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US And European Equities Retrace To Credit's Pessimism
In the last week, both European and US equity markets have valiantly attempted to extend their rally into the stratosphere while the credit market has summarily dismissed this exuberance as 'oh those silly algo-driven momo monkeys'. Yesterday and today we have seen equities in both regions retrace aggressively to the much more realistic, liquidity spigot-lacking margin-compressing growth-slowing reality that credit has been pricing in.
US markets have extended and retraced once again and credit is now at multi-week wides...
and European equity markets were downright ignorant of the reality occurring in European financial and non-financial credit markets...
Charts: Bloomberg
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I'm guessing this must be 'the crisis' Ben said he needed to QE (monetize the debt) again.
Enter Ben, and 'liquidity spigot-lacking' morphs into 'liquidity spigot licking.' On your knees, Wall Street!
I think that's the right call, prepare for deer in the headlights commodities and stock crash so Ben can ride in and save the day.
Markets DOWN = GOLD DOWN
Markets UP = GOLD UP
Gold Down = Buy
Markets Up = Sell
Expectations of Inflation Up: Markets Up, Gold Up
Expectations of Inflation Down: Markets Down, Gold Down
No one trades on business fundamentals any longer; they just wager on how much Ben will print next week.
Yes, but all the MSM will focus on is that metals are on sale...er...are no longer safe.
The monkeys will get ya
and for that, we thank you. Now watch the treasury auctions, seems like we have seen this play before.
I really think the Fed is trying to dent wholesale gasoline prices...and failing.
Yeah, good luck to them getting gas prices to fall much, just because Ben says 'no more QE for now' doesnt mean they havent printed any less.
No, and stopping the presses will have no impact on the collusion.
I was filling up yesterday at 6 p.m. @ $3.94. Went inside and heard the clerk take the call to up it to $3.99. I asked, she confirmed. Then she told me "He's trying hard to keep it under $4.00, mental thing. He doesn't think he can for long, though."
That and/or PMs. Definitely a game of relativism v. Buffet's all-mighty equities. Problem with the gasoline side is that the winter-to-summer refinery pinch is getting in the way. While Brent and WTI prices have been dropping a bit with the "transitory" withholding of liquidity, gasoline futures have held their own and even risen. Which is why pump prices have jumped another dime even as Brent has fallen a couple bucks.
The Fed and other CBs are being painted into a corner by the threat of sovereign bond yields jumping up and blowing the fiscal deficits into orbit. I think Ben is curled up in the fetal position with a heavy dose of withdrawal shakes...
Wall St media frontmen seem desperate to get PM holders to sell, and then go into stocks...still anxiously looking for someone to sell their pump to.
We are nearing the end of this snakes and ladders game; maybe the Fed will lengthen the board again.
Long term prediction Silver:
http://www.tfmetalsreport.com/comment/78025#comment-78025
Long term prediction Gold:
http://www.tfmetalsreport.com/comment/83978#comment-83978
On other hand, once You go long there (high 20-ties if they come, high 1500-ties if they come) , its one way traffic.
For EUR silver/gold the dip will not be much lower as it is today due to devaluation of EUR vs. USD in coming months.
Long term prediction EUR/USD:
http://www.tfmetalsreport.com/comment/146897#comment-146897
For stackers, below 32,5 is excellent opportunity to add ( not that it means much in a long run, but still nicer to buy close to the bottom).
And yes, the key is that manipulation exists, which shows despair , which will only continue until it will not be able to continue- no later than end of 2012, in my opinion. After the USA elections all hell will break loose in easing terms, whoever wins. Meanwhile, Europe, Japan, UK etc. will continue easing all the year long.
Time for the markets to fade until August then Benny boy can print. Nothing to see here business as usual.
I'm not convinced they can just 'coast' thru the summer, theyre fighting a Cat 5 Shitnami head on.
They'd love to call it all Goldilocks until the election. Fat chance though.
I thought they would at least hold it together until they unloaded that over hyped piece of crap facebook.
"Back to reality, ops there goes gravity ..." - Reminds me of a rap song.
Mmmmmminem?
It has begun.
When money is created (or scavaged from balance sheets) and then malinvested, as the banking powers instist, there are consequences.
Did they or did they not foresee issues with 100% managed markets and a slavery system based on "trickle-up" economics?
I am thinking that it would be much easier to balance the money supply with the amount value adding labor. However, they apparently believe that increasing the stock market to compensate for the loss of buying power created with infinite fiat serves the same purpose.
I guess it depends on which side of the trickle you are on.
Some undoubtedly foresaw it, but if there is financial incentive to go against ones better judgment.... well, have a guess what happens then.
For the same reason, it will be only the odd state & its assoc. central banking institution that decides to go with a balanced budget and show monetary policy restraint. The rest will retrace the lessons that history shows (to those willing to learn), and will crash their economies to the ground in the process.
You can't stop it, but you can guard your economic safety, and that of your family, from it. Avid ZH readers are well aware of how this is done.