AUDJPY Closes Gap With ES As "Risk On" Fizzles

The irrational exuberance of the last 24 hours has evaporated following the Meredith Whitney downgrade of Goldman 2010 EPS, but mostly after reports that some European banks are so busted they managed to fail an exquisitely doctored test designed so that no banks would fail. The market is once again wondering if someone can fail this farce, what would the test of reality look like? The result: the traditional carry-risk correlation has once again recoupled and with countless such occurrences continues to be the most routinely profitable intraday trade available.