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Spain And Portugal Dump But European Day Saved By US Pump
European equity, credit, and sovereign bond markets all started their day with a jolt. Smashing down to multi-week lows following the FX market (and US futures) implied opens. The reflexive buying began almost immediately but was slow and steady - leaving Spain and Portugal out in the cold still (+32 and 21bps respectively in the last 3 days - the biggest 3-day jump in 4 montsh). Spanish and Italian equity markets trod water near their lows through the European session but once the US opened in its magical way, they rallied 1.5% off the day's lows! EURUSD also rallied back - aided by POMO but didn't close the gap unlike US equities. European financials suffered most - as expected - but even they bounced back off earlier lows - though credit is still shouting loudly that stocks have it all wrong. Away from the mainstream manipulated measures of how awesome a 10% deposit haircutis, Swiss 2Y was in demand all day - trading as lows as 0.003% on safe-haven demand and the 3month EUR-USD basis swap (indicator of bank stress) tumbled its most in 6 weeks.
Notice the mysterious US session ramps...
But European financial credit remains far less impressed...
So given that markets know all and they have recovered almost all their losses - then why arent Cypriot banks open normally for business? Seems like credit markets think this is a bigger deal than good ol' equities for now..
Charts: Bloomberg
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Chart porn!
looking for a great groupon rate to cyprus. I hear its lovely this time of year.
This is a Bear Sterns moment, not a Lehman moment. Someone will take over the banks in Cyprus, be it Gazprom or the Cypriot state, otherwise they will collapse instantaneously upon reopening.
Spain/Italy are the Lehman moment, and Italy is close to folding, no government, economy in the crapper. I would also keep a close eye on Eastern Europe, interesting things here as well.
As I said before, even if we gold-down-on-the-bottom-of-the-lake-bugs dont like it, the dollar is the last standing FIAT currency. If you don`t believe me run and buy some rubles, ukrainian hrivnya, hungarian forints or some GBP.
However, in any scenario, when the fiat regimes around the world will see how they are crumbling they will try to bring down the dollar as well and that means war.
I TOLD ya'll futha mucka's that only a war will solve this EU troubles. Megalomaniacs need their money they never had to get power. Libido Dominandi: the lustful desire for power.
Irelevant
While we wait on Lehmans and Bears, I am pleased to see that there was no manipulation going on...
I agree that the "next horserace" is between Spain and Italy.
I still think this is a huge false flag. They need a scape goat, a rocky island in the middle of the sea might just do. Now, lets recap, the President of Cyprus issues a statement telling his people literally that the banks are INSOLVENT and were going to fail ANYWAY! So they "agreed" upon a levy of up to 9.9% of deposits to rescue said insolvent banks (you can`t fucking make this up). After this news all access to deposits IS DENIED, banks are closed down for 3 days! After this news people are told that the "levy" (wink-wink) was not such a good idea and maybe they will scrap the levy on deposits under 100.000 Euros and go for 16% on 500k and above.
Now, they could have summed it up as: Our banks are in the crapper, run fast and take any money you can get because there ain`t much left.
There are at least 100$ billion black Russian mob money in these banks. Those $100 billion + all other funds in Cyrpus banks will be on the move the first day they open the banks! They are finished in the first 10 minutes of business. The banks invested all this money in Greek bonds remember?!
So there is no doubt in my mind this was premeditated, because otherwise its so powerful stupid it will make history.
As we are speaking, all the banks in Cyprus are DEAD! They will not open at all, or, if they open, you will only get a franction of your deposit, lines will be huge, internat banking will not be working. Remember, there is a huge amount of black money in Cyprus, all that money will run in the first minute of business. They wanted this to happen, they wanted to create panic, I have no clue why.
Because they have the solution to the panic. The solution is the ECB turns on the printing press, and once they do, they won't turn it off.
What you are saying is that they will go in 8th gear? This is Europe remember, you don`t need to tell the people what you - the central bank - are doing. They are printing like crazy for years. So this is not about printing, its something else. Cyprus is a major hub for European bank transfers, all BMW sales for example to some Eastern European countries are done via Cyprus front companies. They are fucking it up for a lot of people, not only russians. Its not that they are scared about the levy, once the levy was made public ALL WAS DOOMED! Why didn`t they take the 10% and announce it post factum? There, you have 10% less, now go fuck yourself. Why would you do it before? To create panic!?
