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RED ALERT: FX Dislocation In Process
Market Ticker ^ | 2-16-2009 | Karl Denninger

Posted on 02/16/2009 7:47:40 PM PST by dangermouse

8:17 CT

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.

Unfortunately.

I hope I'm wrong; this is going to be a long night.


TOPICS: Business/Economy; Foreign Affairs; Japan; News/Current Events
KEYWORDS: asia; currency; denninger; dollar; economy; tm; yen
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To: dangermouse

Rollin’ Rollin’ Rollin’

Keep movin’, movin’, movin’,
Though they’re disapprovin’,
Keep them doggies movin’ Rawhide!
Don’t try to understand ‘em,
Just rope and throw and grab ‘em,
Soon we’ll be living high and wide.
Boy my heart’s calculatin’
My true love will be waitin’, be waiting at the end of my ride.

Move ‘em on, head ‘em up,
Head ‘em up, move ‘em out,
Move ‘em on, head ‘em out Rawhide!
Set ‘em out, ride ‘em in
Ride ‘em in, let ‘em out,
Cut ‘em out, ride ‘em in Rawhide.

Full Lyrics

Rollin’, rollin’, rollin’
Rollin’, rollin’, rollin’
Rollin’, rollin’, rollin’
Rollin’, rollin’, rollin’
Rawhide!

Rollin’, rollin’, rollin’
Though the streams are swollen
Keep them dogies rollin’
Rawhide!
Rain and wind and weather
Hell-bent for leather
Wishin’ my gal was by my side.
All the things I’m missin’,
Good vittles, love, and kissin’,
Are waiting at the end of my ride

CHORUS
Move ‘em on, head ‘em up
Head ‘em up, move ‘em on
Move ‘em on, head ‘em up
Rawhide
Count ‘em out, ride ‘em in,
Ride ‘em in, count ‘em out,
Count ‘em out, ride ‘em in
Rawhide!

Keep movin’, movin’, movin’
Though they’re disapprovin’
Keep them dogies movin’
Rawhide!
Don’t try to understand ‘em
Just rope, throw, and brand ‘em
Soon we’ll be living high and wide.
My hearts calculatin’
My true love will be waitin’,
Be waitin’ at the end of my ride.

Rawhide!
Rawhide!


161 posted on 02/16/2009 9:17:49 PM PST by familyop (combat engineer (combat), National Guard, '89-'96, Duncan Hunter or no-vote, http://falconparty.com/)
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To: dangermouse
From The Collaborative International Dictionary of English v.0.48 :
 Hysteria \Hys*te"ri*a\, n. [NL.: cf. F. hyst['e]rie. See
Hysteric.] (Med.)
A nervous affection, occurring almost exclusively in women,
in which the emotional and reflex excitability is
exaggerated, and the will power correspondingly diminished,
so that the patient loses control over the emotions, becomes
the victim of imaginary sensations, and often falls into
paroxism or fits.
[1913 Webster]

Note: The chief symptoms are convulsive, tossing movements of
the limbs and head, uncontrollable crying and laughing,
and a choking sensation as if a ball were lodged in the
throat. The affection presents the most varied
symptoms, often simulating those of the gravest
diseases, but generally curable by mental treatment
alone. Hysteric



162 posted on 02/16/2009 9:19:21 PM PST by familyop (combat engineer (combat), National Guard, '89-'96, Duncan Hunter or no-vote, http://falconparty.com/)
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To: 1010RD

Well thank you sir. Glad to be here.

I’m figuring USD will show strength anyway. EU is in far worse shape, Japan never came out of their 90s troubles, and ChiComs will be having themselves social unrest. So, I’d say USD is the ONLY safe haven, socialism on the march notwithstanding.

Tho, my Aussie guys joke that all the currencies will go to parity as we’re all in the same, deep shit.


163 posted on 02/16/2009 9:19:53 PM PST by farlander (Sic Semper Tyrannis)
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To: Velveeta

LMAO....I feel the same way. I woke up my husband! Should we get our money out of the bank? Get our cd’s?


164 posted on 02/16/2009 9:23:17 PM PST by Giddyupgo
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To: farlander
“Tho, my Aussie guys joke that all the currencies will go to parity as we’re all in the same, deep shit.”

