This page has been archived and commenting is disabled.
Today's New Twist
From Peter Tchir of TF Market Advisors
So today, MAIN and SOVX, European CDS indices waited for US stocks to open before moving to their tightest levels on the day. So in a completely bizarro world, the markets that are most directly affected by this weekends statements and actions have a muted reaction, until the US stock market, with market least directly affected, opens with a bang. Maybe it makes sense, but the correlations seem all wrong. More likely, US stocks are just the happiest place out there and some investors who short the SPX into the close on Friday with all the negative headlines are being forced out, and have decided to sell some CDS indices in addition to covering shorts in stocks.
I am going to bet that the initial reaction in Europe was the right one. Mildly positive but at risk of giving up the gains, and that the US reaction that all is good, is once again wrong.
Italian and Spanish and Belgium bonds are tightening versus French bond yields, but this is not the good type of tightening. French 10 year bonds are out 7 bps on the day. The fact that the other countries are seeing their yields increase should be more of concern than their illusory "tightening" versus France. All but Spain are actually widening versus Germany after this weekend's announcements, which makes sense, as France's participation in the Dexia situation, has further weakened their credit relative to Germany.
»
- 6594 reads
- Printer-friendly version
- Send to friend
- advertisements -
Former ZH favorite Rep Alan Grayson explains Occupy Wall St to the Bill Maher panel.
http://www.fundmymutualfund.com/2011/10/video-alan-grayson-describes-wha...
But Bloomberg says we are going to move away from recession with a massive rally forthcoming & guess what, it is happening.
Goldman Sachs is making big money today. Stock GS is up $3.25
envy over ambition, look 4 more shorts
http://expose2.wordpress.com
Whilst the cat's away, the mouse will play...no bond market trade, and voila ! Up 220.
Lots of short covering, it seems.
Also, for the PM bugs, the correlation between equities and gold/silver has to be concerning.
Look at that dollar fall. DXY down 1.45% and falling.
The dollar has to fall becuase it is right before earnings season. You got to have a weak dollar to book all those foriegn profits. I've noticed this right before almost every single earnings season of the past few years. The currency market is manipulated to make US earnings look better to spark equity rallies.
It's all one steaming pile of shit.
Honestly I think the currency market is about the most inefficient around. Do they have any idea what a bank recap is going to look like and the form it will take? My best guess is major monetization, and their banks are massively levered (i.e. Dexia passed the stress tests easily). How about PIIGS debt - same guess. I can understand the USD being down on renewed risk taking/carry but relative to the Euro on this news? At the end of the day, I guarantee whoever is buying Euros around $1.40 is going to be slaughtered - either that or Europe relegates itself to depression and they enjoy revolutions/war.
When I hear "BNP is fine" I'll know the end is here until then it looks under control at least in the spectre of managing perspective.
WallStreet -- "the happiest place on earth"TM
Isn't Russia bailing out Spain "in principle".
Banque Nationale de Paris use to Nationalized till the mid 90's and there will not be a problem for it to be nationalized once again. And the problem will be contained.
All these negative articles on ZH and the markets just keeps chugging along...just give it up your going to lose the market will go up up up
MN1 and for those who may not know--DOW is still down since 1/1/11. Is slightly down the definition of chugging?
markets may go up, but fundamentals will take over. dont' mistake a correct analysis, but poor timing, for invalidity. all prices converge to fundamentals in the long run.
plot @ a simple metric. rate of sovereign debt increases/rate of increase in sovereign tax revenue.
I thought today was the day that the markets crashed? Umm...
Apparently, markets like natinoalization now. At this rate, when Greece defaults and the French banks go under, S&P will shoot to 1500.
The stock market has become a masochist.
thats right...
So if the entire Western world went the way of China/USSR we would see S&P 10K? Wtf are we waiting for?!?
The markets love MONEY PRINTING period. Stop trying to make sense out of this using yestrday's paradigms (ie, fundamentals). We are all living in Bernanke's world now....
Buy PMs and wait for the inflation tsunami to hit and for fuck sakes stop watching and trading this charade called "the markets"
The markets are now communist/fascist/socialist. Those who support them are likewise...
it is true what you said above. I have the same opinion. italy yachts
because Insolvency Monday in Europe is done for this week with danish Max Bank. more bankrupcy announcement will follow next Monday. until then, make bets, sell short and collect prizes next week.
Or maybe Operation Twist is on and the market is moving just like 1961 where it went parabolic. DUH. I can't believe no one even bothered to research what happened to stocks when it was tried before. But I guess all these small time traders think they can outplay the Fed who moves the entire currency market and stock market with a button.
Yeah this is 1961 all over again. Exactly. From the top to the bottom. Identical
indeed... I have the same opinion. It was the same situation in that year, too.
italy yachts
Then I hope you also payed attention to what the markets did in 1962.
I wonder how many long dated GS puts squid employees have secretly purchased over the past six months?