I don't understand this either. There has to be something bigger behind this. Either the Russian connection. Or this is just simply a trial balloon to see how far they can push the masses before they revolt. So you are right... cause panic to see how much panic. It's essentially GM raped bond holders on a bigger scale. Get away with it, and the next one will be bigger, and so on.
Fear not. Cntrl-P and the banks are solvent once again!
.
PPPRRRRIINNNNTTTTTT!!!!!!!!!!!!!!!!!!!!!!!!!!!
BEN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
just another day in the neighborhood, what cyprus problem? dow only down 20 soon to be in the green
It's all good - all news is bullish for stocks and bad for metals. The Fed's and the TBTF banks backstopped by the Governments cannot be stopped - they can control gravity and the time space continium - all you hoping for a black swan (i.e Cyprus) can keep on dreaming - won't happen they cannot be stopped - this is the new normal, there is no inflation ... wake me up when someone wearing a suit and tie anywhere in the West gets shot or hung - until then its triple bullish ETF's all the way and shorting gold - ....
Treasuries have risen by more than the DJIA has fallen.
*high fives on the NY Fed trading desk*
Good vid from Schiff
http://www.europac.net/media/video_blog
One other thing I'm thiking.
If europeans are raiding accounts in order to pay for CDS losses of hyper leveraged euro banks, that would mean that the Fed will NOT provide that money any longer via swaps, hence the Fed has said no to more QE or the Fed will tapper off QE.
I'm expecting Wednesday some QE related news about halting it or tappering off.
remember that any cb swap is just a temporary thing, it's a "let's exchange this for that until date X". your thinking is sound, but which european banking system? the British? the German? the Spanish? they have different exposures to nearly everything
Not the british, they have separate swap agreement with the fed I think.
I am talking about eurosystem - no country excluded.
Those banks are hyperleveraged. Probably Germany is trying to raid people's money and russian's money to save Deutsche before the elections.
Ekm I think it is possibe you may have it backwards. I pulled this from the JPM article above..
"This would likely mean the ECB would have to increase its presence as liquidity provider of last resort"
Germany had to cause a bank run to give them cover to let Mario twist their arm to start printing along with everyone else.
Just my 2 cents, but this is all about more printing, not less.
We'll see.
How many times have CBs extended emergency swap agreements since 2008? Once Japan really goes belly up, swap volumes are going to spike. Individual swaps are temporary instruments, the idea of backdoor bailouts via swaps is more and more looking like a permanent instrument.
Correct until...................brent vigilantes intervene.
Which has been happening for quite a long time already.
Economy is in pure depression.
I wouldn't hold my breath waiting for the Japs to go belly up. They are savers, and we are debters. You might want to investigate the difference between the two. They will keep the price of refined oil high for the next year due to electrical needs. But once they get back on nuclear, it's back on the growth band wagon, at the cost of other country's.
Demographics are literally going to kill Japan. There's no escaping.
REMINDER: dont forget that these EU banks all drank the Made in America Kool Aid, aka CDS toxic shit that Goldman Sachs & Friends conned them into.
While everyone was nicely distracted with the Bush Wars, the housing bubble and CDS was going on -- thanks to the GOP-sponsored (Phil Gram) repeal if the Glass-Steagall act -- the EU banks were buying this shit. Even many a Russian entrepreneur and gangsta was buying.
America is ONE GALACTIC PONZI. And its citizens and those in Europe have to pay for it -- assuming they decide to actually pay this Ponzi. I wouldn't if I were them. I know I don't intend to get stuck with the tab; I have and will continue to take lawful actions while there is time and they are still legal.
The Farce Must GO ON !!! Unleash the HFT Fallopian Vacuum Tubes....
http://wallstreetfool.com/2013/03/18/the-farce-must-go-on-vacuum-tubes-s...
Easiest, most predictable BTFD ever. A total freebie for those Cypriot despositors with enough cash left to buy a few e-minis.
