Charting The European Spread Massacre

Tyler Durden's picture

Europe is now closed, which means the ES no volume ramp into the close will likely be next, even as the RISK index trails and allows another 10 point divergence at EOD, for today's pair trade compression opportunity. We will demonstrate it when it appears. Of course, nothing has changed, and in fact things in Europe are getting exponentially worse, with contagion now squarely hitting Italy and Spain, both of which have seen their spreads and CDS blow out in both the past week and YTD. Below is a visual update of the massacre.

In just the past week...

And year to date.

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oogs66's picture

equities have ridiculously outperformed for almost 2 weeks, us stocks rallied more on greece than greece...this could get ugly

SheepDog-One's picture

Equities have 'full retard' performed...shows their extreme level of desperation.

TheTmfreak's picture

Other than gold/silver what the hell else is there to put one's money into to? They believe stocks apparently.


This is a trick question because only gold and silver make sense at this moment.

TruthInSunshine's picture

Spain's finance minister is such a rookie, wtf?

That's not how you spin it, rookie. Let me fix that for you:

Spanish finance minister says a plurality of Spanish banks will probably pass (fake) stress tests.
There. Much better. Don't look at the word in parentheses.
Wannabee's picture


Your'e good. Job offer on it's way for Communication Director, Spanish Finance Minister.

Transitory Disinflation's picture

That just took me right back to the Iraqi Information Minister quote "There are no tanks"

carbonmutant's picture

I believe it's a tactic to lower expectations...

firstdivision's picture

How is Icelands spread compared to the PIIGS?

RetiredSilverBug's picture

Europeans are slow to realize that this financial war will not end by itself. US rating agencies will continue to downgrade for no reason, US speculators will continue to short. US has no real dollar option but to attack the euro. Europe should kick out rating agencies and US/UK hedge funds to defend itself in this war.

luigi's picture

This one "junk" stands like a "pour le merite" on your chest: well said SilverBug :)

Anyway Merkel told it long ago: this is war. And among all the embarassing European PM (Prime Muppets) in charge she seems to be the only one to have some balls and to actually believe in what she says.

luigi's picture

Two medals? Domine, non sum dignus! :P

Ropingdown's picture

The ratings agencies have been as slow to downgrade euro banks and sovereigns as they were to downgrade US RMBS.  Germany was coerced into playing nice (mainly by France) in Euro creation to allay fears of a united Germany.  As the french PM once said, "we like Germany so much we are glad to have two of them."  Germany saw a silver lining and ran with it... the ease of lending too much to good exports customers.  Why not?  The chinese market for high end cars and machine tools provides an option now for Germany to retrench in southern european markets.  I miss the Deutchmark.  You?  Not because I dislike the Euro, but because I liked the DM.

RetiredSilverBug's picture

DM was nice, but Europe needs euro to fight financial divide-and-rule. Euro is a nice concept of international currency (besides gold). It just needs to work out some baby bugs. E.g. procedure for kicking out countries that can't maintain the deficit target. Looking forward you can see that we need a euro-like global currency if we are not going with a gold standard. Any currency of one country (e.g. US) will always fail in the end because people will always vote for tax breaks and tax refunds, but not salary reduction. Unlike Greece, US can not be forced into 3% budget deficit - it will never happen.

JeffB's picture

Why the need to kick any countries out, other than for blatant war mongering etc.?

It seems to me that you can have a sound financial system by having a sound currency and just let the chips fall where they may. If a country is too profligate, the market should be able to take care of that in due time, just as it would for a family or a business that lived beyond its means for too long.

Let the lenders only loan money to those likely to be able to repay. Let them keep the profits for those that do and take the haircut for those that don't. No need to kick out countries that get into financial difficulty any more than you would kick out citizens who can't pay their bills.

At least that's how it looks to me.

P.S. My preference for sound money would either be one that is by law backed by precious metals, or is in some other way objectively restrained such that no central bank can "print" more of it at their or their government's whim.

treemagnet's picture

Ten fingers and ten holes.  Uh oh, little help here?!....somebody?

qussl3's picture

Thats what your toes are for.

Excuse me while i relocate my operations from your dam.

jmac2013's picture

This is all looking too familiar.  Prediction, bailouts and austerity for the rest of the Piigs.

oogs66's picture

maybe, though they might be running out of ability to pretend they can fix anything anymore

jmac2013's picture

I don't think it's about fixing anything.  It's showing that they can use debt as a weapon in order to reorganize government in the first world the same as they've been doing for decades against 3rd world countries.

carbonmutant's picture

In a mark to myth economy ratings are irrelevant...

Manthong's picture

Mark to Mythic.. that has a nice ring to it.

lubyanka's picture

Did silver just get fat-fingered?

toady's picture

Looks like it...

One of these days it will break up instead of down and we will know its all over.

RetiredSilverBug's picture

Net. Just tactical shorting on the upper band of the range. Most longs have sold long ago (as per COT), so we are not likely to fall off the range. Just keep buying :) I'm buying since 2003 and we are not even close to the top.

janus's picture

God Bless You, Sir!

I come to full attention:


PRESENT ARMS:  drumroll...

shimmerin .999

ugmug's picture

What will make good wallpaper?

Stock, bonds or currency?


SheepDog-One's picture

All I know is after seeing this mornings various clownshows, Im buying more ammo this afternoon.

toady's picture


And I heard there is a new bulk food store across town. It may be a good time to get another pallet.

There is No Spoon's picture

looks like Italy and Spain still have a lot of catching up to do.

Dick Darlington's picture

Spanish hidden debt problem which the central gubbermint, msm and the banking cartel have shrugged of as "meaningless" is raising its ugly head. Again.

Oh regional Indian's picture

my SpyDee sense is telling me to sit in cash over this coming weekend.
I'm saying out of PM's and into cash for the buying opportunity of a lifetime to follow shortly (Punny!).

I think the hyperdeflationary shock will be short, swift and brutal.

Anyone else getting that feeling?

A 45 day shock of "Irons" followed by a swift pull back into the Valkyries?


camoes's picture

CIgno nero, putana!