Europe Imploding (Again): Greek Two-Year Note Yield Surges 213 Bps to Record 35.19%, More Italy Stock Suspensions

Tyler Durden's picture

It's getting very scary out there. First there has been an unsubstantiated rumor that Spanish PM has resigned based on an El Pais editorial, and then we have the fact that Greek 2 year bonds have just collapsed by another 2% to an all time record 35.19%. The cherry on top are reports that Intesa Sanpaolo and some other volatile bank shares are suspended after continuing their last week plunge. One day soon the entire European stock market will just shut down and not reopen (which will naturally simply be an excuse for the US HFT lobby, which now feels unfairly attacked for being a malicious parasite, to levitate the Russell 2000 to unseen levels).

As usual, this is worth a thousand words:

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Cognitive Dissonance's picture

How many times is Europe gonna implode? You'd think after two world wars they'd have their technique down pat.

Send in the clowns.

trav7777's picture

Too bad we don't have Yahooligans around to crow about their fat 35% coupon LOL.  Those were the days, when shit like WM was imploding and the bagholders were bragging on the huge dividend ROTFL

Internet Tough Guy's picture

Momofade likes to brag about his blue chip divvies.

trav7777's picture

if you're in equities, you really ought to be defensive like that.  Coca cola will do well in a contraction climate as will MO and plenty of others.  Companies can't fake dividends.  Nothing wrong with low beta either, and non-growth stocks.

GoldBricker's picture

Hi CD,

I've lived in/around Brussels since 1997. They do have their technique down pat; this is it.

The Europeans believe that an institutional arrangement will save them. Just as they believed that the League of Nations and punishing Germany after WW1 would solve things (JM Keynes' warnings notwithstanding), so they believe now that the mere existence of the EU and eurozone will prevent new conflict.

In fact, these institutions seem to be doing all they can to hasten their own demise. After all, it stands to reason that if they know how to solve the problem now, they would have known how to prevent it in the first place.

The bad part is that the Europeans I talk to almost all believe the big-government myth. They say "but there hasn't been a war since the EU was founded".

Personally, I suspect that the 100K US troops in Germany is much more the reason for the long peace, and may be Europe's only hope to avoid violent implosion.

williambanzai7's picture

The key is keep the Germans employed. You don't want them unemployed and drunk. All the others will cannibalize themselves.

Cognitive Dissonance's picture


Your comment and Gold taking off are oddly connected. Did you buy a gold nugget in HK just now?

Mr Lennon Hendrix's picture

Gold was jealous that silver and platinum were having all the fun today.

CompassionateFascist's picture

The Key is to liquidate France. Period.

IQ 145's picture

 Probably not politically correct, (weak joke), but I wish I could un-junk you. Your post makes perfect sense to me.

THE DORK OF CORK's picture

Who do you think payed for those troops Goldbricker ?

GoldBricker's picture

Actually Dork, I don't know. I suppose the Germans. With a reserve currency, it's an open question who pays America's bills.

Cognitive Dissonance's picture

I'm smart enough to know that when I don't know something I should refrain from publicly discussing the subject that I don't know about. It's still OK to make an ass of myself in front of my wife and adult kids however. At least they understand and make allowances.

So I watch what's happening in Europe with puzzled looks and genuine befuddlement that the citizens of each country would allow themselves to walk so far out on the ship's gang plank. Then I look around me here in America and I instantly understand why. 

Crisismode's picture

In talking with the general public, friends, relatives, etc., it still is absolutely stunning to me on a daily basis how utterly and completely clueless the American people are about what is going on around them. The ship is sinking, but the band plays on, the guests continue dancing, and although there are plenty of lifeboats, only a few are being launched because everybody else thinks we've just "hit a bad patch" and before long things will be right back to "normal."


Simply amazing.

El Oregonian's picture

Our President and CNBC call it a "Soft" Patch...

Cognitive Dissonance's picture

More like flaccid penis. Or castrated.

NumNutt's picture

I have noticed the same thing, except I don't think they are clueless, more like not willing to except reality. Kind of like being at a party and hearing rumors that the beer keg has gone dry. No one wants to admit that the party is over, but deep down everyone understands the situation.

old naughty's picture

and look also in Asia (Japan 'excluded'), without the tinted lens. Would I not befuddled (or fuddle-duddled in P.E.Trudeau's context), although not instantly understood by most, yet.

Oh, I am such a grasshopper.

Thansk for sharing, CogDis.


old naughty's picture

ignore the grasshopper...Clue-less or not, flaccid penis, that WAS me.

AnAnonymous's picture

punishing Germany after WW1 would solve things (JM Keynes' warnings notwithstanding),


Nice story again but only valuable if it stands on facts. The fact is that on paper, the plan was supposed to be punishing. In reality, it was quickly eased up, later abandoned with many work arounds allowing countries like the US to fund largely the German military and eugenistic policies.

