Colombia intervenes surreptitiously to push peso down

 

 

Similar tactics are easily implemented in the precious metals markets

 

 

Something Breaks: ES, Carry Crosses Tumble

Submitted by Tyler Durden on 05/24/2011 21:15 -0400

Out of the blue, ES just dropped a good 5 points. Yes, in the good old PCP (Pre-Central Planning) days, this was perfectly normal, but since now we have a whole army of millisecond, algorithmic robots and a whole floor at 33 Liberty dedicated exclusively to making sure things like this never happen, it is rather disturbing. And in tried and true (anti) correlation fashion, the USD/JPY are jumping against all carry crosses. As far as we know this was not predicated by any news: granted, export news out of Japan were horrendous (12.5% Y/Y drop), but those should have been mostly priced in. Having observed the overnight futures every day for the past two years, this kind of thing "just doesn't happen" any more, which is why we are eagerly searching for what may have been the catalyst. If we find one, we will promptly update. In the meantime remember: he who defects first, defects best.

Silver's tightness could take it to $125, Embry tells King World News

 

Maybe someday they'll notice JPM's and HSBC's gold and silver custodianships

SocGen On Why Japan's Plunging Pension Reserves May "Cause Havoc" To The Japanese Bond Market

Submitted by Tyler Durden on 05/24/2011 20:27 -0400

A month ago, we reported that the Japanese public pension fund, which holds JPY152 trillion in total reserves, would for the first time withdraw 6.4 trillion yen in order to cover pension payouts, a process which once started, eventually ends up with the "Illinois" conclusion where it has to issue bonds to pay accrued pension obligations. The reason why the Japanese pension fund is particularly important for japan is that not only does it have implications for the welfare system of the land of the rising sun, any future dispositions will explicitly affect the supply and demand of JGBs, of which pension funds have traditionally been a major buyer. Not only that, but as Dylan Grice reminded us some time ago, a liquidation process would also impair US Treasury holdings: " As Japan's retirees age and run down their wealth, Japan's policymakers will be forced to sell assets, including US Treasuries currently worth $750bn, or Y70 trillion "eight months" worth of domestic financing." Today, another SocGen analyst, Takuji Okubo, presents a realistic outlook of what will happen when one takes government projections to the pension system and applies realistic assumptions. In a nutshell, instead of a build up of JPY100 trillion over the next 15 years, pension reserves will likely decline by JPY36 trillion, a swing of almost 140 trillion, or nearly $2 trillion in incremental and very marginal JGB and treasury demand actually becoming supply. And in a world in which the Fed is suddenly (allegedly) pulling out as the biggest source of sovereign paper demand, this swing factor out of Japan will have substantial implications for the bond market, especially when coupled with a Japanese economy that suddenly finds itself on the rocks.

4 Hour Silver Chart

  

posted by Trader Dan at Trader Dan's Market Views - 1 hour ago

Silver pushed past resistance at the top of its narrow range which came in near $36. It ran higher in very early Asian trade but has not been able to extend its gains and push beyond $37. It has a band of ...