Don’t be surprised to see the dollar rise against the Euro, as the EZ tries to punch its way out of the paper bag they find themselves in. At the moment, the euro is down more than 0.6% against the dollar–sending chills throughout Asia and S&P futures. However, is this really a surprise? The euro has to trade down because it’s their turn to QE. Under a loose EZ, I suspect the US dollar will appreciate with stocks. Should that happen, traditional correlations will be thrown into disarray, as people expect the dollar to weaken in order to green light the purchase of stocks. Not necessarily.
Nevertheless, there is a good chance we trade down tomorrow, especially once the European bond crisis resumes trading. If French yields climb again tomorrow, we’ll nosedive quickly. But you should appreciate the sense of urgency being applied to the European pussies. They can’t procrastinate any longer. Blueprints will not suffice. The world demands towering skyscrapers with anti-aircraft batteries on top.
So, for me, this is pretty simple. It’s easy to sit back and watch the panickers manically panic. The Germans don’t have the stones to ignore this mess and elect for mutual destruction. This cold war will be won by those camped out near the fireside.
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FIG
Damn it! I went 2x leveraged long today. Luckily, all my positions were up 5% by the close so it won’t hurt that bad if we gap down a few percentage points. Still, it does put a damper on things…
5 second breadth analysis…
http://stockcharts.com/freecharts/candleglance.html?$BPNYA,$BPCOMPQ,$BPOEX,$BPNDX,$BPSPX,$BPINDU,$BPDISC,$BPSTAP,$BPENER,$BPFINA,$BPHEAL,$BPINFO,$BPINDY,$BPMATE,$BPTELE,$BPUTIL
are these ready to go down, or go up?
To the moon!
LOL…WTF do you know about Pusha T?
I am Pusha T
If Fly ever rapped, I always pictured him as Twista.
Moving faster and way ahead of everyone else, but completely crisp, along with his creative hilarious lines that he pulls out of his ass effortlessly.
Listen closely, I think some of these lines you could probably find on his blog.
http://www.youtube.com/watch?v=eHOshGKPWvc
He’s got the creative swag. I’m surprised I don’t see more Twista videos on here since Fly knows Hip Hop. Fly, no love for Twista?
Fly-like things mentioned:
shitting on their cocky styles; bashing peoples face in until their jaw tissue looks like a pelican; balls bigger than mine? better find an elephant; Getting more money than a GD in a crackhouse… etc.
Does this not sound like The Fly if he had to rhyme?
“I’ll be passing out “fuck you” fliers.
to fakers and haters, and then fuck liars.
If your shit ain’t 1 AND1 mine’s just the swine flue H1N1 virus.
Am I like Jason? No I am Michael Myers.
I am the shit, I need to wear diapers.”
the correlation of the dollar goin to zero so assets go up must die. but the transition wont be easy.
VA Rep Cantor on Wallstreet Journal CSPAN special.
The “GraphFeeTease” (Tm 50% any users) on the wall.
!!!Marquette Crash!!!
What?
How about euro companies that earn US$?
It’s impossible to get any freaking sleep around here. Isn’t it?
@blindant – can you please tell me what language you’re posting in so I can fix google translate? I got the part about Cantor the snark, but not much else. Thanks.
No prob.
Cantor’s appearance on CSPAN, think Socialist by charter (but for “Constitutionalists” founder[s]), means House’s “Super Budget Committee” will defend Our (USA) House.
This means that we (“R”) will protect the USA, preventing further Marxist/”Keyseian” Economiqes where “‘good’
talkers” spend “valuable electorate’s” (meaning TRUE voters) money at the sovereign’s expense.
“THIS MEANS REPUBLICANS ARE WILLING TO FORCE THE DEMOCRATIC/SOCIAL/LIBERAL/COMMIES TO SUFFER 2012’S QUARTERS FOR THEIR COMMITTED, INTENTIONAL NATIONAL SUICIDE THEY CREATED BY DESIGN.”
Please no response if that’s confusing. Thanks for curiosity. “Suchness” (credit M. LeFly) is always welcome.
LOL, thanks. I’d reply in greater depth, but I’m typing from one of those tablet touch pseudo keyboards. Certainly not conducive to proper blogging.
This makes sense only to folks whose politics are to the Right of Attila the Hun– that is, a lot of the folks who comment on this site.
As if Cantor is some great national hero, and pure as the driven snow, just like all the politicians who have an R behind his name. If you believe that, I have a bridge in Brooklyn to sell you.
Good atilla line
atilla straightened out Italy.
except Rome …
No Sino-Phobia, but you’re all incorrect.
