AuthorTopic: Wile E Coyote Time?  (Read 6677 times)

Offline RE

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Wile E Coyote Time?
« on: May 06, 2012, 09:07:29 PM »
In the wake of Sarko's  crash at the Ballot Box and the Greek Parliament being turned into a melee of anti-bailout parties some of which only appeared on the scene months ago, predictably here there is a flight to "safety" going on in USTs at the moment.  The Eurotrash Markets should be opening here pretty soon and they should also do a predictable Black Swan Dive.

This would seem like a good week to bet the market short, though of course Helicopter Ben and the PPT are likely to drop in and keep the FSofA markets under some control.  Another aspect to consider is that if investors start wholesale dumping of Euro stocks, they might turn around with whatever toilet paper they get from the sales and buy AAPL or Netflix.  One group sure to get hit hard here are Eurotrash Financial Stocks, so this might be a good time to short Deutch Bank and BNP Paribas, which are already pretty low but really should be Penny Stocks so there is still money to be made in shorting them.

On that note, it can't be too long here before one of these major Eurotrash Banks has to be explicitly Nationalized, which itself would set off another daisy-chain round of collapses beyond what the Goobermint collapses are doing.

For Kollapsniks here, the Week Ahead in the Markets looks to be the most exciting one in quite some time after a period of relative calm and boring Ramp Jobs based on Hopium and more Bullshit, Lies, and Statistics from the BLS.

Break out the Popcorn boys and girls, we're gonna have some FUN this week! :partytime2:

RE

http://www.zerohedge.com/news/treasuries-plummet-3-month-low-yields-equities-recouple
Treasuries Plummet To 3 Month Low Yields As Equities Recouple
Submitted by Tyler Durden on 05/06/2012 22:40 -0400

Ben BernankeDeriskingEuropean Central BankYuan

US Treasuries opened just over an hour ago and are now trading considerably lower in yield. 10Y yields are under 1.84%, their lowest since February 3rd and within a few bps of ther 1.7959% yield lows of mid-December which would all but guarantee a return to the September 2012 2011 low yields. More critically for all those QE-hopers, the massive divergence which we have been vociferously arguing as unsustainable between 10Y yields and the S&P 500 has how collapsed and converged perfectly. From last Tuesday's Bernanke press-conference when he hinted (albeit hedged with chatter of recklessness) that QE was still on the table (which we argued meant that - should the entire world suddenly go pear-shaped, we will step in but until then we are on hold), US equities decided that they should forget fundamentals once again and simply bid the market on nominal price improvement based on fiat-debasement - which enabled a 50 point divergence from reality- which has now completely converged and in fact S&P futures are now 10-15points below the pre-Bernanke-week-hope lows.

10Y Yields are at 3-month lows...

As a reminder, not only are macro data serially disappointing (or simply Schrodinger-ing where impossible to fudge) but while earnings may be interpreted by many as good for Q1 they are merely reflexively biased from a reduced expectation going in and more critically (for those investors who don't have a time-machine - everyone except Tilson), although these quarterly earnings look positive they have done nothing to change 2012 overall EPS estimates as the back-end remains heavily hoped hyped loaded.

Broadly-speaking, US equity futures, Treasuries, and FX markets have stabilized at somewhat convergent levels for now and as the Yuan depreciates (that's the opposite of appreciates Senator Schumer) the most in 3 weeks, we await Europe's open for the real derisking action to begin (especially as we remind readers of the drying-up of collateral for any new ECB funding shenanigans - most notably for the worst nations such as Spain as we noted here).
« Last Edit: May 06, 2012, 09:10:54 PM by RE »
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Offline RE

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Re: Wile E Coyote Time?
« Reply #1 on: May 07, 2012, 01:12:14 AM »
Katy Bar the Door!

As expected, the Euro Markets are getting hit hard in early trading, and so is the Euro.  1.30 has been breached and we haven't hardly got started yet! :happy1:

Over/Under on how long before the Krauts start printing D-Marks?  2 Months?

RE

Euro Falls Sharply, Stocks Lower
By MARTIN ESSEX and ANDREA TRYPHONIDES

LONDON—The euro fell sharply early Monday and stocks opened lower in Europe after weekend elections in France and Greece resulted in votes against austerity, raising questions about the euro zone's ability to solve its sovereign-debt problems.

The DAX in Frankfurt was down 0.9% and the CAC-40 in Paris was down 1.6%. The U.K. market is closed for a bank holiday. German bund futures, regarded as a haven for investors, opened higher. The June future hit a new contract high at 142.44 shortly after the 6 a.m. GMT open.

"The election outcome in Greece creates significant uncertainty ahead for the country primarily and the broader spectrum of euro-area assets," said Goldman Sachs strategists in a note to clients.

The euro was trading at $1.2986 early in the European morning, dipping below the psychologically important $1.30 level and down from $1.3083 in late New York business Friday. Earlier it touched $1.2955, its lowest level since January.

The euro "has opened lower in the wake of weekend elections in France and Greece. The euro dropped at the start of Asia trade and pressure has yet to abate as the session has progressed. The risk is that the euro declines further in the days ahead," said CitiFX in a strategy note.

