Skip to comments.RED ALERT: FX Dislocation In Process
Posted on 02/16/2009 7:47:40 PM PST by dangermouse
I do not know what is going on here, and I don't think I want to.
Someone, apparently someone in Asia, wants dollars. A LOT of dollars. There is a forced-liquidation event underway that is massive, it is against all asset classes and it is spreading.
It originated at approximately 7:15 CT this evening and originated out of Asia somewhere. All of the primary currency crosses got hit at once - Euro, Pound, Yen - all weakened dramatically against the dollar and it is still going on. The Asian stock markets got walloped at the same time in coordinated waves of forced selling.
At the same time the US futures markets got nailed as well, down some six handles on the /ES in a near-vertical drop. While this sounds "not that big" to move these markets in a coordinated fashion like this is a trillion-dollar enterprise - this is not some small company that went bankrupt, or even a large company.
There is no news coverage at the present time identifying the source of this but it is not small and contrary to some reports it is not "automatic selling"; this is forced liquidation.
Folks, if this translates into Eastern Europe where there are severe instabilities already brewing literally everything in the financial world could come apart "all at once."
The worse news is that if this happens Bernanke will have killed us (in the US) by extending those swap lines all over the planet during the last six months. These will become utterly uncollectable and they are massive, in the many hundreds of billions of dollars.
To those who are reading this, I hope if you're in the markets you are prepared for extreme levels of violence. You must expect that the authorities will try to arrest the destruction if they are able, but you must also be prepared for the possibility that we have reached a "critical mass" point beyond which "duck and cover" is the only winning strategy.
I hope I'm wrong; this is going to be a long night.
Ping for your input.
I have no idea what all this means but I sorta read: BAD BAD BAD
I agree ! What is up with the nuclear bomb montage?
Welcome to flights to quality...and deflation.
Just posted it on this thread:
U.S. Futures heading way down. Gold and Silver up big... something is going on. Thanks for the info.
Would you mind putting this extremely bad news in layman’s language so we can understand?
Are you looking for a job?
Note: This thread is updated on a regular basis.
One thing that is going on in Asia is the buggest run on a currency in history - the Ruble.
Another is almost $2 trillion in short term debt to Western Europe from West Asia and Eastern Europe and its really not clear they can pay.
This will put some large European banks and even countries at risk.
Gonna be a heck of a ride and the U.S. is better off than most others. Thus the flight to dollars.
Oh, come on. Obama and the Democrats eat “hundreds of billions” of dollars for breakfast. Trillion is no longer a insurmountable sum. Have no fear, the Obamassiah’s gonna save us.
Got it......damn !
From what I understand, Poland is about to default on debt. Same with Ireland. The Euro is tanking on this news, dollar soaring, temporarily at least. Big worry is that counterparty risk through derivatives will cause the defaults in Europe to “jump the pond” and the whole ball of wax starts melting down.
Yikes bump for look tomorrow morning!
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