Fed's Twitter Arrival uZIRPed By Hecklers, And Real Time Fed Twitter Tracker

If the Fed thought it could boldly go where hundreds of millions have gone before (in a vain attempt to be cool, hip and relevant - Twitter of course - with the @FederalReserve handle naturally), all in a quest for faux transparency and openness, which nobody who is even remotely familiar with the Fed's actions is buying, without getting a few heckles in the process, it was wrong. Unfortunately, as the currency debasement race has simply taken a short breather ahead of a presidential election and a possible regional war with wide-ranging commodity price implications, before it resumes into the frantic final lap, the below sample is merely a modest appetizer of what is yet to come.

Dear Germans: Bring Out Ze Checkbooks

Something funny happened on the road to a "fixed" Europe....

 

 

Greece/Ireland/Hungary/silver open interest remains high/ECB issues more margin calls/Target 2 showing big discrepancies between Germany and rest of PIIGS

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 44 minutes ago

Gold closed down $51.20 to $1642.50  Silver followed suit down $1.84 to $31.87. As I promised you yesterday and on other commentaries the open interest on silver is certainly bothering the bankers as no matter what the bums do, no silver leaves (OI) are willing to leave the silver tree.  In gold, in looks like the ECB is issuing major margin calls (see below) to the banks and since there is no

 

 

 

 

Listen Up Muppets: Goldman Wants You To Sell TYM2 - Is The Bond Sell Off Over?

Dear muppets: Goldman wants you to short TYM2 (reminder: a key axis? check; elephant hunting? check; three letter acronym? check). Translation: every bond you sell, Goldman buys.

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Bond Collapse Continues

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

Much to the chagrin of the Federal Reserve, bond traders are taking that FOMC statement from yesterday and taking no prisoners as they literally hammer the long bond into submission. I find it a bit ironic (to be honest I am gleeful about it) that the Fed, which continues its attempts to manipulate hedge fund behavior by herding them into the equity markets, has opened an enormous can of worms and awakened the heretofore comatose bond vigilantes as an undesirable chain reaction to their "peachy" statement about the state of the US economy. Bond traders are already moving the Fed Fun... more »

 

Gold Daily and Silver Weekly Charts - Bonus Army and Business Plot

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SP 500 and NDX Futures Daily Charts

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A Public Exit From Goldman Sachs Hits a Wounded Wall Street

Eric De Groot at Eric De Groot - 4 hours ago

Sheeple be warned, nothing new here. Headline: A Public Exit From Goldman Sachs Hits a Wounded Wall Street Mr. Smith is saying publicly what others whisper privately, which is why his cri de coeur may be so provocative. Even on Wall Street — where making money is good, and making more money is better — a few shibboleths still command respect, including the one that the customer should come... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] more »

 

1-2-3 Gold

Eric De Groot at Eric De Groot - 5 hours ago

How many investors accumulated the third count or "hook" in October 2008? The short answer is not many. The 2008 hook which started in mid October and bottomed in October 24th as panic soared was completed on November 21st (see chart below). The price of gold at each stage was $800, $712, and $775, respectively. Just like 2008, nothing has changed (or changing) today other than underlying... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

Commodities Crumble As Stocks Ignore Treasury Selling

UPDATE: The UK outlook change has had little reaction so far: TSY yield down 1-2bps, gold/silver bounced up a little, and a small drop in GBP.
While most of the talk will be about the drop in precious metals today, the sell-off in Treasuries is of a much larger relative magnitude and yet equities broadly ignored this re-risking 'signal'. At almost 2.5 standard deviations, today's 10Y rate jump (closing it above the 200DMA for the first time in eight months) trumps the 1.3 standard deviation drop in Gold prices - taking prices back to mid-January levels. According to our data (h/t JL) for only the 14th time in the last five years (and not seen for 16 months) Treasury yields rose significantly and stocks fell as the broad gains in yesterday's financials (on the JPM rip) were held on to at the ETF level but not for Morgan Stanley, Goldman Sachs, or Citigroup (who gave all the knee-jerk reaction back). Tech led the way as AAPL surged once again (though faltered a few times intraday) having now completed back-to-back unfilled gap-up-openings. Credit and equity were generally in sync until mid afternoon when the up-in-quality rotation took over and stocks and high-yield sold off (notably HYG - the high-yield bond ETF underperformed all day long) while investment grade credit rallied to multi-month tights. VIX bounced higher (notably more than the S&P would have implied) recovering to Monday's closing levels and back above 15%. The Treasury sell-off was 'balanced' in terms of risk-on/-off by the strength in the USD (and modest weakness in FX carry pairs as JPY's weakness was largely in sync with the rest of the majors - hinting its was a USD story). Oil and Copper both lost ground (as did Silver - the most on the day) though they tracked more in line with USD strength than the PMs.

