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Containment Fails: European CDS Explode As Market Looks To Future Bail Outs, Bank Runs
Now that Greece is thoroughly irrelevant, the market just told the ECB, the IMF, and the EMU to prepare another $1 trillion in bailout packages. The reason: the Greek bailout just made it abundantly clear the bond vigilantes have free reign to call the bureaucrats' bluff whenever they see fit. The result: CDS of all non Greek PIIGS are now blowing out, and represent the top 4 names of all biggest CDS wideners for the day, each pushing a 10%+ change from yesterday. This movement wider will not stop until the IMF resolves to backstop all the PIIS ex. G. At this point nothing that happens in Greece is important, although the thing that will most likely happen is that the Greek government will fall imminently, killing the austerity package and destroying whatever credibility the EMU and the EU have left, but not before the IMF and the EU soak up another 110 billion euro in their slush funds. However, even with the bailout the Greek stock market is tumbling: the Athens Stock Exchange is now down 3.4% to just under 1,800. As we expected, the euro is about to breach 1.31 support. At that point, not even the US algos and the Liberty 33 traders will be able to prevent the contagion. And adding insult to injury is the latest rumor of an upcoming downgrade or very cautious language of Germany by the suddenly hyperactive rating agencies. When that occurs, you can kiss Europe goodbye.
Biggest CDS intraday movers (from CMA):
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Or, quite possibly, US and UK banks can kiss their money goodbye. Selective default (on a grand EU scale), here we come!
TAXES my friends, taxes. The big kiss-off, as it were, will ONLY occur if and when the U.S. taxpayer decides that he/she no longer NEEDS dollars in order to service his tax obligations. When that happens, all of the trillions and trillions of digital dollars, created by the FED and Treasury and pumped electronically into all of the reserve accounts on Constitution Avenue---all of those dollars in a heartbeat become worthless. And then it's bankruptcy for the world. GOD himself couldn't bail us out at that point. HOWEVER...until that happens, there is money to be made, Mr. Beale...and you will atone!!!!
I don't think the US Gov't would accept tax payment other than in US currency... unless we went to the Amero or something like that.
I see. And what, exactly, will 300 million Americans suddenly decide to pay taxes with? Tulip bulbs?
These points seem to me to be beyond debate.
Yeah, I don't understand this thread at all. If you work in a standard job, your taxes - in dollars - are automatically deducted from your paycheck. Are you implying that we all go to the underground, cash-only economy? The barter system? What exactly? I don't think the Feds will take pears from my pear trees as tax payments.
Your headlines are like all my friends' trading: each day they swing for the fences a little harder and lose that much more money. I enjoy the blog more than any other but it's a little over the top.
Shhhhhhhhh. Look at it for the humor. The circle jerk of negativity on here is hilarious. These guys have been short since S&P 666.
Nah, just staying out of the casino. Now buy some APPL or STFU.
i believe every single word our government says. I particularly have faith in Ben Bernanke.
That said, I am very, very, very glad I started buying physical gold the day he was appointed by Bush.
But I have faith in our government.
Oh yes. Politicians are such good money managers.
Yes they are.
Some members of Congress made risky bets with their own money that U.S. stocks or bonds would fall during the financial crisis, a Wall Street Journal analysis of congressional disclosures shows.
http://online.wsj.com/article/SB1000142405274870387190457521649149513564...
Our Public Servants
Begin gathering the wood for the bonfire friends. They used to burn heretics and blasphemers.
"i believe every single word our government says. I particularly have faith in Ben Bernanke."
I particularly have faith in everything Timmay Geithner says... Especially when he has that constipated look on his face...
Internet TG: "Now buy some APPL or STFU."
Classic...
Livermore tells the story of a coffee short trade he held for a year even while coffee went up because he knew he was right and he stuck to his guns. In the end, he did get screwed on that trade because Congress changed the rules on him near the end of that year. But, when you know you're right, there's no reason to shift your position just because the opinions of others.
That said, I trade the long and the short side on the SPY. About 2/3 of my gains are from the long side, so there's lots of opportunity on the short side as well AND I do think that one of these days, a short signal will trigger and it just won't stop being a valid signal for a LONG time.
