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Europe Plunges By Most In Six Months

Tyler Durden's picture


We warned last week that European markets were beginning to show signs of cracking. European stocks had surged on to new highs while credit markets had decidedly not joined the liquidity-fueled exuberance. Sure enough a few days later and Europe in general is weak, but Italy and Spain are under significant pressure. The last four days have seen the biggest plunge in over six months with the IBEX (Spain -5.7%) and Italy's MIB -6.7%. At the same time, Europe's seemingly invincible OMT-promise-protected sovereign bond market has started to underwhelm. Italian bond spreads are 32bps wider and Spain 28bps wider - the biggest increase in risk in two months. Europe's VIX has surged from 14.5% to almost 19% today in the last 4 days and even Greek government bonds are losing their luster, -6.5% in the last few days. Whether this is exacerbated by European leaders jawboning the strength of the EUR down, or simply we hit the limit on reality amid Italian bank fraud, Spanish political fraud, referenda votes, and macro- and micro- fundamentals snapping; this is the worst performance in Europe in six months. It would seem that if the tail-risks in Europe are starting to re-appear then at least one of the legs of global equity exuberance is starting to break.

European Stocks are falling rapidly!!


Worst few days in over six months...


led by banks (Italian banks)...


catching down to credit's weakness...


as sovereigns start to crack wider also...


Charts: Bloomberg


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Mon, 02/04/2013 - 09:52 | 3212980 TotalCarp
TotalCarp's picture

Lets all hope bernanke's minions choke on the way to work today..

Mon, 02/04/2013 - 10:21 | 3213077 economics9698
economics9698's picture

Fall 2013, crack-up boom.

Mon, 02/04/2013 - 10:26 | 3213095 Never One Roach
Never One Roach's picture

EU has a "jobless recovery" ...same as USA.

Mon, 02/04/2013 - 17:23 | 3214400 rotagen
rotagen's picture

Oh noes, trouble in the Soviet Union of Europe? Ize never heard sumthin such beforz!

Mon, 02/04/2013 - 09:54 | 3212986 LawsofPhysics
LawsofPhysics's picture

U.S. Ten year yield above 2.0 %.  Ben has some bonds to buy, market may go down a bit as his central bank minions buy with the sheeple's 401k monies (for a small fee, of course).

Mon, 02/04/2013 - 10:01 | 3213012 fonzannoon
fonzannoon's picture

I think we ran up to what...2.25% last year around this time. Everyone ran around with their hair on fire that that the bond bull market was ending. Then something popped up and everyone went running back. Same as always.

Mon, 02/04/2013 - 10:07 | 3213031 TotalCarp
TotalCarp's picture

In the cross asset space the cheap fuel to the run up has been funding from usd and jpy, both getting crushed against eur. Posis quite stretched, time for fat fks to try and get out of a burning house all at once.

Mon, 02/04/2013 - 10:02 | 3213015 kliguy38
kliguy38's picture

DON'T BUY GOLD.....get into those fochin' lemmings

Mon, 02/04/2013 - 10:28 | 3213101 LawsofPhysics
LawsofPhysics's picture

I hold numerous productive assets and physical PMs.  When fraud is the status quo, possession is the law.  All paper is burning, but it doesn't hurt to front run the stupidity to aquire more physical, now does it?

Mon, 02/04/2013 - 11:09 | 3213238 eclectic syncretist
eclectic syncretist's picture

WTF you worried about?  The Central Banksters are all over this.  Didn't you hear they came up with a plan of action at Basel summarized by their keynote speakers here


Mon, 02/04/2013 - 10:04 | 3213025 Lucius Corneliu...
Lucius Cornelius Sulla's picture

The 10 year is the canary in the coal mine.  The FED is not in control.

Mon, 02/04/2013 - 10:20 | 3213074 economics9698
economics9698's picture

And they have not been since 2008.  Dumb fucks.

Mon, 02/04/2013 - 10:28 | 3213100 buzzsaw99
buzzsaw99's picture

gold slightly down too. by your logic gold buyers are dum fuks too.

Mon, 02/04/2013 - 10:27 | 3213098 buzzsaw99
buzzsaw99's picture

gold slightly down too. by your logic gold buyers are dum fuks too.

