Something is Rotten in the State of Last Hour Trading

We have light volumes across Europe again today, 80% or so…as was the case in the US yesterday too…although we did get an uptick in volumes for the mandatory ramping of the index on anything that looks like a bad down day. It is odd the way this continues to happen. There are plenty of conspiracy theories out there, who knows what the reality is but it certainly is strange for a market to move like this, so violently on no news…see the Emini and SPY charts

It is amusing to see the Obama administration come out straight faced, without a hint of irony and urge European Banks to undergo more rigorous stress tests. “Do as I say, not as I do” springs to mind. Banks have stalled in the last couple of weeks and with risk appetite waning, further questions being asked of the European banks and issues such as Latvian devaluation hanging over them, I would think the risk is to the downside.

The performance of the Baltic Dry has been a source of optimism for the Gr**n Sh***ers and why not, it’s a leading indicator after all and has enjoyed 400+% rise from the Q408 lows and a 140% odd rise since April. Well firstly, the BDI is based on USD so the dollar fall has helped it but aside from that caveat; I’ve mentioned before talk of China bulk purchasing and stockpiling raw materials and I came across an article today in Maritime Global News. It casts dispersions on the sustainability of the BDI rally, noting Chinese iron ore imports have risen 27% annualised YoY while actual steel output is largely flat YoY.

Away from this we did see some more good news on UK house prices, with the RICS survey coming in better than expected. I saw some guy on CNBC yesterday talking about the UK housing market and saying that XYZ bank was starting to offer 90% mortgages again “which is good.” Erm, isn’t that the exactly the kind of thing that got us into this mess in the first place?