Weak Italian, Belgian Bond Auctions Send EUR Lower, Sovereign Spreads Surging

Tyler Durden's picture

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bonddude's picture

The RUN on the Eurozone has begun ! F#CKIN' SH!T !

johngaltfla's picture

Coming here soon....

DonutBoy's picture

Not as long as the Fed guarantees a profit to all primary dealers.  Under QE a treasury bond auction cannot get too ugly.

johngaltfla's picture

Care to wager on the consequences of a 50% SOMA takedown of an auction?

Oh regional Indian's picture

I suspect Italy will come out smelling like paper roses compared to the rest of Europe.

After all they play host to god's own rep here on earth, and sources say he's rich. 

My contrarian mind says Italy will be the surprise one standing, grand dysfunction and all.



Dismal Scientist's picture

Italy's debt is mostly owned by households or domestic institutions, similar to Japan. I think you're right. Its still Spain that is the big problem, since noone gives a toss about the Belgians.

ZeroPower's picture

+1 re Belgians. EU chose it as an HQ for a reason - country is too small to matter politically (before the EU that is) and economically, it depends on its close cousins the French and Dutch.

litoralkey's picture




Or, Free Flanders from Freedom!



Whichever floats your boat.

DonutBoy's picture

I think the Irish "gift" sealed the fate of all sovereign debt auctions.  All new debt shorted until the ECB forces the sovereign to absorb all risk for the "senior" (German) bond-holders.  They've guaranteed contagion - because contagion means no haircuts for the guys running the ECB.

dojiman's picture

Its going to get cheaper to buy those Italian super tuscans, that cant be bad for us non banksters out there. 

Josephine29's picture

I guess the fact that the EU is using average interest rates in its statement is making everybody wonder exactly how much it will be charging Ireland for its loans. If the average rate is 5.8% and other rates such as the IMF are cheaper then the EU must be charging more.

According to notayesmanseconomics.

So the remaining funds from the bilateral loans/EFSM/EFSF cost 4. 9 billion less 1.49 billion or 3.41 billion Euros per year. As they are 45 billion in total then the interest rate on them is approximately 7.5%. This is not what it has been badged at.


If this is right no wonder they are not revealing it!





Buck Johnson's picture

The EU is melting down and the market people are shorting it in order to make money.  They know that eventually there isn't enough money for them to continue to bailout countries that won't even pay the money back.  Italy has more debt than Spain, and I started to hear about Belguim earlier today I should have known.  I think what will happen is a run out of the Euro back into their own currencies. 

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