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European Sovereign Spreads Plunge To Nine Month Lows As EUR Breaks 1.3300

Tyler Durden's picture




 

The world can't get enough Greek Government Bonds (now trading above 50% of face! on 5-notch S&P upgrade and ECB collateral news), Italian and Spanish government bonds (at nine-month low spreads with the biggest one-week drop in risk in over three-months and tighter by 25bps this week alone), Euros (EURUSD at 8 month highs with a 430 pip ramp in the last week), and Italian and Spanish stocks (at nine-month highs and up 3% this week). Technical breakouts every you look in Europe as the almost unprecedented rally of the last week - amid huge and escalating volumes in stocks - goes on. The only thing we would add is that for the first time in a week, European stocks, bonds, and the EUR are closing the European day-session off their highs. Apart from that - everything is golden, problem solved.

 

Greek Government Bond (price)...

 

Italian Bond spreads...

 

Spanish Stocks...

 

EURUSD liftathon...

 

European VIX rolled over today...

 

Charts: Bloomberg

 

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Wed, 12/19/2012 - 12:49 | 3078991 Boilermaker
Boilermaker's picture

Not the EUR breaking $1.33, I HATE that.

What's next???!!!  $1.34??  Then what?

Where does it end?!?!  Where are the parents?!

Wed, 12/19/2012 - 12:53 | 3079018 Thomas
Thomas's picture

All this illustrates the sillyness of QE. In some ways, monetary policy and global warming are similar: you pump up the reading with an accompanying increase in volatility. 

Wed, 12/19/2012 - 13:31 | 3079224 ToNYC
ToNYC's picture

Do the Math, make your Z's to order. Manipulate the numerator or denominator alone without a corresponding factor. QE is dividing by almost zero...whoops!

X divided by Y  = Z

 

 

Wed, 12/19/2012 - 13:38 | 3079271 aint no fortuna...
aint no fortunate son's picture

Problem? What problem? You fringe bloggers are always trying to stir up trouble

Wed, 12/19/2012 - 12:48 | 3078996 Winston Churchill
Winston Churchill's picture

Insanity looks like this.

Wed, 12/19/2012 - 12:50 | 3079009 TruthInSunshine
TruthInSunshine's picture

This isn't complicated.

Draghi, like The Bernank, can provide liquidity (all he wants, in fact).

What Draghi, just as The Bernank, can NOT provide, is job creation, aggregate demand, balanced budgets or any true economic recovery.

The world is awash in zeee liquidity. Credit markets are at nosebleed levels. Yet the economy deteriorates in almost all developed (and many developing) areas.

Day after day, day after day,
We stuck, nor breath nor motion;
As idle as a painted ship
Upon a painted ocean.
Water, water, every where,
And all the boards did shrink;
Water, water, every where,
Nor any drop to drink.
Wed, 12/19/2012 - 12:55 | 3079033 From Germany Wi...
From Germany With Love's picture

Draghi can provide all the liquidity he wants to? I think not. The more he pumps into the market, the greater the chance for dissent in Germany. But Merkel requires everything to be quiet on that particular front. She needs the full support of her party next year, as well as every vote she can get.

Wed, 12/19/2012 - 13:01 | 3079053 TruthInSunshine
TruthInSunshine's picture

So what is the ECB doing now, under the direction of Super Mario, and when will it stop?

That's right:  1) Printing, and 2) Never (so long as the ECB exists)

Wed, 12/19/2012 - 12:52 | 3079015 fonzannoon
fonzannoon's picture

gold longs and dollar longs taking a beating together. odd.

Wed, 12/19/2012 - 12:56 | 3079044 buzzsaw99
buzzsaw99's picture

apples and oranges. one is a commodity the other is a currency.

Wed, 12/19/2012 - 12:58 | 3079054 ParkAveFlasher
ParkAveFlasher's picture

Question for the group: if I take a stack of 100's and keep it next to the tomato sauce cans in the cupboard, taking some out periodically to trade for other consumables, does that make USD a commodity for all intents and purposes?

Discuss amongst ya-selves while I shpritz.

 

Wed, 12/19/2012 - 13:36 | 3079247 Quinvarius
Quinvarius's picture

You have to treat paper dollar longs gently.  Bless their hearts.  

Wed, 12/19/2012 - 13:39 | 3079269 buzzsaw99
buzzsaw99's picture

yeah, it sucks to have money. I cry all the way to the bank. Liberace

Wed, 12/19/2012 - 14:28 | 3079521 ParkAveFlasher
ParkAveFlasher's picture

Now, to Liberace, gold WAS a commodity.

Wed, 12/19/2012 - 13:07 | 3079091 Winston Churchill
Winston Churchill's picture

Which is which  ?

