European Bank Bonds Plunge To 5-Month Lows

Tyler Durden's picture

Close-to-close, headlines will be happy that things do not appear to be collapsing in Europe. The broadest equity indices only lost a fraction of a percent and bonds ended unchanged. But the action in the last hour or two (which saw Spanish and Italian bonds weaken considerably) and the relentless leak lower in Italian and Spanish stocks (now down 4.5 and 3.5% on the week respectively) suggest risk-appetite is fading fast. German and Swiss 2Y rates are negative once again as safety is chased and EUR-USD basis swaps are holding their lows. EURUSD tried to rally but failed and ended at the lows of the session as European banking credit markets continued to weaken - now at 5-month wide spreads (and their stocks still playing catch down).





Charts: Bloomberg

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Fidel Sarcastro's picture

No worries, Chairman MaoNanke will help them.

Ghordius's picture

yeah, sure, the swaps. another good story for propaganda

meanwhile I remember the times when everybody was just trying to understand what Greenspan mumbled

now analysts are digging down to 17 european finance ministers nobody previously ever listened to

JPM Hater001's picture

"MOAR!" the beast bellowed.

disabledvet's picture

Sounds more like "LESS is MOAR!" to me.

Groundhog Day's picture

Let's go Yankees...clap, clap....clap clap clap

I mean

Let's go Bank run..Clap clap...clap clap clap

Its Only Rock N Roll's picture

And then the Knickerbocker Trust failed...and it was all over.

TeamDepends's picture

That is good news!  You were talking to us, right?

Schmuck Raker's picture

Cyprus is very definitely an ex-canary.

Winston Churchill's picture

Dead canary , just dropped off the perch.

Dave Thomas's picture

This canary is no more. It has ceased to be. It's expired and gone to meet its maker. This is a late canary. It's a stiff. Bereft of life, it rests in peace. If you hadn't nailed it to the perch, it would be pushing up the daisies. It's rung down the curtain and joined the choir invisible. This is an ex-canary.

ParkAveFlasher's picture

Euro's getting mighty scarce, fellas.

Ghordius's picture

hard money is scarce, soft money is plentiful, and bad money drives good money under the mattress

ParkAveFlasher's picture

The scenario I'm tossing around is this.  Key assumption is that Ben prints but the Euro committees do not:

1) Big depositors in Euro zone go into hiding.  Euros go under mattresses, into hoards, out of circulation.  Euro scarcer, therefore stronger.  Demand is inertial.

2) Some big depositors exchange to dollars, because Ben would never bail in.  Ben is your friend.  Euros are exchanged, handed in, and return home. If they are not recirculated, Euro scarcer, therefore stronger. Demand for it is still inertial.

3) US economy keeps jackknifing left-to-right, Ben hits the gas.  All that converted wealth becomes diluted by sudden dollar weakness.  Now the big depositor would be doubly screwed to reconvert back to the Euro which the big depositor was a party to making strong on that initial conversion.  Euro still scarce, therefore stronger. Demand for it accelerates.

4) What we are looking at is a rotating pan-Atlantic di-polarity savings trap. There is certainly collusion between banks in the US and Europe. Bernanke sucks, Brussels blows.  Or vice versa, depending on conditions.  Whatever configuration necessitates the earner/saver at the fulcrum of their teeter-totter is what will be.  It's really very simple, just massive in scale and elaborate up close.


Ghordius's picture

you had me at "Ben is your friend" ;-)


dtwn's picture

What about the Yen?  3-way clusterfuck teeter-totter?  When Japan starts having issues I think there'll be knee-jerk flight to the dollar, keeping it up till we crash and burn.

thisandthat's picture

1) Anyone smart enough to hide money, probably is smart enough to convert them into something else, although I know of people thinking of transferring their money to Spain for safety (oh yes, trust me, it's true).

2) Deposit insurance/non-insurance has nothing to do with currency, but banks: if the bank is European it falls under Eu legislation, regardless of deposit denomination.

monopoly's picture

I could not be more comfortable with my holdings. Yes, way down from the highs, but this too shall pass. My God what a Tsunami in the making. Hang tight all, hang tight.

steve from virginia's picture



Remember, Bear-Stearns unraveled six months before Lehman blew up.


The mortgage business had begun to unravel over a year before that.


It's early ...

ParkAveFlasher's picture

You can never overstate how far ahead of the curve ZH keeps us informed, and enhanced by the discussion and comments.

edit: Junker, is that you Paul Krugman?

machineh's picture

PANICOS speaks: 

FRANKFURT (MarketWatch) -- Cyprus authorities are making a "superhuman" effort to ensure the country's banks reopen on Thursday, Cyprus central bank chief Panicos Demetriades said Tuesday, according to news reports.

Classic delusion of tax feeders -- that they are doing a 'superhuman' job, solving problems they FUCKING CAUSED.

firstdivision's picture

Anyone have any suceess on having their recent gold/silver orders filled?

adr's picture

SO all of this and the US stock markets are still trading up??!!?!

Oil is up, nat gas is back above $3.90.

So the flight to safety is the mother of all BS economics, THE UNITED STATES?????


I've seen absolute stupid, I've had to converse with idiots, I've sat in a meeting room where pulling a gun out and shooting myself would be the most productive use of my time.

All of 2013 so far takes the cake. You couldn't make up a story that could come close to the reality we are witnessing on a daily basis. It doesn't matter what happens to employment, the common man's bank account, freedom, etc. The only thing that matters is that stock indicator showing a green up arrow.

The wizard is sitting behind the curtain laughing his fucking ass off.


fonzannoon's picture

Hey just to toss this out there, I had breakfast at one of the country's largest chain restaurants this am. While at the counter I saw a sign that said "no bills larger than $20". That threw me off. I asked them why and they said they had been getting counterfeit bills.  It occured to me that I have been seeing that sign a lot lately but to see it at a Nationwide retailer really shocked me.

If major vendors start shunning large bills we are either going red money or digital sooner than anyone thinks. They are going to flush that cash out into the economy.

eclectic syncretist's picture

Damn you Bernanke, you stupid motherfucker, print faster!  We're gonna need that conterfeit if we're ever gonna open up those banks again, you low-life, sociopathic, pathetic excuse for a counterfeiter, dickhead fuckface asshole.

Mordenkainen's picture

Come on, say it like you really mean it.

Yen Cross's picture

                                    U.S. Equity markets up ?

                                    Oil/cl up ?

                                    Food and comodity prices ex, gold and silver up ?

                                     U.S.$ up ?   It's all good in Bernankistan.

Quinvarius's picture

Good if you are stacking.  The Fed thinks they are managing the situation with gold prices.  LOL.  Gold is 20% cheaper here than it was at the bottom of the market in 2008 vs money supply.  It is going to explode.  All the Fed has to do is be late for work 1 day.

firstdivision's picture

Good to know the Russians are moving their moneis here to the US.

max2205's picture

Do not adjust your dial, you've just entered the twilight Zone