The Weekend Wrap-up 8.08.11

Its been a crazy, crazy week monkeys. Just in case you live under a rock though, here's some stuff you need to know.

Americas:

• We finally saw the bottom fall off a topless market last Thursday as jittered investors sent US indices down 5% in a single day – the worst session in three years. The Dow, S&P, and the NASDAQ all ended the week down around 10%.

• On top of that, the ruhtards at Standard and Poor’s decided to downgrade the US to AA+ and added further insult by adopting a negative outlook on its economy. Gutsy move by the gang who cant do simple math. Question now though is how much of this has been priced in? There’s no stopping the large funds selling tomorrow and while I personally feel that the market has a long way to go before it hits the bottom, I highly doubt that it’s the S&P that will take us there.

• Unemployment and payrolls on the other hand both surprised to the upside.

Europe:

• Things were a bit better in Europe with the FTSE down 2%, the same with the DAX, while the CAC and the IBEX both ended the week down 1%. The Swiss however fared worse, their index was down almost 13% for the week.

• Speaking of the Swiss, I feel that we’re about to witness one of those rare showdowns between Central Banks and speculators. As you all know, the SNB has adopted a quasi QE/rate slashing protocol in an effort to devalue the Swissie. Well, round 1 defiantly went to the speculators and I’m fairly confident that they will continue to test the SNB until negative yields will finally be achieved. This is a tremendous opportunity to make money people, look into it.

• Meanwhile, in the core EU, all hell has broken loose as the Italians raid ratings agency offices and the ECB has all but capitulated, admitting that Italy and Spain have become “too big to bail”. I’ll give more detail on the latter sometime this week.

Asia:

• The bloodbath on Wall Street continued onto the Asian markets with the Nikkei down 3.5%, the ASX down 4%, same with the Kospi, while Taiwan, Shanghai, Singapore, and Hong Kong were down 5%, 2%, 4%, and 5% respectively.

• One should note that most Asian CB’s are now getting ready to artificially support their markets. Taiwan is currently at the forefront of this after seeing billions wiped out off the Taiex, sending it to its lowest since last year. Market rigging is now everywhere and in the smaller exchanges the Central Bank is still King. Should be interesting if a couple huge HF’s decide to take them down but with the selloff in EM almost over, I see little upside for them to do so.

• While that may be the case in EM, Japan and the Yen has now become a battleground between Hedge Funds and the BoJ. Just like in the case of the Swissie however, round 1 also went to the speculators as the Y4.2 trillion intervention by the BoJ was quickly shrugged off and rendered useless by – ironically – Japanese importers. Unlike the SNB, the BoJ is known to be less effective in their currency interventions and with their rates currently near zero, they have fewer weapons to defend themselves against the rising tide of hedge funds betting against them. This should be a cool few weeks.

• The RBA on the other hand was more effective in driving away Aussie bulls. Keeping rates steady at 4.25% sent the longs packing and the shorts coming, sending the AUD further away from its highs of last month.

And here’s my clip of the week:

The Top Gear review I saw on Barry Ritholtz's blog was taken down so here's one from EVO instead. I remember posting a vid of this car a few months back and some of you liked it so here you go.

Hope you had a great weekend monkeys.