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hardnox
Advisor

"extreme financial stress"

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100026831/fire-sale-of-us-treasuries-is-...

 

"Russia’s central bank is undoubtedly liquidating reserves at a breakneck pace to prevent a collapse of the rouble, as foreign companies scramble to get all their spare cash out of Russian accounts before the G7 guillotine comes down on the Putin clan next week. It is certainly trying to remove its assets beyond the jurisdiction of the US authorities – though that will not be easy. The SEC takes no prisoners. In the end, the world is more frightened of US regulators than it is of Putin's tanks or his polonium. Soft power can trump hard power.

One investor told me that clients in Russia are literally loading up cars with computers, machinery, and anything that will fit, and rushing them out of the country for fear that assets will nationalised. Whatever happens, nobody will forget this in a hurry.

Yet the latest financial ructions go beyond Russia, they reek of stress in the international system. “Countries are intervening all over the place to defend their currencies, (which means they are tightening). Their central banks built up huge war chests of reserves for a rainy day, and now it is raining,” said David Bloom, currency chief at HSBC.

Indeed it is. The international order is unravelling. Russia is of course smashing the post-Cold War order by seizing Ukraine, and blowing up the global architecture of nuclear non-proliferation. Let us not forget that Ukraine agreed to give up its nuclear weapons – the world’s third biggest arsenal at the time – in exchange for a guarantee by the great powers in 1994 that its territorial integrity would be upheld. Russia was one of the signatories."

 

Probably Russia dumping US treasuries which have, somewhat counterintuitively, rallied. As Ambrose notes, net effect is a global monetary tightening across the board.

 

Reuters/Jeffries CRB sports an island top after an epic short covering rip.

 

Be careful out there.

 

Shall The Pooter, NY PR firm and all, be the Kaiser Wilhelm of 2014?

 

 

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8 Replies
425Cat
Advisor

Re: "extreme financial stress"

Scary times indeed.
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c-x-1
Veteran Advisor

Re: "extreme financial stress"

only thing i disagree with is the crb being "done"

 

i know we don't live in "Kansas" anymore. i.e. 70's when treasuries were bloodied sold and stocks/commodities still went up.

 

it's a different paradigm, but, but.......some natural laws of the universe are still in effect......just sayin'

 

if it's all doom and gloom -- maybe we all won't be talking on here Mon???

 

for all i know, a 10 mile long asteroid is on a t minus 48 hr direct hit on earth - - could be part of the scheme - the powers that be keep it hush - part of the grand plan to get us ALL outta this stress/mess & moving along to greener pastures.....Smiley Indifferent

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tree fmr
Advisor

Re: "extreme financial stress"

I just took a look thru my Hobby glasses and that lost airplane is up there guiding the asteroid in. Look out Kansas!!
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hardnox
Advisor

Re: "extreme financial stress"

Yeah, by my "best" count I was expecting another upleg on the CRB to the 600 range (CCI vs RJ that was mentioned).

 

Some individual markets diverging from that opinion and as I said, the island, and exteme shift in bullish sentiment, have me wondering.

 

By some counts we rolled all the way back to the same high levels of big spec length as back in 2008 and 2011, all in 4 weeks.Wow.

 

Which I guess more than anything makes me feel exceptionally stupid for thinking that index/hedgie empire wouldn't strike back. On the other hand my previous observation might suggest that they're fighting a losing game longr term in trying to reincflate a bubble.

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hardnox
Advisor

Re: "extreme financial stress"

PS. I prefr the CCI to the RJ CRB, maybe just as a matter of long habit watching CCI.

 

But anyway, the RJCRB chart also sports a classic 3 gap sequence. I'll have to go back an look it up in Edwards and Magee but I think you can't really call a top until the breakaway is filled, which is a ways down.

 

So a reasonable discipline might be to wait and see whether the (potential) exhaustion/island gap or the breakaway fills first.

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Hobbyfarmer
Honored Advisor

Re: "extreme financial stress"

You and Jenny may have something...just checked the 7 day weather... ends on Tuesday. 

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c-x-1
Veteran Advisor

Re: "extreme financial stress"

re: spec $$ flowing into the hards -- whatever commodity one is talking about - or all, for that matter -- has to have some fundamental/economic story.-- i.e. specs can't force a market that has absolutely no gristle to it. eg. softs.

 

one thing perplexing (concerning) in precious --  in a true bull start - normally, silver is leading.........here, we have it backwards with gold taking charge............heck, i suppose this could support the "extreme stress" postulate --- where $$$ flowing in here really is for safety/security?

 

that SI minus GC spread ALWAYS seems to be a good indicator..........so, perhaps even they are about to correct some.

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c-x-1
Veteran Advisor

Re: "extreme financial stress"

also--

 

not so sure equities will have too deep of a correction here -- COT......when yer talkin' 4-10 yr impulses, difficult to pinpoint end of #3 to 1 particular week............................

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