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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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Mon, 07/11/2011 - 11:39 | 1444042 Fortunes Favor
Mon, 07/11/2011 - 11:56 | 1444125 oogs66
oogs66's picture

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

Mon, 07/11/2011 - 12:12 | 1444193 SheepDog-One
SheepDog-One's picture

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

Mon, 07/11/2011 - 12:48 | 1444297 TheTmfreak
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.

Mon, 07/11/2011 - 11:42 | 1444047 TruthInSunshine
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.
Mon, 07/11/2011 - 11:47 | 1444082 Wannabee
Wannabee's picture

@TIS

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

Mon, 07/11/2011 - 14:21 | 1444725 Transitory Disi...
Transitory Disinflation's picture

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

Mon, 07/11/2011 - 12:00 | 1444113 carbonmutant
carbonmutant's picture

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

Mon, 07/11/2011 - 11:41 | 1444049 firstdivision
firstdivision's picture

How is Icelands spread compared to the PIIGS?

Mon, 07/11/2011 - 11:44 | 1444068 RetiredSilverBug
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.

Mon, 07/11/2011 - 12:01 | 1444156 luigi
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.

Wed, 07/13/2011 - 05:58 | 1450871 luigi
luigi's picture

Two medals? Domine, non sum dignus! :P

Mon, 07/11/2011 - 12:16 | 1444209 Ropingdown
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.

Mon, 07/11/2011 - 14:08 | 1444262 RetiredSilverBug
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.

Mon, 07/11/2011 - 21:43 | 1446229 JeffB
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.

Mon, 07/11/2011 - 11:45 | 1444075 treemagnet
treemagnet's picture

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

Mon, 07/11/2011 - 11:51 | 1444099 qussl3
qussl3's picture

Thats what your toes are for.

Excuse me while i relocate my operations from your dam.

Mon, 07/11/2011 - 11:48 | 1444086 jmac2013
jmac2013's picture

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

Mon, 07/11/2011 - 11:58 | 1444135 oogs66
oogs66's picture

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

Mon, 07/11/2011 - 12:05 | 1444168 jmac2013
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.

Mon, 07/11/2011 - 11:57 | 1444127 carbonmutant
carbonmutant's picture

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

Mon, 07/11/2011 - 12:03 | 1444162 Manthong
Manthong's picture

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

Mon, 07/11/2011 - 11:58 | 1444132 lubyanka
lubyanka's picture

Did silver just get fat-fingered?

Mon, 07/11/2011 - 12:09 | 1444184 toady
toady's picture

Looks like it...

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

Mon, 07/11/2011 - 12:14 | 1444200 RetiredSilverBug
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.

Mon, 07/11/2011 - 18:22 | 1445644 janus
janus's picture

God Bless You, Sir!

I come to full attention:

SALUTE!

PRESENT ARMS:  drumroll...

shimmerin .999

Mon, 07/11/2011 - 12:10 | 1444187 ugmug
ugmug's picture

What will make good wallpaper?

Stock, bonds or currency?

 

Mon, 07/11/2011 - 12:33 | 1444251 coppertop
coppertop's picture

your posts

Mon, 07/11/2011 - 12:35 | 1444258 SheepDog-One
SheepDog-One's picture

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

Mon, 07/11/2011 - 15:37 | 1445029 toady
toady's picture

+1

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

Mon, 07/11/2011 - 13:06 | 1444378 There is No Spoon
There is No Spoon's picture

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

Mon, 07/11/2011 - 13:25 | 1444460 Dick Darlington
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.

http://www.bloomberg.com/news/2011-07-11/spain-s-castilla-has-extremely-...

Mon, 07/11/2011 - 13:28 | 1444489 Oh regional Indian
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?

ORI

http://aadivaahan.wordpress.com/2011/07/08/july-15th-aug-15th-month-long...

Mon, 07/11/2011 - 14:21 | 1444728 camoes
camoes's picture

CIgno nero, putana!

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