever! Why didn't we think of that?

HelluvaEngineer's picture

Sure looks like a bull trap

GeneMarchbanks's picture

Belgium + Dexia = Spain + Santander = France + SocGen = QE(Euro Edition)


* Sorry about all the complex math.

snowball777's picture

No need to be sorry, creative use of imaginary numbers is de rigueur.

stormsailor's picture

done,  shorted 20 /es at 1147.

Spitzer's picture

Any time Europe threatens the system, the FED  starts printing.

If the Fed doesn't print, Bretton Woods 2 dies and Euro Freegold takes over.

john39's picture

i wonder how long the QE carrot on a stick can keep pulling the markets higher... surely at some point even the idiots out there will realize that: 1) QE is not coming or 2) it won't work anyway.

ManufacturedOpinion's picture

"Won't work" ???

QE works perfectly.  It does exactly what it's supposed to do.

Now ... just what is that?  What is its intent?

Simple:  Create lots of money and give it to your friends (bankers).

And we all sit around talking about what QE does FOR THE ECONOMY!  BRILLIANT!

It was never meant to help the economy.

Follow the money.

'Nuff said.

SheepDog-One's picture

Every day they dangle the QE3 carrot out in front of the swayback gluehorse markets...giddeyap just 1 more day there ol Nelly....

CH1's picture

Stocks are probably surging from European money running away from Europe.

The smart money will go to gold. (Not that there is much of it.)

The stupid money (99%) goes to US stocks.

The fools must play their role!

Cdad's picture

The reversal has already begun.  One of the worst, most impatient ramp jobs I've seen in recent years. 

All about making sure the all clear to short signal is in, as anyone chasing this move literally needs, or already has had, a complete frontal lobotomy.  

And GS turns 99 today.

SheepDog-One's picture

They now have no concern about hiding blatant manipulation now, just a 30 minute ramp from -200 open to all green...just a damn travesty what these Maniacal Monetizers have done, completely destroyed markets.

At this point Cdad apparently theyre just 'If we're going down, then EVERYONE is going down with us damn the torpedos!'

SheepDog-One's picture

OH I see! We priced in QE3 again for the 17th time now at least! Someone 'heard a rumor'....BAAA HA HA HA HAAAAA!!!

X.inf.capt's picture

thats pretty funny, dog...lmfao!

SheepDog-One's picture

Yea all I wonder is who was under who's desk this morning giving a blowjob and overheard a rumor!

John Law Lives's picture

The new economy = QE, hints of more QE, and more QE...

100% FUBAR.

vast-dom's picture

fuck this I'm setting up my very own counterfit operations -- if Teh Fed can do this ILLEGALLY so can I; just not out in the open..........

adr's picture

Ha, all the market needs to rally is a rumor of QE. It doesn't even need QE at all. The house of HFT can rally to infinity if rumors are all the market needs.

OPEC came out with a forecast of demand destruction and oil trades up. Oil use in the US summer season was 2% below last year. Pretty soon we will be back to 1970s usage levels.

The decoupling of reality from the markets is complete. Only a disaster of biblical proportions or tossing hedge fund managers from the tops of buildings will set the market straight.

John Law Lives's picture

The market ignores all sorts of bad economic data in hopes of more QE. What a FUBAR situation.

r101958's picture

..and China/India consumption was up 10%. We are not the only market for oil in the world. Unlike fiat currency, oil is finite.

adr's picture

a drop of 2% in US consumption is larger than a 10% increase in China, at least for now. OPEC also said demand in China has decreased as well.

You can't make a bullish case for oil. The correct price of oil is south of $40. When oil began the first massive ramp job every major oil company said it would be profitable to drill anywhere on Earth at $40 a barrel. Amazingly this went to $60 and then $80 as oil blew past $40 on its way to $147. This completely caught the oil producers off guard. They never believed in their wildest dreams that oil could top $40 a barrel.

You could build a rig on the ocean floor and pump profitable oil at $50 a barrel. The cost to pull oil out of the ground has not increased at the same rate as the price of the commodity. Demand hasn't increased at the same percentage as well. If we have such a shortage of oil, why hasn't any gas station run dry? How can we still be storing millions of barrels at overflowing facilities?

If someone started paying your company $100 for something you sold for $10 you wouldn't want to go back to selling it for $10 again. Even if it still only costs you $1 to make it. You'll start to create "reasons" why your cost has gone up in a vain attempt to justify the inflated value.

I bet you believe it actually costs $20 million to pave two miles of road as well.

lano1106's picture

At least if they manipulate the markets, they should do it more subtly. Seeing swings of more than 1% up and down every half hour removes any remaining credibility to the system!


SheepDog-One's picture

Theyve lost their damn minds if they think theyre fooling anyone with this crap anymore.

'Rule 48' open from -200 down, which then gets immediately erased?

Computers and the FED the only ones left in 'the market' at this point.

lano1106's picture

things now seems to return back to normalcy in NA markets. Maybe it was the scared european investors seeking safety that made the market rally after all.


I'm so suspicious that as soon as I see a rally I immediatly scream 'Manipulation'.


John Law Lives's picture

Many people are suspicious of the markets these days. It is obvious that markets have not been behaving rationally. Good thing we have a site like ZH to report real news.

hedgeless_horseman's picture

What could be more credible than this face?

Cdad's picture

Seeing swings of more than 1% up and down every half hour removes any remaining credibility to the system

And that was exactly the point.  Institutions can now sell at will.  There is nobody home on this ramp one.  I'm guessing even Art Cashin is shaking his head.

It's called the context of the "new normal."

Cue the BlowHorn [CNBC] and its parade of criminal syndicate Wall Street bankers talking about "historically cheap valuations" and "buying opportunities" with hourly announcements about how "we are well off of our lows."

r101958's picture

...and, of course, while paper PM's get sold off (gold - 22.5) there is a DOW rally from -120 to only -43. Gee! What a surprise! No manipulation here (sarc/off).

LawsofPhysics's picture

How is BAC still up today?  Are they getting membership in the club finally.  What am I missing here?

SilverDosed's picture

I feel like I'm taking crazy pills. I watch the market upon down big as expected, then I fell asleep for an hour or so and wake up to a green dow and s&p? BAC up? Am I still asleep?

RobotTrader's picture

Put/Call ratio opened up at 1.73

VXX opened at 48, meaning that huge premiums were paid for puts as well.


Flakmeister's picture

Yep... sold friday expiration SDS 27s for 0.54. Thank you very much for the premium....

Dr. Engali's picture

If the markets have QE3 priced in already there is going to be one huge dump when it's finally announced.

SheepDog-One's picture

QE3 would have about as much long term effect as throwing a petite filet mignon into a school of great white sharks.

PulauHantu29's picture

"Everything is fine" ....they said this morning.

Everybodys All American's picture

Portugual, Ireland, and then Italy ... looks like there is a little time before the global financial meltdown.