Of course, anyone short since 666 MIGHT end up disappointed because I don't know for sure that we'll be going that low again.
Who do you imagine is losing money? In the first place, it appears you are not distinguishing between TD's articles and the commentary. TD's articles are absolutely factual; nothing he has ever said has been inaccurate, as far as I can tell. And he does not say what his investments are. The commentary on the other hand is negative, I won't deny, but the recurring theme is to buy gold. Correct me if I'm wrong, but hasn't gold been quite a decent money-maker recently? So Edna, you don't know who or if anyone is losing money; I know, however, that you have lost credibility.
+1187
You can tell by the posts who's holding worthless paper and who's holding physical gold.
Yeah bulltards, DOW to $36K and $100 for a loaf of bread, let's see where that gets you.
+1191.50
dollar up simultaneously
Give me euro parity baby. Daddy needs a Bimmer for less than a toyota.
I'm waiting for pound parity. Daddy needs to see some Brits eat humble pie.
Humble Pie?
The Fab Fab Song...
Newcastle Brown, I'm tellin' you,
It can sure smack you down,
Take a greasy whore and a rollin' dance floor
It's got your head spinnin' round...
Chicago green $$$$$$,
Talkin' about Black Lebanese,
A dirty room and a silver coke spoon,
Give me my release...
Black napalese,
It got you weak in your knees,
Sneeze some dust that you got bust on
You know it's hard to believe
Lloyd B. extols,
Shut your damn pie hole
Don't talk about Abacus, you mutt
Keep your dumb mouth shut or...
You know you're jailhouse-bound...
Fab-Fab in the Hole
Fab-Fab in the Hole
That's what they give you now
Fab-Fab in the HHHH-HOLE
Hmmm... On the other hand, when the bond vigilantes really wake up, they will realize the UK and the USA are just as indebted as the "Club Med" countries.
When THAT happens, the human-produced manure is really going to hit the rotating oscillator.
And no-one will have any money to buy a beemer. Not that they would still be produced anyway.
Jesus you guys, do remember what happened to the "bond vigilantes" when they went after GM and Chrysler? They all ate shit. Near 100% losses on all of their holdings. That shit will not fly in the U.S.. Quants will lose to leviathan every time as long as we have the federal reserve. If the political class decides it is neccessary, the financial class dissappears overnight. Good luck to you all who shorted the dollar back at 74 when america was "circleing the drain"
Happy to lose this bet. This is government debt, not private. Eating shit would require debt repudiation.
Wow, looks like decoupling is working as well in 2010 as is did in 2008.
Especially when the euro currently trading at 1.3096 (with a 1.3088 low).
Rumor goes that Spain has asked fellow EMU states for a 280 bilion (EUR) emergency loan....
Wimpy: "For which I will gladly pay you... Tuuuesday."
Containment Fails?
There never was any containment! Let's be clear:
European taxpayers just spent an enormous amount of money to protect European taxpayers from having to spend an enormous amount of money.
The bailout *IS* contagion. By definition.
The only difference between a bailout and a collapse is that if you do it proactively the banks get saved.
The notion that the damage "would be worse" in the event of an uncontrolled collapse is highly debatable.
+ 1776
+ 1789
Is there a 3X guillotine ETF?
+1453
That is great!
In fact if market really does it jobs the moment bailout was enacted,there should have been a euro downgrade and downgrade of the countries doling out the handouts. This should do the job of stopping the bailout BS at its tracks.
If Euro is skiding and Germany is being downgraded then the other dolers should not be far behind.
Max out all your credit cards while you can!
DOW will close green today.
The other post showing that CMBS hit a record default rate and that the default rate is still accelerating will probably send the REITs to the moon and SRS to another all time low.
SPG is at an all time, split adjusted high.
I notice Citibank is slightly up pre-market
What a joke the US markets have become. At least in Europe their markets can still transmit some price information instead of being completely set by the central bank
When will the global monetary RESET button get pressed?
Feels imminent.