Propagandists have grown so imbued with themselves they want to believe themselves able to cover up for anything.

Would have been quite an interesting case if a country crushed by debt and various other constraints had been able to invest heavily in a military.

Alas, the reality is otherwise: the plan to crush Germany under debt was quickly eased and abandoned, to draw the classical scheme.

Very promising story though in these times: consider, it would mean that by crushing people under debt (with effective repayment) they are more and more able to consume. The solution in the solutions.

CompassionateFascist's picture

Liar. The Germans were able to escape reparations only by killing their own currency. Quite punishing, actually. Esp. in view of the fact that the Encirclement Powers - France, Britain, Russia, backstopped by Brother Woodrow - forced the World War, not Germany. As usual - as with Round II - the defeated got the blame.

AnAnonymous's picture

Huh no. The plan was quickly eased up. By  the 1920s, it was memories.

Not only that, but Germany benefited from the US pressing former allies like UK and France to repay their loans taken during WW1, giving liquidities to the US to be injected in the german economy.


No miracle here, Germany followed the normal pattern: building up a military while not being deprived of resources.

malek's picture

Pick your facts, and make up for the holes, as it suits you.

The Morgenthau plan was also first imposed in 1945, but eased up within two years into meaninglessness, mostly out of fear of communism spreading.  So?

AnAnonymous's picture

What holes?

WW2 was not caused by the reparations. Period. No hole.

AnAnonymous's picture

What holes?

WW2 was not caused by the reparations. Period. No hole.

Marx_it_2_market.'s picture

You are 100% ignorant of history and its lessons. Yes, the terms of Versailles were intended to crush Germany. War reparations were NOT, as you wrote, "quickly easened [sic] and abandoned."  In fact, British and French troops reoccupied the Ruhr 1923-25 for non-payment, and the Rhineland stayed occupied until June, 1930 or later. Your second factual error is "countries like the US to fund largely the German military and eugenistic [sic] policies." The US was the ONLY country to fund German debt in the 1920's.  More importantly, that aid stopped when the Nazis came into power. Ford and General Motors kept the factories they got in the 1920’s and profited by building trucks and bombers for Nazi Germany, but they did not, as far as I've ever read, do FDI in Germany after 1932. Your most stupid item is to ignore one of the big history lessons of the 20th Century: that trying to destroy the German economy was a mistake because it led inevitably to the Nazi takeover.  Not knowing this makes you a fool who should go troll elsewhere.

Readers of Zero Hedge are more interested in another  thing you don’t know. Nazi Germany rebuild and re-armed using a FIAT CURRENCY that did not depend on outside finance.

AnAnonymous's picture

In fact, British and French troops reoccupied the Ruhr 1923-25 for non-payment,


Funny how propagandists these days shoot themselves bullets in the foot.

So the debt was not repaid? When somebody does not repay one's debt, one does not abandon the plan to repay the debt?

Sure, sure. Cheap propaganda.

PY-129-20's picture

You're right about the 100k troops in Germany - they helped to prevent a war against Soviet Russia. But if you think there might be another war coming from Germany you are dead wrong.

I am grateful about the support Americans showed West Germany. And so are many people I know in this part of our country. East Germans might have a different view and I respect that view. Sure, you will say that we were part of the American Imperialism and bla - yeah, so what? What would've been the other choice? To be an ally of Soviet Russia at the time? Nope, it served us well and it was in our interest - as well as it was in the interest of the US.

But the cold war ended 20 years ago - there is no Soviet Russia anymore, just the oligarch Russia. And we've improved our relationship to Russia (thanks to our East German brethren) - I am glad about that. I was fascinated by the warm welcome I got when I met Russian people - ordinary people, not on trade fair or any other scripted event. Now keep in mind the horrible, horrible crimes some of our soldiers commited there, about the hatred from the NAZI regime towards the Russian people (Untermensch, Lebensraum im Osten). I am glad that things changed - just let us do business - I do not want to interfere in Russian internal affairs - they need to find their own way.

About the 100k troops here in my country:

Most of the people are glad they are here. But more important than the dreams of some girlies to meet an American GI is the fact that most cities depend on the money that is created through the military bases. But is it necessary for the US to have so many bases in Germany or Italy or Japan? No, it's definitely not. Sure, I am not speaking about Ramstein Airbase. But what about all these other bases? You will not hear me complaining about the fact that there are still American soldiers here - I personally know nobody that would complain about this - there might be a small percentage (5 %) that might not be happy about this. But do I think it is healthy for the United States from a fiscal point? No, definitely not. If I would be an American citizen I wouldn't like it.

The image of the US has changed over the past 20 years. Some horrible mistakes were made by some people and some strategic mistakes.

About that big government - you're probably right about that. But I don't like the current EU - still I like the European idea, I like to travel to France without being checked on the border anymore, to travel around Europe without being harassed.

