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Summary Of All Overnight Developments Out Of Europe As Spanish 10 Year Bond Spreads Hit All Time Wides
Even as the world wakes up to a stunner out of Korea, things in Europe are getting worse. Here is a brief summary of all the events in the increasingly troubled continent.
- Sinn Fein Says Irish PM Has No Support: The opposition party has tabled a motion of no confidence in Irish Prime Minister Brian Cowen (source)
- Wolfgang Schaeuble admits the end is near: The Irish debt crisis is putting the euro at risk, German Finance Minister Wolfgang Schaeuble warned Tuesday. "We are currently in a difficult international and European environment," Schaeuble said in a budget speech in parliament. (source)
- General weakness in European credit: CDS
indices are mixed with Xover 6 basis points wider at 465bps, HiVol 4bps
tighter at 154bps and Europe 2bps wider at 104bps. Holders of 92% of the current outstanding E750 million of Anglo
Irish subordinated debt yesterday agreed to accept just 20% nominal
value for the paper which will be exchanged for government guaranteed
securities (source) - Very poor Spanish 3-6 month bond auctions, with yields and Bid To Covers jumping, and the country selling (€3.2 billion) compared to the auction goal of €4-5 billion: Spanish 3-month auction for €2.091bln, BTC 2.34 vs. Prev. 2.77 (yield 1.743% vs. Prev. 0.951%); Spanish 6-month auction for EUR 1.165bln, bid/cover 2.6 vs. Prev. 2.08 (yield 2.111% vs. Prev. 1.285%). Spanish CDS about 20 bps wider as vigilantes consider speeding up the process of collapsing Europe
- Persistent rumor of Moody's downgrade of Portugal: probability 0.01%.
- CHF intervention needed but nobody willing to take on Fed: The head of the Swiss National Bank on Tuesday
sounded the alarm on the strength of the swiss franc and tied it to the
financial turmoil across Switzerland's borders in the Eurozone. Current exchange rate developments are a "major challenge" for
Swiss exporters, SNB governing board chairman Philipp Hildebrand said. (source) - 3 Month Euro LIBOR, which recently passed above the ECB's 1% key refi rate, and was seen as an improvmenet, is now back lower: When 3 month Euribor broke above the European Central Bank's key 1%
refi rate last month it was heralded as a sign of a return to normality,
but it has fallen back over the past eight trading sessions. Three month
euro LIBOR failed to make the 1% level and is now declining again. On Tuesday, three month euro LIBOR fell 0.25 bps to 0.97375%,
sterling 3 month LIBOR fell 0.125 bps to 0.73875% and dollar 3 month
LIBOR held steady (source) Elsewhere, three month Euribor fell for the eighth consecutive
day Tuesday, with the pace of decline accelerating as it dropped 0.4
basis point to 1.035% from 1.039% Monday. The 3 month Euribor/OIS spread widened 1.25 bps with the banking
sector under pressure amidst heightened concern over euro zone
peripherals (source) - Lastly, the ECB drained €66.0Bn In a 1-week term deposit tender, to sterilize the money used for sovereign debt purchases. The amount drained matched the total volume of government bonds
purchased by the ECB and settled as of last Friday and was up from the €65 billion drained previously. On Monday, the central bank reported
that it had purchased €713 million in sovereign debt on the secondary
market during the week ending November 19. (source)
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How long can they keep the lid on Europe? The question has always been when, not if, the euro bomb detonates.
As long as there's no starvation and dancing with the stars on telly, the lid is firmly on
Totally agree
Hey! Polish Ham. US Titanic will sink first but we are next in the queue, so sing with me:
http://www.youtube.com/watch?v=W9mhsW5aWJM
I call BS. Europe is done. As much as I hate the Fed, they won. Prepare for the depression to start in Europe next spring.
Only because you own the printing press!
I think the bigger question is, what are you doing in the meantime? If you see it coming and have conviction in what you believe, the extra time on the clock before detonation should be a gift.
