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.
Click on live cuyrrency rates on the side and choose the US dollar
I think this is a hoax
That gap will be filled sooner or later.
I agree right now it look relative calm. Have seen lots worse. Someone may be trying to spook the global markets into a crash.
Everybody calm down - dont buy or sell on raw emotion. If the world dies tonight its already to late for you to do anything.
thanks for interjecting sanity,,,
now, I’m off to the ATM and then the lifeboats! :-)
probably Clinton’s trip to Asia.
Is there a run on pantsuits?
Have to admit this thread has told me that I don’t have a clue about what is going on in the world financial markets. Layman’s language would be nice.
Have little left in the stock market so I am sitting back watching what is going on worldwide and understanding very little.
And yes he should be screwed if it is found out, but since when does he get tagged, by those in govt or the media! When he pulled it in Sept, and I have no doubt it was him, not a peep out of anyone. Of course there is always the possibility that a lot in govt are not only aware, but helping. Being who is in charge now, and who was in charge in Sept. at Treasury, I wouldn't doubt it.
You have gone in to the Tag Line business, I see :)
OKYO, Feb 17 (Reuters) - U.S. Treasuries rose in Asia on Tuesday as a slide in share prices and concerns over a new round of troubles in the global banking sector prompted investors to seek the safety of government debt.
Moody's Investors Service said on Tuesday the recession in emerging Europe will be more severe than elsewhere due to large imbalances, and will put financial strength ratings of local banks and their West European parents under pressure.
I like your comments! Chill seems to be the word right now.
Not sure they want dollars so much as they want to sell dollar denominated assets.
Burning the printing presses certainly worked for Zimbabwe
It’s the same problem that we have, overleverage. “Innovations” in finance that supposedly reduced risk, but did no such thing, credit bubble, real estate bubble, etcetera. It appears that Europe, at least, went further into financial lala land than we did. I’ve seen estimates ranging from US$16 trillion to US$27 trillion for EU problems alone. Makes Obama look like a piker, but then he’s just getting started.
it’s not that hard, you take the square root of the beta of the short derivative price divided by the value of the British pound in yen, multiply by pi, convert to euros using the 6 month forecast value and the spot price of crude oil, then buy ammo and three 50# bags of rice at Sam’s Club...
and don’t forget to hit the cash machine afterwards.
works for any situation...
He's a sneaky guy. He doesn't go to France (where he's been prosecuted and convicted) and a number of other places.
Modern electronic communication systems allow him to mess around with wherever he wishes.
Well, being a FX and S&P index tactical trader (run my CTA firm), I can tell you it’s a bit uncertain as to what turn all this will take. My models got completely blown up in Oct, BUT, with a bit of adjustments we made a killing in Nov. And, now, things have definitely come back down to ‘normal’, ie, daily swings are not hair raising and VIX (the fear index) has come down to a much less ulcer inducing 40s from the (’run for the hills’) 80+.
I’m keeping an eye on the eastern Europe, BUT, all this was known long time ago. All of them went begging to the IMF in October, and they’ve been taking steps to mitigate things. Even though things look pretty rough, most of the money that was going to has already pulled out of Russia and Eastern Europe.
Of course, with the damn Spendulus, inflation will be rearing its ugly head sooner rather than later. But I don’t expect that to start seriously showing up until later this year.
ROFLOL! ATM I understand completely along with the ammo and rice! :)
That's the money quote. Someone making a run on currency to destabilize things so that the INEVITABLE sell of treasuries notes (Bonds) will be welcomed by people that are scared pooless of what's going on in FOREX.
Almost like someone is setting all this up for a sale of bonds ... maybe related the porkulus being passed and a need for dollars?
I rooting for the S. Koreans because this Country would be a lot better off and ZERO would lose his benefactor.
No, but from the looks of her there might be a run on hair gel and pancake makeup.
“Ok, there IS NO run. A 150 pip move is not a run.”
Thanks for bringing some sanity to this post. I’m with you on this one. But absolutely nothing would surprise me right now...
Five letter word — SOROS!
bump for tomorrow.
Thanks for the post.
well, I bought extra dish soap and salt today...I am stocked on plastic wrap,many spices, paper plates and napkins,hand soap,liquor,plastic zip lock bags,canned goods,sugar,oil,rice,personal items,etc...hubby has the ammo....wood is cut and stacked....now if we just had some money...
Buy both..and lots and lots of ammo.
I am with you 100% — thought I had things figured out and then got caught up in this thread. Usually I read something once and understand — second time through the original post and I still didn’t have a clue.
That's why Democrats like 5-year plans. That way you only have to worry once every 5-years.
Thanks you two!
Me, too. I have this vision of a Korean 007 taking out Soros the bad guy.
Hey, I did my part.
I bought a Polish canned ham yesterday at the supermarket.
You all can thank me tomorrow.
Yeah. Bloomberg doesn't have a panic signal.
Euro is at $1.26+, down 120+/-. Been looking for parity at $1.20 since the flight to foreign currency ended in 2007.
Sterling at $1.42+, down 49, looking for a historical conversion at $1.40.
Someone who likes gold also likes red lights?
WHo were the two Daves tha taught us so much the other evening?
From your comments, it sounds like a lot of people in charge were clueless and didn’t stick with what works. I can remember when Rubin was using the Federal Thrift Savings money to prop up the market so it wouldn’t correct under Clinton so he could have everything on the rise. I was appalled but it sounds like it is even worse with the “innovations” in finance. Stupid people, media, and voters who buy into all of this and give us people with no experience like ZERO.
Cannot even fathom $16T to $27T in US dollars. What were they smoking?
The currency markets have been quite hinky lately. Something is happening below the surface. The markets have quieted down now but who knows what tomorrow will bring?
I have been sitting here trying to remember. I think I am getting closer to figuring out what they are talking about thanks to Regulator Country and RaceBannon. Two Dave’s are always right on top of things and explain very well what is happening and yet I cannot remember their screen names. This time I am writing them down.
That would make a very good movie!
That would make this great news. Maybe enough people can spot Soros' MO at work that it's no longer effective.
Was cedardave one of them?
Then there’s davefromnevada...
I wasn’t on the thread, just throwing daves off...
If only.........but the bad and evil seem to go on and on and on.....
Just got off a chat with an Australian trading contact of mine. Nothing to see here folks. Just a bit of trading going on after the Bank of Japan discussions. Looks like market will be selling a bit but let’s all chill and see how we fare through the London session that opens in a few hours.
I bet that is what the Caption of the Titantic said as the ship was going down.
LostInBayport: IMHO, we are now in a deflationary period. When you see something you need that is at a price you can’t resist, buy it if you can afford it. Inflation is around the corner, but only God knows if it will be in 3, 6,12 or 24 months. My guess is sometime next year. This is a great time to have a kid’s coin collection; real silver dimes and quarters that aren’t in pristine condition. Much easier to get food with if things get that bad. And, if things DO get that bad with guns and ammo you can shoot something to eat or shoot someone that wants to rob you.
the sheeple will suffer...then again, they deserve what they want and they are going to get it good and hard.
ROFL....math solves all...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.