Dismissed.
Is your bridge honestly for sale?
don’t have experience with forex, but thinking it through…
-some strength (as we have seen for 2 years) sort of must underlie the Euro as European citizens and governments scramble to collect them to pay down exorbitant debt (said scrambling creates demand)
-eventually there is at least a solid chance that it collapses.
I wouldn’t be surprised to see general strength followed by heinous collapse.
If they save the union (create currency is a critical component of this), it could then weaken (as it probably should) against the dollar.
again, no experience in forex just guessing.
Best Advice:
1) Be facile with your telephone keypad.
2) Get “decimal” friendly.
2) Appreciate pip/tick v. lot size value versus margin and working capital entries and exits.
How long until Merlin runs out of his disappearing potion? This is getting old.
I think his return may be sooner rather than later. I’m staying up late to watch the return of Celebrity Death Match on MTV Euro – “Merlin versus The Turkey Gods”.
“The world demands towering skyscrapers with anti-aircraft batteries on top.” Good luck, the Euro guys all wear blue helmuts and drive around in white washed armor.
Fly is it still BTFD thru Turkey or is this waterfall time?
Getting some serious inflation going seems the only way out of this mess.
But how do you inflate the world’s reserve currency, especially when all the other currencies are trying to inflate against you?
And with high unemployment how do you go about making things more expensive?
Or if you could get all those companies to spend some of those trillion bucks they are hoarding?
Its a fucking conundrum.
What’s confusing? Spain will try to auction off 4 Billion Euro’s of 10 year notes at the highest rates since joining the EZ. France will try to auction off 1-4 year notes. The Bond Love Vigilantes [sic] have taken up permanent residence in the EZ, somewhere west of the Austerian Alps [sic]. Failure is not an option, but I think that strike expires tomorrow.
still waitin for the epic collapse yogi? good luck dude. you and alf and the nympth gonna get a lot older.
Epic collapse? No, just the breakup of the EZ, and the coming US Recession. I am never a perma-bear. I’m not net short, I just have my LT longs hedged.
Remember just because my avatar is a cartoon bear, does not mean I am.
Want inflation? hand out 1M stimulus money for ordinary citizens and zero sales tax for the next year. prices of every day shit will rise.
The Powers That Be can only control the stock market. They will inflate that soon– although not necessarily tomorrow– and then they will hope the inflation will spread to housing and other areas.
At what point do we start referring them to “The powers that were”?
Um. Are you reading headlines from the last 2 years???
Don’t be so sure about Germans. It may be prudent to keep a Gotterdammerung clip available.
Siegfried’s Funeral March?
Brünnhilde’s Immolation Scene
Of course. Pass the Riesling if you please
I was waiting for The Fly to suggest a down day.
It only makes sense after three up days, while Europe disintegrates before our eyes (with no slight of hand)
I am looking into the future and I see:
1) That this run-up is just that, a run-up.
2) That the reality is going to settle in on most companies, there will be much slower growth for the foreseeable future.
3) That after the massive and excessive pounding down that we experienced in the recent past:
a) It will make some of these stocks look like the dot-com gems of ’99-2000 (Anyone remember Verticalnet symbol:VERT?)
b) I would hedge hard and strong on any long positions from here on out…to the immediate future.
c) They say this Euro crash will last DECADES. Just like our own US R.E. Bubble, where the banks have been holding back their repo inventories to prop up prices. They tell me that is a 10-13 year deal, too.
d) Gold and Silver…it’s a good thing.
e) The Fly is a genius.
f) Carry on.
p.s.: Gold Bless America (we need it)
or maybe bleeding just edge? anyho
what’s that game where you stack those wooden blocks & have to remove other blocks to stack them higher? That’s what we have here – and not just here. In the short run, it’s zero sum; longer term we can make more blocks, but we’re stacking faster than we can produce new blocks… can’t last. Looking to the horizon, the clouds are dark, but that’s not everywhere. So where is the sun shining?
Not sure but I’m catching a bus to New Youk to find out. I will report back. http://mongoliagrowthgroup.com/MongoliaGrowthGroupNov2011.pdf
Glad to see the editors are hard at work.
Print the news that’s fit to print.
Market going down soon.
Buh-bye.
Amazing how well Michael J. Fox has held up, given the circumstances.
It looks like a good thing he’s doing with Nike…check out this clip:
http://www.youtube.com/watch?v=3yiSdjwi_bg
Fly I am reading Don Quixote right now but you should read Atlas Shrugged by Ayn Rand.
