This page has been archived and commenting is disabled.
There Goes The Neighborhood: European Sovereign Default Contagion Goes Virulent
Contagion is here. Portugal and Greece default risks are now racing who can hit 500 first... Then 1,000... Forget the bond vigilantes: the sovereign default vigilantes just called Almunia's bluff.
At last check SovX was flirting with the record century mark, Greece was almost back to record wides with some bids of 410 bps floating around, while Portugal, which is today's whipping boy, exploded to 215 bps. We eagerly await to see which other country will join the CDS ballet. Almunia is now openly waging a two-front war, which will soon become multi. The last time this happened to a European, the results were not that good.
And guess what: Portgual is now openly refuting that it has any problems. Has Dick Fuld been giving "How to blatantly lie about the true state of your [company/country]" motivational talks? The country's debt chief Alberto Soares, dismissed the market views that its 12 month T-bill auction on Wedensday had failed (Right, it simply just got priced about 50% weaker than 2 weeks ago.)
"We maintain our financing programme for the first quarter as previously announced," said Alberto Soares, the head of the Instituto de Gestao do Credito Publico, or IGCP. He noted that the tail on Wednesday's T-bill auction was "huge."
Away from CDS, 10 Year Portugal OT to German Bunds widened to a fresh post-EMU record of 155 bps.
Zero Hedge's favorite risk exposure, US and Germany CDS, keeps drifting ever wider, with the USA now at 50 bps and Germany at 41 bps. Look for much more action here very soon.
»
- 12347 reads
- Printer-friendly version
- Send to friend
- advertisements -
Forgive my naivety, but don't these countries need something other than dollars?? I.e. SELL dollars to purchase their own ccy to be bailed out?? Isn't that gold positive?? Am I dreaming or the mafia (PPT) are shooting their last bullets??
You seem to forget that everyone in the world is short dollars right now. Bernanke just unwound all of the foreign currency swaps, too. Remember what all the goldbugs were pitching about the USD going to zero? Well, a lot of people believed that crap. If there is a dollar squeeze, the dollar is going to shoot the moon, and the EU is dead in the water.
Right and wrong. Depends on your time horizon. All fiat currencys are sprinting like snails to failure and revaluation. The US Dollar is the slowest snail (but it will eventually get to the finish line, completely worn out, depleted and worthless). When you are trying to calculate ratios and the denominator is slowly approaching zero, weird things happen.
"everyone in the world is short dollars right now"
Actually that is not true.
If you look at the Commitments of Traders report, Funds and Specs are near record longs on the dollar index. The commercials (the banks) are taking the other side of the trade as market makers.
As far as unwinding the swaps, that is with the concurrence of the central banks of Europe who have 'fixed' the huge problem of the eurodollar short squeeze from a year or so ago, due to failing US dollar assets held by their commercial banks.
The euro could be dead in the water, I cannot say. But it is important to understand the facts as they are. And you do not seem to have them.
Haha - once that happens... the big banks with access to the lending window and, count them, 1 trillion dollars in excess reserves, will quite literally be able to buy the world.
With US sovereign debt in the stratosphere, and the current administration about to send it into orbit (and let's face it, unfunded obligations left the solar system a long while ago), the dollar has nowhere to go but 0.
Nothing to worry about folks. Portugal and Greece just filed to become bank holding companies. The Fed has it covered.
Sheesh, all this hand wringing over nothing.
28 DAYS LATER
OR
28 WEEKS LATER !!!!!!!!!!!!
HURRY , MUST GET 3 FREE GLOBAL WARMING VACCINES
It's a good thing the Dubai crisis isn't one anymore.
I hope all the good people across the pond got gold while the getting was good--and possible...now The latest Willie commentary:
SNIP:
http://news.goldseek.com/GoldenJackass/1265248800.php
Fast approaching is the event of GAME OVER for London, a condition that has already reached critical level, according to a key reliable source of information with London connections and direct experience with its market events. How long can a major metals exchange sell contracts but have miniscule supply of gold in their vaulted possession? The paper gold market and the physical gold bullion market have finally separated in a practical manner, meaning actual gold has almost no role anymore in London paper contract settlement. The absence of gold in London requires extraordinary tactics to settle contracts and to obtain gold bullion. Red tape procedures delay delivery for individuals, and bribes accompany gold delivery demands as standard practice. The London Bullion Market Assn has almost zero gold, its supply having been drained in high volumes since early December, a process currently in acceleration. The opportunity to convert fiat money into precious metal at prices considered reasonable is also vanishing.
The London gold banker said,
"There is going on a lot more than meets the eye. The physical system is actually consolidating bigtime and is organizing itself with lightning speed, totally hidden from pretty much anyone, even the so-called insiders. The paper precious metal market and the physical precious metal market have defacto disconnected. The paper and physical gold markets currently operate in parallel universes. The outflow of physical metal from bank vaults is happening at a mind bending pace."
England's internet will go down and A naked lady will come to suck the life out of them.
http://www.youtube.com/watch?v=P1Kn-iXK9j0&feature=related
I never know if I can trust any information on those goldbug sites because they always use some doom and gloom scenario to sell you their product. The crazier the story the better. It's loony. The spin on that one is a fine example of how these writers attempt to capture the imaginations of fearful individuals.
Yeah, even the likes of Glen Beck is shilling for gold.
SovX WE S2 touched a high of 104 this morning, it's currently 101/103. That's 20 wider than Main (Corporates!)
Trichet is a joker. Officials have ZERO credibility right now.
I'll put 5 bucks on Belgium and 10 bucks on Spain!!
Let's hope my horses win this race :)
Who gets scratched?