Yup, bonds take a holiday and we party. Any one want to short this broken market?
I will gladly short this market with other people's money. Dow +272 now
Based on this "analysis" : Greece debt and time squeeze ratio I could not come with any reason fro the squeeze as the intuitive one that Greece has used national debt money AFTER the crisis to accelerate increase in Athens General stock prices. They were way ahead of FED in creating "wealth effect".
Greeks have always been ingenious people with lot of ideas. Now, the consequence of doing it so fast and on such a scale using debt has accelerated timeline for Greece as compared to the USA and most other countries 3 times- -that is , their stock market was already in "recovery" in October 2009 while the rest of the Europe and USA reached that level with their SLOW stimulus in July 2011.
See here comparison between Greece and USA stock markets where the abnormally speedy recovery of Greece's indexes is obvious:
Greece stock markets recovered with amazing speed
To cut it short, there are not many European countries in dire shape, there is JUST GREECE and then others which can be graduated between themselves.
So the prediction: Given the facts that:
1) EUR/USD rate will grow till the end of October /middle November as predicted here to 1,40: EURUSD, then drop back to 1,32 which is the level with Greece already priced in; (BTW, on the chart the big letters should read EUR/USD, not USD/EUR- a typo.
2) There are new companies/countries in need for artificial life support ( Dexia comes first);
3) Merkel and Sarkozy have a plan TODAY for Europe debt situation but details will be worked out by the end of OCTOBER;
Greece will default, leave Eurozone and return to drachma (GRD) during H1 of November 2011.
Could not figure out drachma to EUR ratio easily at this moment, but I guess it will be around 1000GRD/EUR. Quite soon, as EUR problems expand even without Greece, in March 2012 exchange rate will be 700 GRD/EUR, then in July 2012, around 840 GRD/EUR, than again down to 620-700 GRD/EUR. From then on, most likely, GRD and EUR rate will be relatively stable untill 2013.
Insolvency Monday. That is a good one. And interest rates continue to creep up. No big deal. We only owe a couple of dollars to the world. We may not believe what we see but most of us know not to short this market.
PMs are the ultimate short...long term.
Prime Ministers?
Jesus Christ this has been incredible.
I swear to god you're going to find out the fed and Brian Sack were selling puts this entire time.
Screw this, when the markets will fall.. guess who'll be swimming in cash, shorting all the wayy nigguuuuuu
i dont think US reaction says 'all is good', it just says 'all is short'...
sellers are gone. scared & safe in bonds.
It's algos pushing up algos, thus the asset reflation.
It only takes one headline for the algos to dump @ 1ms; faster than the human nervous system.
I read that according to economic history few nations have escaped a real estate bubble without some kind of hard landing. Moreover, 45% of Chinese net worth is in real estate, compounding the problem. You have a Chinese shadwo banking industry outside of government control, where a lot of people have put savings, to gain >20% interest to outrun inflation.
China hard landing still imminent.
Then there's Japan debt, and a strong yen, due to global monetization, to worry about. Also, you have US local governments laying off more staff, which indicates States are further overloading financial stress to muni.
Anyone owning risk is brave.
DXY down over 1.5%....that explains it.
And we're already talking Trillions of stimulus from both sides of the Atlantic. And you can be sure the trillions will come. It's no longer an option not to as governments run out of cash faster.
Today's new Twist is why you never want to be short when the CB's are all in FULL PRINT MODE.
Even Zimbabwe soared despite a crap economy...more printed money = higher equity prices.
and with 3X leverage you are thirty percent better and done in less than a week
take the fat pitches especially if they are rare
Tue, 10/04/2011 - 14:10 | prophet
Vote up!1
Vote down!-1
for SPX don't stay too long on the short side - 200 month MA for SPX is very powerful - max time spent below it is about a year and there have been some 10P+ ricochets after touches of the line also consider 200 down to 900 area and 200 up to 1300 as equally likely year end targets
(the troll in me says take the profits and buy physical)
german market has broken out of it's trading range, it hasnt been this high since mid august. the dow is still within thepost selloff range. what it means i dont know
All is well, problem solved. From now on, the market will rally like it's in 1999. The parabolic raise of the the fat pig just started.
The global clown show is exactly why people hate thes scumbags on Wall Street and everything these gansters stand for.
9/19/2008, when Bernandickhead and Paulsondicksheit both presented the gravity of the situation to the congress, the market rallied hard, we know what happened next.
Time to leave the bear camp :-)
Get ready to be squeezed. Of course, we are bound to collapse again but the bulls and politicians are ready to squeeze us here.
Slow and steady does it. Just keep stacking. Paper is now less than paper. It is pixie dust that will vanish virtually overnight with the first unexpected, unprepared-for event that catches the banksters off-guard.
They can't plan for seminal events that come on in a day or two. And the overall financial system is so precarious it absolutely can not stand up to such a shock. In previous decades the system could have withstood such a shock, but DEFINITELY not now.