Yields on Greek 10-year bonds jumped in early business Monday, while there were more modest increases in other European sovereign bond yields. The Greek 10-year bond yield was quoted at 20.64%, up 0.43 percentage point. The equivalent French yield was up 0.03 percentage point at 2.86%, Italy's was up 0.08 percentage point at 5.70% and Spain's was up 0.07 percentage point at 5.79%, according to data provider Tradeweb.
 
Earlier, Asian stock markets tumbled. "Across Asia, markets have been brutally sold off after election outcomes in France and Greece caused deepening Europe concerns," said Stan Shamu, market strategist at IG Markets in Melbourne.

"News of the [French] Socialist Party's victory hit markets by storm today as we saw risk assets drop straight after the open. Reports that fringe parliamentary parties have made substantial electoral gains in Greece are also of significant concern," he added.

Hong Kong's Hang Seng Index declined 2.7% while the Nikkei 225 dropped 2.8%.

In other markets, oil and gold prices also dropped as investors pulled out. June Brent crude oil futures were down 85 cents at $112.33 a barrel while June Nymex crude was down $1.45 at $97.04. Spot gold was down $3.70 at $1638.70 an ounce.

In the U.S. Friday, stocks fell after an employment report that was seen as disappointing. The Dow Jones Industrial Average lost 1.3% while the broader S&P 500 fell 1.6%.

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Offline RE

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Re: Wile E Coyote Time?
« Reply #2 on: May 07, 2012, 01:43:42 AM »
From the last post, here is some real good MSM Orwellian Newspeak for you

Quote
Reports that fringe parliamentary parties have made substantial electoral gains in Greece are also of significant concern," he added.

FRINGE?  WTF?  Its MOST of the population, just split up through a whole lot of different new "parties".  They are "fringe" though because they ALL don't wanna bailout the Banksters.  That Parliament should be an absolute HOOT here, nothing will get agreed on and there are likely to be fistfights on a daily basis.  Nothing compared to the action in the str4eets of Athens of course, but one can say here with some certainty that the Greek "Goobermint" is quickly becoming a quite meaningless thing. They have no real POWER here and soon they will have NO MONEY that buys anything either.  Greeks should invest in Wheelbarrows NOW!  They will need them to push around the Drachmas after they are issued.

Quote
In other markets, oil and gold prices also dropped as investors pulled out. June Brent crude oil futures were down 85 cents at $112.33 a barrel while June Nymex crude was down $1.45 at $97.04. Spot gold was down $3.70 at $1638.70 an ounce.

Sure will be interesting to see how the commodities and in particular GOLD reacts to all fo this.  Margin calls could force out a LOT of Gold onto the market, while conversely some folks still flush will want to BUY Gold in Europe.  Overall though the lack of available CASH in the hands of most people to buy Gold is a dominating factor in the supply/demand equation for Gold. I think Gold may get hit significantly here on this leg down.  For the Gold Bugs here, wait a bit, you may have a real good Dip to buy into.

For right now though, the Almighty Dollar is King.  If you are holding Dollars, short term you are on a Rising Star.  Everybody in Eurotrashland is going to flock to the currency of the Big Ass Military.  the Euro Titanic just  hit the Iceberg.


RE
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Re: Wile E Coyote Time?
« Reply #3 on: May 08, 2012, 10:07:19 PM »
Looks like the action will pick up going into Hump Day.  Gold will be very interesting to watch, and WTI as well.  MARGIN CALL TIME in Eurotrashland.

RE

From Zero Hedge
http://www.zerohedge.com/news/overnight-markets-plunging

Overnight Markets Plunging
Submitted by Tyler Durden on 05/08/2012 22:31 -0400

Reality

Just as we warned at the end of today's nonsense, the afternoon ramp is fading fast now as the sad but true reality of a sun that rises in Europe awakening the maddening crowd. EURUSD is at 1.2970 (70 pips off the late-day swing highs already), ES (S&P 500 e-mini futures) are down 10 pts from the closing swing highs (which just happens to coincide with Sunday night's gap-down opening level around 1354.25), Silver has slumped back to the day's lows around $29, Gold back under $1600, and WTI is down around 2% from the day-session close at around $96.50. Treasuries are leaking lower in yield but FX markets seem very active as AUD drops to near parity with USD and carry pairs are generally weak. There are still a few more hours until Europe opens so anything can happen but for an overnight session, markets are not happy.

EURUSD not happy at all...



and nor are US equity futures...



But commodities are getting hammered again overnight (margin calls?)...



Once again - the intraday reality of credit markets (Corporates and Treasuries) is seeing equities converge lower to shake off that end-of-day insanity ramp. Clearly signaled by equity futures dropping back to CONTEXT (broad risk asset proxy) - though the latter is also fading fast this evening...



...and for the next time some equity analyst talking head scoffs when you tell them you use credit market information in your analysis - here is Bank of America's equity reality check writ large post stress-test results...just saying...



Charts: Bloomberg and Capital Context
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