The EURO will soon prove that "blanket currencies" are not a solution....
Each country SHOULD have their own....
But how do you indoctrinate and get people used to massive oppressive stifling rules laws and regulations if you don't form these stupid little unions. That's no way to make progress towards the necessary soul crushing stifling buerocratic system required for just a few people to control an entire planet.
I hear what you are saying, my question is how do I participate?
What proxy vehicle is available to an individual? I can't buy CDS I don't think.?
PIGLitS are breaking out...Friedman said the Euro would never make it past its first crisis....
This morning i put some charts RED ALERT EUROPE... At this time charts are beeing broken.
http://midasfinancialmarkets.blogspot.com/2010/02/red-alert-indices-europeus.html
Did the lines stop squggling in the borders and go and start coloring outside the coloring book?
Good thing there isn't a gigantic (as in greater than the US) housing bubble in Canada too... cuz then things could get real messy real quick. Oh wait. Never mind.
http://catharticranter.blogspot.com/2010/02/canadian-moral-superiority-prudent.html
The swan is looking distinctly grey.
Next up --- Fade to black.
Game - Set - Match
"Babylon burning / And they got no water / Fire, fire / And they got no water"
thanks for the info
I am a capitalist, sold my gold at 1100, will by it back at 980, this will surely enrage the progressive parasites! We still have time.
Probably any path you take, the rich boys and manipulators have that covered. It's just a shell game. Think about it less resources and signs galore, that the US empire is on the decline, big time. That goes double for other countries in the west. Asia rises, but runs into the same resource depletion curves that the rest of us have hit. Where is the recovery? Jobs? No they are shipped overseas. Tarriffs on the goods and trade wars? No the big boys have the politicians in their pockets and that won't do any good, look at Iceland and other HIGH tax VAT countries, it doesn't them any good. They are all poor and resource depleted and left with nothing courtesy of the huge expanding machine, that we blew up and then deflated and shipped off to China. All the green shoots and alternate industries are a joke compared to what was sold. Everyone cannot be on top and with declining resource curves those on top have to be fewer and fewer. We are building a taller and taller pyramid, reaching higher for the super-rich, but the base is now starting to crumble everywhere. Some winners and losers, all examples, but overall 9 billion people needing food and oil, and a straining and dying earth unable to give it. The bailout and green shoot and inflated fiat, will be like Zimbabawe, the state of Haiti today, and perhaps Hurricane Katrina zones. Haven't seen the World Trade Center rebuilt yet. Space shuttle is on it's last legs and not replaced. USA will not go to the moon, because Nasa is full of losers who are bought off by the government, to do nothing. Decline of technology in the west and we squander our lives and money chasing ragheads all over the world with visions of world conquest. Gotta keep the trade going for opium. Religion is the opiate of the masses, but opium is the religion of the rest or perhaps the west. CIA and IMF types if scams happened to others to strip them of resources. Who would have known the sins we were doing as a group to others would come home to roost. Who knew that our group sins were even happening, we were ignorent and followed our own selfish desires for the high horsepower life that only fossil fuels could give. Now we all get to pay the piper. Paper fake frauds and blow up wealth crumbles, some with influence, make deals and profit, while the rest pay for it.
It's not going to be pretty. Who knows what's worse, organized bank scams all over the globe deciding who will live and die or crazed hungry revolutionaries, destroying the system entirely. It's a ringside seat at the decline of the modern world, and everyone has their "winners and losers" as if the money and short term gain, will mean anything.
Probably any path you take, the rich boys and manipulators have that covered. It's just a shell game. Think about it less resources and signs galore, that the US empire is on the decline, big time. That goes double for other countries in the west. Asia rises, but runs into the same resource depletion curves that the rest of us have hit. Where is the recovery? Jobs? No they are shipped overseas. Tarriffs on the goods and trade wars? No the big boys have the politicians in their pockets and that won't do any good, look at Iceland and other HIGH tax VAT countries, it doesn't them any good. They are all poor and resource depleted and left with nothing courtesy of the huge expanding machine, that we blew up and then deflated and shipped off to China. All the green shoots and alternate industries are a joke compared to what was sold. Everyone cannot be on top and with declining resource curves those on top have to be fewer and fewer. We are building a taller and taller pyramid, reaching higher for the super-rich, but the base is now starting to crumble everywhere. Some winners and losers, all examples, but overall 9 billion people needing food and oil, and a straining and dying earth unable to give it. The bailout and green shoot and inflated fiat, will be like Zimbabawe, the state of Haiti today, and perhaps Hurricane Katrina zones. Haven't seen the World Trade Center rebuilt yet. Space shuttle is on it's last legs and not replaced. USA will not go to the moon, because Nasa is full of losers who are bought off by the government, to do nothing. Decline of technology in the west and we squander our lives and money chasing ragheads all over the world with visions of world conquest. Gotta keep the trade going for opium. Religion is the opiate of the masses, but opium is the religion of the rest or perhaps the west. CIA and IMF types if scams happened to others to strip them of resources. Who would have known the sins we were doing as a group to others would come home to roost. Who knew that our group sins were even happening, we were ignorent and followed our own selfish desires for the high horsepower life that only fossil fuels could give. Now we all get to pay the piper. Paper fake frauds and blow up wealth crumbles, some with influence, make deals and profit, while the rest pay for it.
It's not going to be pretty. Who knows what's worse, organized bank scams all over the globe deciding who will live and die or crazed hungry revolutionaries, destroying the system entirely. It's a ringside seat at the decline of the modern world, and everyone has their "winners and losers" as if the money and short term gain, will mean anything.