Mon, 02/04/2013 - 11:14 | 3213262 eclectic syncretist
eclectic syncretist's picture

The banksters have been selling the bonds to get in on the big stock market boom that's taking place.  This market is FLYING.  and if it doesn't come down soon my puts are going to expire worthless yet again, SOAB.

Maybe BS Berstanke will have to get the other banksters to sell equities and buy bonds for a while.  Doesn't look like he's got nothing else to do at the moment.

Mon, 02/04/2013 - 09:54 | 3212988 SheepDog-One
SheepDog-One's picture

HEY it WASN"T the 'elections' they were proping up markets for, it was for the StuporBowl after all!!

Mon, 02/04/2013 - 09:55 | 3212990 orangegeek
orangegeek's picture

Euro is tanking too.  This should send the US Dollar way up.   Euro has been in vertical ascent since mid 2012.

Mon, 02/04/2013 - 10:55 | 3213187 Orly
Orly's picture

No, it's not.

Mon, 02/04/2013 - 09:56 | 3212995 SheepDog-One
SheepDog-One's picture


Mon, 02/04/2013 - 09:56 | 3212996 Obchelli
Obchelli's picture

Where do they find all this bulls? Listening to David Bianco from Deutche is just sickening (Yes I know I watch CNBC ;-(). No reasoning nothing - just bullish. Based on f-ing what?

Mon, 02/04/2013 - 10:03 | 3213019 unrulian
unrulian's picture

bullish based on their need to steal your money and perpetuate the lie...what else?

Mon, 02/04/2013 - 10:07 | 3213030 10PastMidnight
10PastMidnight's picture

It is directly tied to the fleecing of the people, moar fleece needed = moar bulls needed. You know Benny would never tell the girls he has a 3 inch penis, so he sends in the bulls to let them know, he is hung at 8 plus.

Mon, 02/04/2013 - 10:56 | 3213190 Orly
Orly's picture

The girls?


Mon, 02/04/2013 - 12:53 | 3213544 falak pema
falak pema's picture

I think he meant a three inch toe nail; now that would impress the girls if it had nail paint and a naked toe  tatoooooo!

Mon, 02/04/2013 - 09:58 | 3213000 100pcDredge
100pcDredge's picture

I couldn't care less.

Mon, 02/04/2013 - 10:08 | 3213036 Water Is Wet
Water Is Wet's picture

Yep.  This European bullshit dragged on for all of last year.  I don't want to hear about it anymore.  It's time for a new show.

Mon, 02/04/2013 - 09:59 | 3213005 Capitalist
Capitalist's picture

Fear and Loathing in Europe.

Mon, 02/04/2013 - 10:03 | 3213020 GetZeeGold
GetZeeGold's picture



Break out the Devil Ether. It will accelerate the process.

Mon, 02/04/2013 - 10:15 | 3213058 Non Passaran
Non Passaran's picture

Roger that, but I demand Fear and Looting!

Mon, 02/04/2013 - 10:01 | 3213010 TrumpXVI
TrumpXVI's picture

This is a VERY bullish development!

Mon, 02/04/2013 - 10:01 | 3213011 Peter Pan
Peter Pan's picture

There are limits to manipulation and the limits are now within sight. It's strange how the ordinary person is fully aware of how bad things are and it is only the top 1% that needs to wake up as well but is hindered from doing so by the mirage of a rising stock market.

Mon, 02/04/2013 - 10:03 | 3213021 yrbmegr
yrbmegr's picture

"We warned last week...."  You have warned every day for the last five years.  The thing about predicting the end of the world is that, eventually, you will be right.

Mon, 02/04/2013 - 10:11 | 3213043 katwoman
katwoman's picture

Yes, god knows how much money I have lost buying ES puts in the past 2 years...and just now

Mon, 02/04/2013 - 10:15 | 3213053 Haus-Targaryen
Haus-Targaryen's picture

Hey dumbdumb-


ZH's economic, M3 and M6 analysis of the EuroCrisis is spot on.  The Currency should have died in Augsust/September of 2012.  What ZH (and Nigel Farage, and me, and a ton of other people) underestimated was the abject political fanatiscism of the people running the EMU.  For these ideologues it is no longer just a economic union or political expirment -- it is their religion. 