Housing prices continue to fall? Good. That only gives me a chance to get a cabin on a remote lake in Wisconsin.
"Where's the money, Lebowski?!"
Hey, careful, man, there’s a beverage here!
RE prices are falling except for cabins on the lake in WI.
The biflation thing.
Sorry!
Here is a thought to add to your concerns jbc77. Reading notayesmanseconomics today I saw this analysis.
"As to how much aid Ireland will require I am starting to question if the proposed 90 billion or so Euro rescue package will in fact be enough. After all we still do not know the full-scale of Ireland’s banking problems and the history of them is that they have got worse as time has gone by. The problem is that if you raise the size of the bailout then you raise the size of the problem of it ever being repaid."
So in a sense this whole plan is doomed to failure however they try to package it up...
http://notayesmanseconomics.wordpress.com
The ticking is getting awfully loud.
Sign of the times: Europe is on fire, South Korea is in flames, and CNBC is talking about the shortage of chocolate.
It does have a material impact on their bon-bon consumption.
What more proof do you need that things are turning up? It's all good...
/ES bouncing hard off of yesterday's lows. I think we'll get a gap fill today. Not sure investors really care about the world blowing up (yet).
Which, of course, begs the question.....How many shares of Apple can you buy while under artillery fire?
Investors? ha! you must mean HAL 9000 and Getco...
Yes, I mean the kind of investor with a 5ms investment horizon.
Which chart are you looking at?
Thinkorswim
Hey Engineer, hello!
I've wondered where you were.
You were correct about there being no strong reason to short GM over the last few days, however, I think you said something about tomorrows being a good day.
The best to you.
Aye carumba!
This is proof that the Domino theory works.....we are just going country to country..we all know which one is next....is the lies that come before the settlements is what makes me angry...the "no we are not talking to the EU" then a week later..." adeal has been struck between the EU and XXXXX country" The bankers are controling the countries....it used to be armies....at some point it falls apart...and unfortunatly the little guy will be hit the hardest...the big banker will have moved his monies affshore to a safe haven..
VERY INTERESTING indeed.
I'm enjoying a piece of Potuguese pie with a cup of Spanish cocao right now as we speak. There's money to be made on the lies of others (EU offi-shills)
I will consider this over a glass of fine tempranillo later on.
when will lots be cast to choose who puts Moody's out of their misery?
Overnight developments in Europe are just the slippery slope that our analysis of EFSF from last week described (tfmarketadvisors.blogspot.com). Ireland CDS at 580, Portugal at 500 and Spanish CDS wider and with a weak auction. Greece at 1000, and that without having the need to refi for the next 3 years. "Market confidence building" doesn't work when that's the only real goal - underlying problems have to be addressed.
And lets not forget how much outrage there will be in the US if the mainstream financial media ever bothers to report on how much US taxpayers (thru the IMF) will be paying to bailout European banks.
Tyler, who were the losers on the Anglo Irish subordinated debt?
Widening spreads bitchez!
Would appear the Irish government is going to collapse. If it does I'm thinking there would be a large probability the Irish banks will run out of Euros to hand out before the next government is elected. Bank run is not far off!!!
Dec. 7th baby!
Merkel's comments not helping. Nor should they. Germany runs risk of getting dragged down by bailing out everyone else.
Germany appears to be positioning itself for a very questionable future in EU.
Nationalistic tendencies have not been expunged completely. (That's perhaps a good thing.)
Who could blame them?
Someone told me that Steve Jobs was about to buy Irland and then rename it to I-Land. To add, I think that Zapatero should sell the S and rename his country to Pain and that Italy should be called Litany.
LOL, yous a funny guy!
+1000
You're a bright bulb so early in the AM!
Or perhaps you are in EU land.
Yes I am. In an EU land that is. And I can tell you, even if you already are aware, that the light in the tunnel is nothing but a train running in warp speed. Watch out!!
TD is This contagion? not contagion.. not contagion, Contagion!