Your friends are more likely prophets than comedians.

165 posted on 02/16/2009 9:23:42 PM PST by montanajoe
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To: familyop

Thank you for that... erm... ‘succint’ observation. I’ve been trying to figure out an internet equivalent of a good slap or a cold water cannon, but mere rational thinking has only barely worked so far.


166 posted on 02/16/2009 9:25:03 PM PST by farlander (Sic Semper Tyrannis)
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To: farlander

I think the Aussies are too hopeful. The USD will remain a haven. Gold is too heavy for airline travel. ;-]


167 posted on 02/16/2009 9:25:31 PM PST by 1010RD (First Do No Harm)
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To: farlander
Thanks for the feedback. I'm a biologist by training. I can do statistics, but the terminology fails me.
168 posted on 02/16/2009 9:26:09 PM PST by aliquando (A Scout is T, L, H, F, C, K, O, C, T, B, C, and R.)
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To: jsh3180

If that report is accurate, we might well see Austria fail before Ireland.


169 posted on 02/16/2009 9:28:56 PM PST by Petronski (For the next few years, Gethsemane will not be marginal. We will know that garden. -- Cdl. Stafford)
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To: aliquando

Which items ? I’d be happy to fill you in.


170 posted on 02/16/2009 9:29:50 PM PST by farlander (Sic Semper Tyrannis)
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To: Giddyupgo

If the market melts down and the economy spirals into a depression, those CDs won’t be worth rescuing.

I wouldn’t do anything hasty but that’s just me.


171 posted on 02/16/2009 9:30:04 PM PST by indcons (An eye for an eye; a tooth for a tooth.)
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To: farlander
"Thank you for that... erm... ‘succint’ observation. I’ve been trying to figure out an internet equivalent of a good slap or a cold water cannon, but mere rational thinking has only barely worked so far."

LOL! Thanks! Yes, the message needs a bit of dumbing-down. Here's a metaphor...hopefully not an allegory for tomorrow. ;-)

Rawhide
http://www.youtube.com/watch?v=GP2mcVwQ2as


172 posted on 02/16/2009 9:30:13 PM PST by familyop (combat engineer (combat), National Guard, '89-'96, Duncan Hunter or no-vote, http://falconparty.com/)
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To: Petronski

Erm, yea, Austrians look pretty toasty. Iceland style.


173 posted on 02/16/2009 9:30:36 PM PST by farlander (Sic Semper Tyrannis)
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To: Giddyupgo

Nothing he can do about it. You may want to jump in with him and giddy up and go... if you know what I mean. :)


174 posted on 02/16/2009 9:30:48 PM PST by Orange1998
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To: All

http://www.youtube.com/watch?v=iQ-IPb8AOZE


175 posted on 02/16/2009 9:31:57 PM PST by djf
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To: Squantos
I am going to stockpile the important stuff, such as whiskey and chocolate.
176 posted on 02/16/2009 9:33:41 PM PST by razorback-bert (Will trade sex for ammo)
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To: PhiKapMom
ROFLOL! ATM I understand completely along with the ammo and rice!

So what we need is an ATM that dispenses gold bricks and 30.06. If they don't have something like that in Texas than I'm sure somebody will open one soon.
177 posted on 02/16/2009 9:35:01 PM PST by GonzoGOP (There are millions of paranoid people in the world and they are all out to get me.)
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To: Sundog

How “fireproof” are they ? How big ?

Don’t think I’ve noticed them there.


178 posted on 02/16/2009 9:35:26 PM PST by 1066AD
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To: celtic gal

Amazing last 30 days of gold. $820 to $955 tonight.


179 posted on 02/16/2009 9:35:37 PM PST by Sundog (Atlas Shrugged needs to be required reading . . . Which character are you?)
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To: Centurion2000

The best thing that could happen is for the bond market to cut OBama and Congress off at the knees. The bond market needs to say “NO MORE”. Taking on all of this debt will be harmful in the long run. And it will be on the backs of all the Children.


180 posted on 02/16/2009 9:36:09 PM PST by Revel
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