Wait, the prop trade desks haven't cleared their positions. They still see room for another round or two of shorting anybody.
IMF cannot cover everyone's all-in stack. Prepare for carnage.
Plus, UK election on Thursday and the O sex scandal to boot. Heh.
What is the "O sex scandal"????? Obama, Oprah, Obama with Oprah????
http://www.globemagazine.com/story/493
Rules to live by:
Everything happens at the margin.
By the time the MSM spot a trend, it's over.
Its nothing a little printing press can't fix...They need another g-20 meeting - everybody increase your money supply another 10% and loan it to your banks at 0% interest 1st principle payment due 2110....
Do you mean this time they are going to require the banks to pay it back? Astonishing!
The dominoes have been Greeced. Even the alogos hands are getting slippery. The sensored prosthetic finger misguided by sociopathic minds twitches as it projects the risng yield to the last dominoe- the municipalities of the US.
First time i read the headline i thought it was "Continent Fails". Funny how the mind works sometimes...
I give it a week until TD writes that.
Predictable, the beginning of the end of the EMU. Would love to see Greece and the rest of the "PIIGS" default. Sweet justice to fuck those bond vigilantes.
Typical greek attitude. First take out a lot of loans and then just default, in other words, steal the money. It seems that greeks are cheater by nature. There´s nothing to do about it, it´s in the genes. No wonder Greece defaulted 6 times in the last two centuries. I mean, when all this ends, Greece will just go back to the Middle East where it belongs to.
Typical German attitude. Don't worry, Germans are going to feel real pain sooner than they think. There is no escaping it, and you can thank Merkel for this debacle. On Greece, you're an ignorant fool.
Leo, you are Albanian and not Greek. Check your family tree.
Another typical greek reaction. If we go down to hell, we´ll pull down the whole continent with us, so that no one prospers. Zero responsibility or honesty. As for german pain, I dont really care about it, as I´m not german. As for Greece, the video you posted in previuos thread shows nice and well, what cesspool Greece really is. Turkey seems better in comparison.
http://www.youtube.com/watch?v=rkqxQ3qZg90
So let Turkey join the EU so they can fucked by the banksters. Zero responsibility? What are you American? Figures.
Leo, you have never posted one statement that Greeks bear any responsibility at all for their situation. That's laughable.
Sure, the inability of Greece to produce anything competitive is the banksters fault. I can only hope your dream comes true and Greece will default and stop leeching the eurozone. Then they can go where they belong to - 19.century Middle East.
Of course Greeks bear responsibility too, but let's not kid ourselves here, the banksters are fucking ruining the global economy, and regular workers will pay the ultimate price while the elites park their money offshore. Wake the fuck up and stop being slaves to neoconservative propaganda.
Yes, it´s this blame-game culture that´s really killing Greece. There´s a saying that each country has only as good politicians as it deserves. Greeks truly deserve their corrupt, incompetent politicians like no one else.
We will all join the club. When that realization sinks in we should not have insulted friends. Greece were just the first. Lets see Italy! I'll raise you Canada and Australia when China tanks. We are all going to need helmets and humility.
Cannot be typical Greek attitude, otherwise they would be on all our bank, corporate, cultural boards and would control the goobermint.
All looks good to me, the Greek banks have been bailed and the government has been bailed to pay the other European banks. All bankers must see this as a great outcome, what more could anyboby want? Mind you the way the Greek strikes are building up steam wouldn't be surprised at a government collapse, new government goes back to spending business as usual and dumps all the austerity. ECB looks like a bunch of wankers, and so it goes on. Definitely something to be said to be at the front of the bailout queue.
Well, the bailout hasnt been approved yet. And I hope it won´t be. Anyway, it´s not only Germans who oppose it. Slovak prime minister said that he, personally, doesnt trust the Greeks.
http://www.bloomberg.com/apps/news?pid=20601095&sid=aVYPHdN3.ODc
As a 1/2 slovak, I have not trusted the greeks since Thucydides and Heroditus.
Currently, SP500 futures indicate the March 2009 bear market rally may be ending.
We should get confirmation this week.