Fitch Revises UK Outlook To Negative From Stable, Keeps Country At AAA

In keeping with the tradition of waking up to reality with a several month delay on downgrades (if being the first to upgrade insolvent Eurozone members), here comes Fitch, to boldly go where Moody's went long ago.

• UNITED KINGDOM L-T IDR OUTLOOK TO NEGATIVE FROM STABLE BY FITCH
• FITCH AFFS UNITED KINGDOM AT 'AAA'; REVISES OUTLOOK TO NEGATIVE

As a reminder, UK consolidated debt/GDP is... oh... ~1000%
 

What Closing The Straits Of Hormuz Will Mean In 3 Simple Charts

While WTI hovers around $105.5 (slightly underperforming USD strength), Brent has notably outperformed with the Brent-WTI spread now edging towards $20 (from under $15 two weeks ago). Given the increasing tension, we thought it useful to get a grasp of just what an oil-supply shock means. BNP points out that in all but one of the historical oil price shocks of the last 40 years, equities have notably underperformed oil (understandably) but the higher the oil price rise, the higher the chance of negative absolute returns for stocks. We also note that oil prices tend to rise in anticipation of the crisis and then explode (so arguing that we are discounting an event is proved moot) and the impact (in lost supply) from closing the Straits of Hormuz is an order of magnitude larger than the next five largest events. Regionally, positioning favors the middle-eastern oil producers obviously with Asian EM nations set to suffer dramatically worse than DMs.

Guest Post: The Vampire Squid’s Problems

Smith’s sentiments are appreciated, but actually he is wrong about a fundamental point, at least in today’s business environment. Goldman doesn’t have to give a damn about its clients because the vampire squid has found a much more lucrative way of insuring their bottom line: government largesse.

On This Day In History.... Gas Prices Have Never Been Higher

Presented with little comment except to remind all those newly refreshed consumers that for every penny rise in pump prices, more than $1bn is added to the hoousehold spending bill (assuming driving habits are unaffected - which brings its own set of unintended consequential events). And in the past month alone, gas prices have increased by precisely 30 cents.

An Alternative View On Recent Treasury Weakness

The general dogma seems to be that the recent Treasury weakness reflects either a) risk-averse bondholders rotating to stocks because everything is fixed and it seems better to buy something at its highs than its lows? or b) China is punishing us for the rare-metals challenge. We posit an alternative, less conspiracy-theory, less-conventional-wisdom (who is buying the Treasuries you are selling and who is selling the stocks you are buying reprise) perspective on the recent Treasury weakness. Its supply-and-demand stupid. The last few weeks have seen massive, record-breaking amounts of investment grade USD-based corporate bond issuance, at the same time dealer inventories for corporate bonds are at multi-year lows and Treasury holdings at all-time-highs. In general to underwrite the massive corporate bond issuance, dealers will place rate-locks (or short Treasuries/Swaps in various ways) to control the yield and sell the idea of the 'spread' to clients (which is where most real-money buyers will be focused on value. We suggest that the almost unprecedented corporate issuance and therefore need for rate-locks has provided a significant offer for Treasuries that the dealers (who are loaded) and the Fed (who is only minimally involved) was unable to suppress. The key question, going forward, is whether the expectations of a much lower issuance calendar will relieve this marginal offer in Treasuries and allow rates to revert back down?
 




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