"...then why arent Cypriot banks open normally for business?"
Well, it IS a bank holiday...
DavidC
NASDAQ100 was in the black about 30 minutes ago.
This is really fucked.
Let's see what Q1 brings us.
USA ! USA ! USA !
Remember the old Jesse Livermore story about when he was short 5,000 shares of Union Pacific on a hunch during a raging bull market and the 1906 earthquake hit. The bull market didn't instantly turn, but took several days before the reality of the situation became clear to those with diamonds in their eyes. So may it be with the ramifications of this incident.
http://www.zealllc.com/2004/jesse07.htm
chapter VI
That's it, i'm shorting German RE /sarc
May The Farce Be With You...
Schiff...Cyfrus ???????????can't even get the name right LOL
LOL, love the guy.
The world is a fucking weird place.
apparently the FED understands the Merkel Draghi put in action on Cyprus better than ZH : move on the markets have already digested that!
Making the tax haven wealth of people, stashed in fiscal paradises accessible to EU fiscal authorities as to US tax authorities, was top on agenda of the Euro agenda in 2009 London meeting presided by G Brown. And it led to a mouse that squeeked like mickey : I love ya wall street and city!
With bravery of that calibre we got what we deserved from Greece to jolly Ireland in piglet squirms.
Now the Eurozone is running fast out of poker chips and has to think seriously of pulling in hot money fast and furious; Mutti has an election coming up and she wants to play Czarina Katarina Merkel of Eurozone from Brest to Moscow!
Tyler, EUR$ can still close the gap today, though we did momentarily hit 1.3.
Just have to find the morons to BTFD & hold it at 1.3033 till 23:59 GMT.
Following Greenspan's logic, this retracement should cause depositors receive almost all their money back.
Nice long bank holiday coming up in Spain and Italy in the next couple of weeks. Only 9 withdrawal days until Easter.
How do European "bank holidays" compare with U.S. versions, I wonder ? Could it be that everybody gets a full day off, plus a free toaster ?
!
This market is a complete and total joke. The Cyprus depositor haircut is a big deal because of the broader implications that it has for the EU. I told my wife last night when S&P futures were down 20+ points that the market would probably finish flat or slightly down. Even putting Cyprus aside for a moment, normal functioning markets have something called profit taking. I can't believe that more people don't question the invisible hand supporting the market. At least if someone with real world experience outside of academia was put in charge of all this, they would stage a couple of sell-offs to at least make the rally believable.
"This market is a complete and total joke."
You can just see all these guys in Brussels and New York looking at the markets and saying, "well boys, I guess we CAN get with this!"
I spent most of the weekend convinced that this story would (sadly) prove to be a big nothing-burger. The depositors at MF-Global and it's competitors are a much more financially literate set than the typical deposit account holder, and yet they bent over and took their shafting and the commodities markets keep right on trading.
Similar logic applies to the stock market, post flash crash and the bond market post GM bankruptcy. That part of your brain that makes you see the principle involved is not something most people have.
We have many a mile to go on our strange journey.
EUR, YEN, GBP, et al are gathering under the dollar like little penguins. They are forming a foundation that will lead the dollar higher. This is organic dollar strength that I believe will play against stocks and bonds. This money will likely move into sectors that were previously untouched by dollars - namely those sectors that have been ignored by Wall Street. Stocks have long been out of style but due to Fed easing and "patriotic bullishness" have been levitated. But stock owners will callously read the writing on the wall and move to the much more interesting dollar not wanting to be the patsy in another market bubble.... sorry stocks, we just don't love you anymore
no real market would shrug of a death rattle as seen in Cyprus. What banking system can stand when it promises only to steal depositors money?
Thank you Benny for making it impossible for any market to tank. Is this what Heaven's like?
Just BTFD with your useless fiat and life will be good.
I watched the gold-price today, throughout eu-session only some minor dip but interestingly stable. It didn't really move alongside stocks or bonds and reacted just slightly on Barclays 'get out of gold' call. As stocks consolidated I've had the expectation of a drop, but nada.
the "buy the dip" crowd is having a field day ... it's 2007 all over again.