Mon, 02/04/2013 - 10:15 | 3213059 reload
reload's picture

Amen - shame only +1 green available.

Mon, 02/04/2013 - 10:20 | 3213072 Temporalist
Temporalist's picture

I have a Von Rompuy and Draghi crucifix on my dashboard.

Mon, 02/04/2013 - 11:53 | 3213392 yrbmegr
yrbmegr's picture

There is an old story about crying "wolf!"

Mon, 02/04/2013 - 14:15 | 3213775 JimBowie1958
JimBowie1958's picture

This isnt about 'wolves' dude, its about the FED playing dice with our nations wealth.

Eventually they will lose too many times and destroy everything they are playing with. I know this because the Universe is taking the other side of these bets and it has deeper pockeets than even the Fed.

Mon, 02/04/2013 - 16:23 | 3214228 yrbmegr
yrbmegr's picture

Actually, it's about Europe.  Dude.

Mon, 02/04/2013 - 18:26 | 3214579 mkhs
mkhs's picture

Some primary dealer banks are European.



How The Fed's Latest QE Is Just Another European Bailout


Mon, 02/04/2013 - 12:11 | 3213436 falak pema
falak pema's picture

its not just their religion, its Pax americana religion. The analysis on the other side of the pond, where ponzi reserve is king, is just as precipitous. Nigel Porridge can only swear in English about the Euro clowns...that's precisely his limitation, like all those City bums around Cameron.

Don't go blowing your horn about eurozone without including the overall picture of Oligarchy cabal around king $.

Just imagine if a tiny pebble like Greece or even Cyprus sends shivers down the spine of global incestuous bankers, drowning in debt and unknown CDS spider's web. It jerks the CB printers to spew 24/7, what would that world be like if the big boys suddenly said "I'm leaving the banksta table! "...??

All in one boat; and its controlled by king FED of uber $ reserve. Capo di Capo.

Mon, 02/04/2013 - 10:09 | 3213039 Grand Supercycle
Grand Supercycle's picture

Get Ready Bears...

Wile E. Coyote overdue sell off awaits as SPX daily & weekly charts continue their protracted topping process from current
extreme levels.

Mon, 02/04/2013 - 10:13 | 3213050 fonzannoon
fonzannoon's picture

Whatever. Look at them calmly steer those futures back. Even knocking gold down a few bucks at the same time. Wile E. Coyote can walk on water. Please disburse. Nothing to see here.

Mon, 02/04/2013 - 10:15 | 3213056 GetZeeGold
GetZeeGold's picture



Don't fight the Printer.

Mon, 02/04/2013 - 10:32 | 3213119 unrulian
unrulian's picture

what i have learned from the 12-15 printers that i have owned since they became feasible to own personally is that they work fine until that day that they don't...i could never predict when it happened, it's always at the worst possible time....i have also learned i have to have physical pen...just in case

Mon, 02/04/2013 - 10:16 | 3213060 TotalCarp
TotalCarp's picture

Amen brother.. I believe it when i see it. Tbh "they" have been pretty efficient at letting some steam out and using that as an excuse to print more so perhaps this time will be upon us again soon.

Mon, 02/04/2013 - 10:17 | 3213064 Whiteshadowmovement
Whiteshadowmovement's picture

Lol, even the euros nudging back up. Just about 12 minutes by my count till it gets ramrodded back over $1.36


Mon, 02/04/2013 - 10:22 | 3213082 unplugged
unplugged's picture

there is no sell-off that a money printer can't fix - don't hold your breath

Mon, 02/04/2013 - 10:37 | 3213137 forwardho
forwardho's picture

Brilliant! With unlimited creation...

Mon, 02/04/2013 - 11:27 | 3213312 eclectic syncretist
eclectic syncretist's picture

The RSI on the SPY has been over 80 nine of the past 11 trading days, and over 75 for 11 consecutive days.  Historically speaking, by this metric the market is about as overbought as it ever has been.  Some of this money appears to have come out of bonds, but could some be one the run out of Europe?

