Eurobear Squeezes and Footy Swaps

Well the beginning of last week saw Europe tanking, US data doing ok and China continuing on its tightening theme. But now we have bad US labour data, China increasing money supply and the short Euro play being bazooka’d by the ECB.

Due to Unforeseen Circumstances

Right, folks, before we start, as an answer to the market mosquitoes constantly buzzing around with their high pitched whines of dark-battle-death-star-galacticas on the SPX charts, encouraging us to mortgage the kids to load the boat of shorts, we do recommend “Star-No-More” or ” Death-Star-Off” – whose active component can be seen on this post on “The Big Picture”. It would appear that the active ingredient in dark crosses is at best homeopathic.

The Precious and the Not So Precious

The bounce continues today in commodities. One interesting aspect of this April blowout and subsequent bounce is that precious metals have gone from being all look same to all look inverse. These things tend to move with pretty tight correlation since they are both seen as inflation hedges though when things get frightening the platinum group metals (PGMs – Patinum, Palladium and Rhodium) tend to get puked out since they are seen as an inflation hedge but not a viable unit of currency.

High Tide for the Financial Sector?

What Goldman taketh away, Goldman giveth. That appears to be the motto of the past few days, with Fraudulent Friday now a distant memory as the market basks in the warm glow of yet another solid quarter from the good ship GS.

5 Points

1) Tim Geithner should consider changing his name to “Stradivarius”, because the Chinese have played him like a fiddle. A week of Chinese no-shows at Treasury auctions, and Tim is left scrambling to placate Beijing. His decision to delay the release of the “currency manipulation” report in favour of bilateral discussions left Macro Man literally laughing out loud. If a one week buyer’s strike is all it takes to save face and buy the Chinese a few more weeks/months of piss-taking, well, let’s just say that Timmy Strad is in over his head.

Pump Up The Volume

We’re now little more than twenty-four hours away from one of the most critical periods of the year. Macro Man is finding it increasingly difficult to contain his excitement at some of the price action he’s seeing, but until we navigate tomorrow’s ECB tender and Fed announcement, he’s trying very, very hard not to go […]

The Catalyst

It’s a big, big week. Now that option expiry has come and gone (bringing with it the requisite squeezy screw job), markets can focus on Wednesday, which sees the results of the ECB’s one year “wheelbarrow” tender and the Fed announcement, where we’ll get their reaction to the recent carnage in fixed income markets. Beyond […]


Macro Man is scuffling to put out a few fires in his portfolio today, courtesy of a painful expiration goolie-squeeze and the sort of correlation breakdown that was discussed in the comments section of yesterday’s 20 Questions. While yesterday’s macro data was better, encouraging a bump in stocks and a drift lower in bonds, the […]

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