FLY, I really liked the previous blog about your time in 2001/2002. I wonder if this passage of fire is required for all great traders?…OK, If QE is issued out of ECB, which they won’t, the Euro will actually rally. Flooding the world with Money anywhere (even with BoE money) flows right into the Major trading houses that buys commodities. Oil Moves up and Petro Dollars need to be diversified into euros, the play book of 2009-present. US dollar is going to have to get stronger when USA stops their QEing for good. German exporters have been talking about how they can survive without the euro. I am still looking over my shoulder for that Turkey God after that Oct rally, but once that is done, there will be no QE out of ECB, no fixes, just my wonderful bearish world back…and Oct will be history.
http://www.thelocal.de/money/20111109-38759.html in case someone asks.
its going to be a difficult market until Europe creates currency.
period.
gun to my head, this time, QE won’t suffice. the stakes are end-game now in eurpoe, the market won’t forget for another year over a clearly pointless ESFSEDSADGADSFEFSFESFS
even if its “levered to 11dy billion dollars”
which it won’t be, because who the fuck in their right minds would buy it? christ
complex market 3 montsh ago, super simple now, your bet is: … drumroll…. does europe monetize or not?
Dont think they can print outta this. If they do commods will get creamed and so will the financials outta fear they are insolvent.
WIthout these two classes participating I cant see how stocks move higher.
These austerity cutsare also going to slaughter the GDP numbers.
Europe is Fucked with a capital F
Wait a minute. Weren’t we cheering austerity. Yay for austerity, translation the pitiful growth you have gotten was derived from borrowing and financing. Now you need to get actual growth as we cut, slash, withhold, and contract.
GDP expansion? NOT
I say we send the ‘Fly’ to become the new ‘Napoleon’ and whip the euro-fags into shape over there. I want to see the ‘fly’ pee on Sarkozy’s breakfast croissants…
Correlation fuckers are always late to the party and are the drunkest at the end.
As I said two weeks ago, the stock market and the dollar can work in tandem pushing us higher. If we narrow our view to the immediate term, we have seen PMI numbers in Europe come down, EU GDP numbers drop a little, EU retail sales drop, global growth expectations cut, US GDP up, Fed manufacturer numbers halt their contraction, decent US retail sales, US trade deficit shrinking a little (also a new trade pact announced), a US government that remains spendthrift (debt ceiling raised), and the US exhibiting the strongest stock market globally. Prolonged low interest rates in the US tip investment plans by US corporations to pull forward capex due to increased attraction via their NPV/IRR calculations that use miniscule discount rates to assess investment. It also helps that IRS code 179 of accelerated depreciation favors capex (software and industrial equipment). So you have a backdrop for non-speculative flow that demands USD, which the markets are starting to confirm.
The high interest rate currencies representing strong carry net interest margin have unwound vis a vis AUD/USD while speculative flows remain strong in the yen. Speculators have exited the CHF after the SNB interventions and are in the process of leaving the euro after the ESFS headline carpet bombings. Safety may return to the CHF, USD, or JPY as they represent relatively stable currencies. So speculators may return to the USD- two checkmarks.
Food inflation has affected non-US countries to a large extent but in recent weeks it is becoming evident that crude oil is taking the place of food commodity based inflation. If you notice on the St. Louis Fed’s website (http://research.stlouisfed.org/fred2/categories/32217), while regular unleaded prices have started to come down, diesel prices are increasing. One form of causality supporting this effect would be that there is economic activity to support crude as most heavy moving and industrial vehicles use diesel. Inventory must be moving throughout the supply chain too, albeit negatively as businesses pare down some goods held amidst uncertainty. Anecdotally, strong e-commerce sales can supplant weakening retail sales as gasoline sales tugged down the latest numbers while electronics and appliance stores were the biggest drivers. A need for dollar-denominated commodities provides further support for the USD.
Therefore, I don’t this will support a full blown bull market. The Asian trade balance still remains strong and currency spats between China and the US are ongoing and unresolved, uncertainty remains prevalent in what US banks hold on their balance sheets in terms of EU debt, the government budget is still being debated, and housing and unemployment are the albatross around the neck of the Fed and DC, and QE rhetoric in the US is riding the bench for the moment. I think we can see some strength in the US stock market (tech) and the USD as long as the above state of affairs perpetuate, but as the above uncertainties become realities it will easier to see if a bull market lies ahead.
The USD can outperform to an extent as a currency of safety but its low interest rates detract from its attractiveness for speculative longer term capital inflow. Also, as the capex spent by corporations comes online, money velocity can pick up and the trade budget should reverse.
These are just some things I’ve been thinking about that I wanted to write down but couldn’t fit into a 140-letter message.