You do not need to fear another war coming from Germany. I guess you don't understand our cultural experience - it was the ultimate defeat (and we deserved (most of) it) - our cities in ruins, our nation divided, families destroyed, manufacturing halted, the economy destroyed, our soldiers kept as POW for over ten years, being hated everywhere around the world for the crimes we had commited in the name of the fascist regime - that's how it felt. We were finished. It was our Stunde Null (

No, we don't want to start another war or to be dragged into another war. We think other nations should handle their internal problems by themselve and not with our help.

AnAnonymous's picture

 I guess you don't understand our cultural experience


Making money through war for Germans is not only cultural, it is part of the genetics. So is segregationist leaning.

The English are Germans genetically speaking, part of the French are, which makes that a large chunk of the US are also genetically german. And those people will always try to make money through wars because it is part of their genetics. It is not only a cultural problem.

Pegasus Muse's picture

Most the bases that Americans armed forces took over were German Kasernes.  We just fell in on them after the war.

After the end of the Cold War and with German Reunification, Clinton cashed in on the so-called Peace Dividend by reducing the size of the force in Europe by over half.  That downsizing continues.  Check out the list for the number of facilities Americans have turned back over to the Germans.  

You are right about the economic impact on some small communities.  It was mighty tough on them when we left.  It was tough on the American soldiers too.  Many American Soldiers will tell you that Germany was the best place in the world to be stationed --- better than any post in the USA, that's for sure (imho). Warm people, great food, cold beer and a sense of history, culture, and a desire to preserve it absent in the USA.  

PY-129-20's picture

You're right and I stand corrected.

Yes, it was a mighty tough. Some of the cities never recovered. They are still in decline. I cannot say a single negative thing about the American soldiers here. As I said many are still glad that they are here. Not just economically. In my region they are not seen as a foreign force, they are seen as an ally and good friend.

Always felt sorry for the young soldiers that had to go to Iraq and other hostile places. They weren't clueless about their missions. Many were well-informed. I've also seen how Germans and Americans work together in hospitals to save the lifes of American soldiers or Americans helping out Germans.

anyways's picture

instead of implode, one could say: The Incredible Shrinking Europe.

Btw over 200 bps in 2-year-notes Is a price imploding.


Cognitive Dissonance's picture

I wasn't arguing. Just trying to be a smart ass and miserably (index) failing to boot.

Ying-Yang's picture

Implosions like orgasms are better in multiples...

Cognitive Dissonance's picture

What's this? Multiple orgasms?

That's just crazy talk.

old naughty's picture

seemed to me like perpetual orgasms for some... Ying, Yang, or both.

IQ 145's picture

  35%, eh? Well, well. things are moving right along, here.

oogs66's picture

Greece will default by end of summer, or the banks will write-off about 25% of their exposure, basically the same thing, just the spin is different.  The 25% is not random now that we have seen what they stressed Greek debt at in the bank books.

slaughterer's picture

I would say August is the month of the Greece default.  There are still some hopes being pinned to this week's developments.  But after this week's discussions break down, there will be a Greece default event horizon forming. 

qussl3's picture

PM buying opp coming soon then, if not gold then at least silver.

I hope lol.

CH1's picture

I think the only substantial buying op is ending now.

fuu's picture

Uhh you sort of missed the window already. Although at $40.57/oz I suppose we are still 18% off the most recent high.

qussl3's picture

Well Im not adding to the shiny here.

Its always the end of the world till the sun rises tmr.

PMs will correct, they could go straight up, but we are on the verge of deflation not inflation.

Till the ECB, BOJ, FED or PBOC ramp up the presses, i'm comfortable waiting.


trav7777's picture

paper doesn't get more worthful in cascading sovereign default situations.

this is like a nightclub need to be making your way to the exits at the first sign of smoke and not after the stampede begins.  Those deflationists looking for that huge "buying opportunity" for their precious paper notes (backed up by defaulted debt and BK sovereigns) are akin to people saying they'll stay in the nightclub and pick up dropped cellphones and wallets after the panic begins.

qussl3's picture

True, but i have enough of a chunk of my net worth in bullion as is, and my fiat isnt USD,EUR, CHF or RMB either and no more than annual expenses plus a bit.

So I'm comfortable waiting, defaults are usually deflationary, though due to the size of this one perhaps they will go nuts and choose to print and hyperinflate rather than be hung now.

We are still a few steps away from truly damaging inflation tho, the wage price spiral only exists now in China, and if it wasnt for them being exporters of deflation for the last 2 decades and a billion strong, i daresay commods would be MUCH lower than where they are now regardless of how much QE is done.

Likewise PMs to a degree.

I see no benefit to chasing prices here, as everyone's hair is on fire, odds are we dig a deeper hole but no societal breakdown, so i wait.

Not anywhere near where TSWHTF so im somewhat sanguine.

IQ 145's picture

 "On the verge of deflation--" It must be terrible to not even understand the standard definition of what you imagine you're discussing.

El Oregonian's picture

Can someone pass the marshmellows?