MARKET UPDATES:
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I think your right. One caveat short term. The fed knows that they don't have to worry about yields rising in treasuries while Europe crashes because of the flight to "safety". Thus, it is possible they full court press the stocks now only to let it crash a liitle later when they need it to drag people back into bonds. Butt who nose, eye don't.
I think your right. One caveat short term. The fed knows that they don't have to worry about yields rising in treasuries while Europe crashes because of the flight to "safety". Thus, it is possible they full court press the stocks now only to let it crash a liitle later when they need it to drag people back into bonds. Butt who nose, eye don't.
Bernanke losing control with gold approaching $1200 and oil hanging tough at $85.
Well done, Ben.
Check out Bloomberg top stories this morning, especially ones on Greece:
•Stocks, Futures Slide as Chinese Manufacturing Slows; Euro Drops on Greece •UBS Posts Biggest Quarterly Profit in Almost Three Years, Beats Estimates •Greek Fund to Provide as Much as $19.8 Billion for Banks, EU Document Says • Conoco, Anadarko Drill On, Unfazed by BP's Struggle to Contain Oil Slick •Lufthansa's Net Loss Widens to $390 Million, Missing Analysts' Estimates •Greek Deal May Collapse, `Hard to See' How Euro Can Survive, Goodhart Says •National Bank Tops RBC for Provincial Bond Sales This Year: Canada Credit •American Citizen From Pakistan Faces Charges Over Times Square Bomb Plot •Greek Workers Occupy Acropolis, Shut Hospitals as Budget Protests EscalateYou need to look at the bright side of this.
Oh, wait. There is no bright side. Hmmm...
agreed, the situation in most european countries is dire. however, compared to the us, we still do pretty well, even greece, spain and portugal. now why is that?
well in contrast to the us, we citizens here in europe still have some money and assets (not just paper but real estate, stocks, etc) on the sidelines!
u on the other side, have nothing. ur government is broke, most of ur companies are broke and of course most of our citizens are more then just broke. and this is crystal clear although ur faked data says different :)
cheers
Greece will Default ...Germany knows it... 39 states in the USA
are broke .... heading to bankrupcy ... more pain ahead...
Stocks are not safe , Bonds are not safe...27
The Bond market is asserting control..the loonie politicans need to be reigned in a bit.
You want to spend be ready to pay. Ol Virgil said bonds would sell off on the bailout news.
The Pols "want to get high on their own supply " lol they are stoned.
Too much Debt... Too much Fiat Funny Money....
This house of cards is about to fall more...
Buy Silver . play it safe... call Monex ..
Don't wait for a car bomb in NY City to go off..
It is clear to me that Europeans are running to the safety of Gold , they do not perceive the dollar as a safe harbour.
I am pissed off that I still hold 20% Euros , now probably closer to 15% now.
I am still hoping for a major drop in silver as investors perceive the deflationary implications of these tumultuous days.
God give me one more chance of 10 Euro silver.
Liquidity/Speculation works until the debt waves take over. Surf time. The almost unanimous view that Ben and now the ECB could solve every issue was a warning signal. They will Save Us!.. wrong.
Are you ready?
Are you rrrrrrrready?!?!
Let's get ready to rumble!!!
www.youtube.com/watch?v=WvufFwdqMzg
At this rate, I would take a bet that the UK
gets downgraded this coming Friday to celebrate
the elections. Imho, if the IMF cut its 2010 growth's
s outlook for Germany because of the exposure
to Greece, there still is a whole list of countries
to go down before Germany is downgraded.
Mind you, not only have the Germans been
yelling for an independent rating agency since
the ratings of the American agencies cost their
banks and government a truckload of money,
the project is now under examination in Brussels
with Michel Barnier, the European commissioner
Timmy took to write to about the activities
of American hedge funds in Europe a few
weeks ago
Irony so think you can taste it. It seems that independence is not what the EU will be demanding from its new rating agency, alas.
As the water begins to swirl in a whirlpool like fashion......
The impending USD rally I've warned about since 2009 has arrived. It may last for some time too ...
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