Mon, 02/04/2013 - 10:11 | 3213044 thismarketisrigged
thismarketisrigged's picture

looks like bernankes printer maybe broken today. i see the futures are down modestly, i hope bernankes printer is unfixable

Mon, 02/04/2013 - 10:12 | 3213045 bonzo112358
bonzo112358's picture

This can't be right.  I've heard on CNBC (yes I still watch from time to time to remind me of why I stopped) that Europe has stabilized.

Mon, 02/04/2013 - 10:14 | 3213054 Dr. Engali
Dr. Engali's picture

Europe's turn in the great blame game...U.S politicians :we had it all fixed until  Europe slowed down.  Then when it's our turn the Europeans can say the same thing ...we had it all fixed until those damn Americans.....print rinse and repeat.

Mon, 02/04/2013 - 10:15 | 3213057 thismarketisrigged
thismarketisrigged's picture

i hope we fall 300 plus pts on the dow today and 30 plus on the s&p. i know its wishful thinking but i pray we do, and with europe looking unstable( not that they ever stabalized, but at least the fools maybe realizing it again) what better day to do so.

Mon, 02/04/2013 - 10:17 | 3213063 Jason T
Jason T's picture

that CAC has got to be a short.. France is swimming up the creek without a paddle

Mon, 02/04/2013 - 10:35 | 3213131 forwardho
forwardho's picture

In a canoe with a big ass hole in it.


Mon, 02/04/2013 - 10:58 | 3213201 Orly
Orly's picture

You mean Hollande?

Mon, 02/04/2013 - 10:20 | 3213073 monopoly
monopoly's picture

I too, turn on the idiot channel for about 45 minutes prior to market open. Always reinforces why it is off for the entire trading day. Gotta give the idiots some credit, they all know how to read a teleprompter.  But can anyone here actually listen to Kramers idiotic voice at 6 on the West Coast or 9 on the East Coast. It is amazing to me he is still a free man walking the streets. But then again, they are all free, every fucking banker that destroyed our economy is free. Sickening.

Mon, 02/04/2013 - 10:24 | 3213091 katwoman
katwoman's picture

There is a wonderful button called MUTE that you can put on about 97% of the time whilst watching Cnbc.  Art, Santelli, the data releases is about all that's worth listening to.

Mon, 02/04/2013 - 10:21 | 3213078 unplugged
unplugged's picture

"we hit the limit on reality amid Italian bank fraud, Spanish political fraud, referenda votes, and macro- and micro- fundamentals snapping"

no problem - just fire up the money printer - done - nap time

Mon, 02/04/2013 - 10:36 | 3213134 Temporalist
Temporalist's picture

They must be listening to you:

Berlusconi’s $5.4 Billion Giveaway Vow Draws Monti’s Scorn

"Silvio Berlusconi’s campaign promise to give Italian taxpayers a cash rebate of 4 billion euros ($5.4 billion) was criticized by Prime Minister Mario Monti as an attempt to buy votes."

Mon, 02/04/2013 - 10:23 | 3213083 bullmkt
bullmkt's picture

i thin Durden will cum today.But wait,he only ejaculates when the market is more than 1% so maybe its premature.

Yeah,hes been bearish for 5 yrs now.Moment of glory.Dow "plunges" 60 or so points. "Bloodbath" "Decoupling" "Risk-off".

Does not remember that on Dec 28 th he ejaculated when the mkt sold off into the close.This time,he might be able to "call the top" after about two years of being stopped out of his 1-2 lot short trades.

Mon, 02/04/2013 - 10:35 | 3213132 IridiumRebel
IridiumRebel's picture

We may be "at the top' or maybe a little ways more to go, but this market is fueled by crack. THERE ARE NO FUNDAMENTALS. The reckoning will come and it will hurt. 


Mon, 02/04/2013 - 10:24 | 3213090 yogibear
yogibear's picture

Smoke and mirrors. Bernanke and the Fed want to print out of debt, kill the US dollar.

The US will create the biggest fireworks once a currency crisis occurs. The effects of a US currency collapse will be worldwide. Bernanke and the Fed are just making the problem that much bigger rather than forcing the senate and congress to live within their means. 