Wed, 12/19/2012 - 13:36 | 3079251 buzzsaw99
buzzsaw99's picture

the commodity is the thing that has actual value. DUH! ;\

Wed, 12/19/2012 - 17:20 | 3080198 auric1234
auric1234's picture

That has to be FRN. As a commodity, makes useful firewood, or toilet paper.

 

Wed, 12/19/2012 - 12:58 | 3079050 Kreditanstalt
Kreditanstalt's picture

What The hell is going on? 

Are those guys LEMMINGS?

Wed, 12/19/2012 - 13:00 | 3079057 fiddler_on_the_roof
fiddler_on_the_roof's picture

ZH crowd is going mad as EUR is going up. They ask - How can this be possible with all that EU bashing by ZH for past 3 years ?

As EUR goes up, the collective cry of ZH in terror will amplify.

Wed, 12/19/2012 - 13:57 | 3079379 Spitzer
Spitzer's picture

Not only ZH

The whole world agreed on one thing over the last 4 years. Keynesians, Austrians (one even wrote a book on it) Goldbugs, MMT's , peak oilers, Time magazine, Fareed Zakari all agreed that the EURO was and is worse then the dollar.

Typical

Wed, 12/19/2012 - 17:30 | 3080244 auric1234
auric1234's picture

It's the price of EUR in USD that goes up. You think that one goes up and the other goes down, cause when you look at the relation you miss the fact that both are going down. It's just that one is faster than the other.

 

Wed, 12/19/2012 - 18:27 | 3080514 fiddler_on_the_roof
fiddler_on_the_roof's picture

We know what you said is tru for all currencies - not just the EURO.

But that is not the message you get from ZH articles. Most are centered around - "EU going to disintegrate, EURO going to zero" etc.......

The non-stop EURO bashing and clapping here had gone for too long and anyone who listedned and acted on that shorting EURO against US Dollar , lost a ton of money.

Fri, 12/21/2012 - 17:16 | 3088271 auric1234
auric1234's picture

Why waste time on that game? It's all rigged. Just betting on who prints faster.

 

Wed, 12/19/2012 - 13:00 | 3079062 fonzannoon
fonzannoon's picture

nah gold is a currency. 

Wed, 12/19/2012 - 13:00 | 3079065 Yen Cross
Yen Cross's picture

 Europe is in a recession. That ramp up in the euro just screws their exports. But hey, Europe has an inflation problem so now they can aford to buy some "decent food to eat", while they sit on the couch waiting for their economy to recover.

 

Wed, 12/19/2012 - 13:51 | 3079352 skydrake
skydrake's picture

"But hey, Europe has an inflation problem"

 

Sure? In which country?

 

http://www.clearonmoney.com/dw/lib/exe/fetch.php?w=480&media=public:euz_...

Wed, 12/19/2012 - 14:04 | 3079412 Yen Cross
Yen Cross's picture

 Hey dipshit, Italy, France, England, How's that for ya! High cost of living and commodity prices... Want me to keep going?

Wed, 12/19/2012 - 19:29 | 3080746 skydrake
skydrake's picture

High cost of living isn't inflation. There are two different parameters.

Wed, 12/19/2012 - 13:03 | 3079075 Crtrvlt
Crtrvlt's picture

parabpolic ggb's

Wed, 12/19/2012 - 13:07 | 3079094 muppet_master
muppet_master's picture

EUR 1.33 = TOP

SELL NOW !!!!! spx topped OUT yesterday @ 1447...

Wed, 12/19/2012 - 14:04 | 3079410 ivana
ivana's picture

top=1.33562 methinks :-)

Wed, 12/19/2012 - 13:08 | 3079100 Uskatex
Uskatex's picture

BREAKING:

Italian court delivers a verdict convicting

Wed, 12/19/2012 - 14:06 | 3079428 ivana
ivana's picture

there are going to be a lot of verdicts ... all together penalties will come max to cca 10% of profits bastards collected during fraudulent "business"

Wed, 12/19/2012 - 13:10 | 3079114 ziggy59
ziggy59's picture

S&P earlier raised rating on Greece, no?

Wed, 12/19/2012 - 13:18 | 3079159 Kreditanstalt
Kreditanstalt's picture

All these people CRAVE "yield".  In cash.

They're pension funds, banks, companies, insurers, annuities, mutual funds, "non-bank entities", trading firms, brokerages, etc.  They have to pay out in cash, regularly - to unitholders, policyholders, pensioners, shareholders, bondholders.  They don't have the ability (or cash!) to put unlevered capital into a market just to try for speculative gains.  They are levered to the hilt and probably their returns are predicated on some absurd 6-7 or 8% returns...