Mon, 02/04/2013 - 10:27 | 3213099 Sudden Debt
Sudden Debt's picture



ps: seriously... they are the worst since a decade...

Mon, 02/04/2013 - 10:33 | 3213125 Whiteshadowmovement
Whiteshadowmovement's picture

Guys wanna see something funny, check out the bid/ask spreads on RGR, theyre so far apart the stock is barely even moving, just 700 shares in the first few mins!

Mon, 02/04/2013 - 10:51 | 3213173 Fuh Querada
Fuh Querada's picture

No coincidence that VIX in German means masturbation!

Mon, 02/04/2013 - 10:52 | 3213177 NEOSERF
NEOSERF's picture

Plunge, sponge...just setting up for the next gigantic upmove...expect positive comments about delaying sequestration in the next 48 hours setting up a move towards all time highs...THIS is how the game is played.

Mon, 02/04/2013 - 10:52 | 3213178 Caracalla
Caracalla's picture

Sell into any rallies.  Let's crash this mother****** !!

Mon, 02/04/2013 - 10:57 | 3213192 Whiteshadowmovement
Whiteshadowmovement's picture

Kevin is that you?

Mon, 02/04/2013 - 11:04 | 3213224 Lewshine
Lewshine's picture

We've seen the lows in today's equity markets - For no good reason, trade long or be the idiot for the 10,000th time!

Mon, 02/04/2013 - 11:13 | 3213254 jbvtme
jbvtme's picture

why do the euro/european stocks run in sinc and dollar/us stocks run opposite?

Mon, 02/04/2013 - 11:20 | 3213285 Orly
Orly's picture


As the stock market goes up, people move their money out of bonds and US Dollars and into stocks.

As the Euro goes up, people have more confidence in the integrity of the financial system, so they buy more stocks.


Mon, 02/04/2013 - 11:37 | 3213336 lakecity55
lakecity55's picture

But, TPTB can pull the rug at any moment. I think your're right, but it's too rigged for my taste, except for miners.

I have been thinking about oil and NG stocks, though...

Mon, 02/04/2013 - 11:55 | 3213385 falak pema
falak pema's picture

there is a big discrepancy ongoing since 2008 days between Dax and say Cac40; Footse is closer to Dax. 

Of course that is normal, if the unknowns of german banking were not so fragile... Today Cac40 is at 65% of 2007 high (6500), Dax is more like 97% (8100).

Cac's historic low was around 2300, Dax's low was around 3500 (from memory) in 2009. 

Mon, 02/04/2013 - 11:23 | 3213296 Alpacanio
Alpacanio's picture

Spring's coming. Most of Europe will look like the summer of 1945 before the end of 2013.

Mon, 02/04/2013 - 11:42 | 3213358 thismarketisrigged
thismarketisrigged's picture

this sell off is long overdue. 


if the fed stopped printing and let the market run its own, this market would be 50 percent lower than it is at least.


get the fuck out fed, all u do is inflate stock prices, u dont help with shit for the real economy. we will only grow without u guys.


the sooner u get out, the sooner we recover

Mon, 02/04/2013 - 12:10 | 3213435 omi
omi's picture

Legend is cut off a little. What is the spread to? It says normalized to the last day

On more broad topic. Is it me or you literally can't lose money if you borrow in EUR and buy crappy bonds of TBTF countries (Italy Spain France Portugal) (yes I added F to PIIGS)

If EUR becomes bunk, so is your debt. Next worst case is you get paid interest while the market value of the bond plunges. They funny thing is that ECB is trying to be more prudent than FED and JCB, yet they are constantly made fun of for not monetizing all the debts. In reality, there's not much different between unpayable liabilities of USA and those of Spain, Portugal; it just seems that USA is more balls out about it "we're going to pay it off, no matter the cost, here's how we'll do it...." So far FED has been extremely successful in putting a ceiling on the long interest rates, and I would expect ECB to follow in larger volumes of transactions to put a ceiling on the interest rates by systematically buying FPIIGS debts. 

Yes, yes, I remember MF Global with Italy bonds. So I guess the lesson is borrow extra money for the collateral call

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