Us, we just speculate with our own unlevered capital.  THEY can't afford ANY loss, however small.  They are and have been in a desperate search for yield without risk.   Which doesn't exist.  Look at dividend payers!  And momo stocks.  And BONDS of all kinds...

Their definition of "investment" is something that gives off cash.  Much different from speculation, which is what the market is calling for, and what RISK is forcing us and them into.  No escape from risk.

I hope they go under - soon.  They will if the central planners lose control of some of the juggling balls.

Wed, 12/19/2012 - 13:20 | 3079164 yogibear
yogibear's picture

Who just bought a whole lot of Greek debt and wants to unload at a huge profit?

 

Pay a maximum price for a ticket on the Titanic.

Wed, 12/19/2012 - 13:36 | 3079248 TruthInSunshine
TruthInSunshine's picture

If he has two thumbs I'll venture his name starts with an M and he works at the ECB, but I doubt he's looking to unload it at a huge profit (he's merely kicking the can).

He has a liquidity printer, too.

Wed, 12/19/2012 - 13:35 | 3079245 MillionDollarBoner_
MillionDollarBoner_'s picture

Clearly, SuperMario is not printing fast enough...

Wed, 12/19/2012 - 13:37 | 3079260 adr
adr's picture

We are heading into year end so the Euro must go up so US corporations can book higher dollar denominated profits on what they did sell in Europe, so they can beat EPS estimates by pennies again, and allow he market to have its OH MY GOD BETTER THAN EXPECTED January rally.

This same exact story has played out almost every quarter for the past four years. It is a totally manipulated game so "in the know" front runners can profit off every dip and rip.

Oil spiked $2 for no other reason than someone bought a butload of contracts at $86 and wanted the extra cash to sell at $90 right away.

Nothing is going to change until we find out if bankers can bounce when dropped from the 78th floor.

Wed, 12/19/2012 - 13:37 | 3079261 LawsofPhysics
LawsofPhysics's picture

Well then, everything must be "fixed" then.  Well, that's a relief. 

Wed, 12/19/2012 - 15:26 | 3079796 ThirdWorldDude
ThirdWorldDude's picture

The race is still on; EURUSD above 1.33 only means Mario is losing to Shalom.

 

And here I was thinking only blacks (Gideon Gono comes to mind) were good sprinters...

Wed, 12/19/2012 - 13:37 | 3079264 Quinvarius
Quinvarius's picture

I think we are going into the endgame ramp of the bond markets.  All bubbles end the same way. 

Wed, 12/19/2012 - 13:42 | 3079289 Bastiat009
Bastiat009's picture

Summer 2011, death of the US$ ... 6 months later, US$ was up.

Summer 2012, death of the euro ... 3 months later, euro is up.

Currencies die hard ... what will gold do now?

Wed, 12/19/2012 - 13:55 | 3079372 ivana
ivana's picture

check junl bond etf (JNK) approaching multiyear high rising wedge end ... fasten your seat belts crash is coming in 3,2,...

Wed, 12/19/2012 - 13:58 | 3079381 Buyemall
Buyemall's picture

Top ticking....

Wed, 12/19/2012 - 14:24 | 3079459 Bastiat009
Bastiat009's picture

The euro is seriously outperforming gold ... the market believes that the euro will last longer than gold. You can always insult me for stating a fact.

European stocks are also at or close to the top for the year.

Wed, 12/19/2012 - 16:32 | 3079681 falak pema
falak pema's picture

doomers, mayans and hopium; we are in a roller coaster world dichotomy. 

chaos theory based in economia on Schumpeter's Creative destruction and permanent innovation faces philosophia perennis...to define the trace of human civilization's ongoing thread.

Take your pick. Do you believe in the TOP DOWN "Grand Design/Great Enlightenment" meme of Human rational progress as iconised by FDR/Keynes  at the beginning of the Pax Americana age; or do you believe in the BOTTOM UP vision of small man's incoherent, evanescent universe, based on haphazard human progress in brutal chaos mode fed on creative destruction thru innovation by transient Ubermensch, who are shooting stars that are part of Chaos dynamics as they never achieve anything sustainable.

Two approaches of the historical thread of man's voyage  : chaotic illusion of civilization vs permanent onward progressing civilization. 

 

Wed, 12/19/2012 - 20:40 | 3080975 bobbydelgreco
bobbydelgreco's picture

the pathetic belief in the power of markets is being shown for what it is pathetic; up against ruthless briliant and incredibly powerful (can you print all the money you want) central bankers the market lies whimpering bitch slapped in the corner doing what is told; so do the bankers get there way? this old man says no, though ben & his pals can tame the markets they are no match for real life; by the way kids no one is; a real event (war civil unrest an election) will send the bankers & their plans into the toilet when? who knows how? my bet an italian election i could be wrong about the how but i am not wrong about real life winning

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