European Peripheral Bond Spreads Surge As Germany Suffers Worst 2-Week Run Since 2011

Tyler Durden's picture




 

GDP-weighted average sovereign risk for European nations has risen 14% in the last 2 weeks - the most since Nov 2012. European peripheral bond spreads finally started to 'adjust' for real risk this week with a dramatic 30-40bps decompression from the early week's tights to the closing wides. Portugal was worst (+23bps on the week) followed by Italy and Spain. Stocks were hammered - EuroStoxx 600 2-week drop is the biggest since May 2012 and Germany's DAX 2-week drop is largest since Nov 2011.

 

EuroStoxx...

 

Germany ugly...

 

But all European equity indices weak...

 

As peripheral bonds spreads surge...

 

Charts: Bloomberg

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Fri, 08/08/2014 - 11:56 | 5065548 Dr. Engali
Dr. Engali's picture

10% controlled pullback on the DAX. Just what the QE central planners ordered. BTFD.

Fri, 08/08/2014 - 11:58 | 5065555 fonzannoon
fonzannoon's picture

Look how they nudged it over 9k at the close

https://www.youtube.com/watch?v=m5TwT69i1lU

Fri, 08/08/2014 - 12:43 | 5065806 walküre
walküre's picture

All the German sheep have been told to buy stocks for months now. There's been real money lost and German gamblers got burned. Is the slaughter over?

Fri, 08/08/2014 - 13:57 | 5066358 Dr. Engali
Dr. Engali's picture

First of al, it's not real money, and secondly you don't lose if you don't sell.

Fri, 08/08/2014 - 12:01 | 5065557 Temporalist
Temporalist's picture

This has to be some kind of metaphor...I wonder what...nahhhh...

 

Google Street View Car In Wrong-Way Crash

http://www.thesmokinggun.com/documents/Google-Street-View-car-crash-612345

"AUGUST 7--A Google Street View car that was traveling in the wrong direction on a one-way street crashed into another vehicle last night as it attempted to make a U-turn, Arkansas police report."

 

The only way it would be more ironic is if it had no driver.

Fri, 08/08/2014 - 12:02 | 5065567 ebworthen
ebworthen's picture

Cue Draghi making a "Whatever it takes" comment.

If this keeps up (reality) cue Janet talking dovish, and Japan going to 300% debt/GDP.

The Keynesian camp debt delusion has taken hold; they will grind this down to the nubbins.

Sanity be damned.

Fri, 08/08/2014 - 12:04 | 5065576 Ness.
Ness.'s picture

And yet equities take another leg higher.  Too funny.

 

BTFD.  

Fri, 08/08/2014 - 12:06 | 5065591 Winston Churchill
Winston Churchill's picture

Costs, and fuck the EU.

With the nuke threat hanging over their heads, they just plead for more, and moarer.

Fri, 08/08/2014 - 12:09 | 5065592 Jack Sheet
Jack Sheet's picture

The DAX was pumped up by the Japanese central bank like an obese Oyabun on top of a Geisha, amongst other central banks who reportedly bought 29 trillion $ worth of equities (so in reality much more) and participants in the EUR/JPY carry trade. Now the viagra has worn off but doubtless another intravenous infusion will be forthcoming.

edit
BTFD in German: kauft den fickenden Rueckschlag.

Fri, 08/08/2014 - 12:11 | 5065608 JustObserving
JustObserving's picture

As if there is any chance that any of the peripheral European states can ever pay back their long term bonds.

And the US is in the worst shape of them all with unfunded liabilities of $244 trillion and rising at $11 trillion a year per Kotlikoff.

Not to worry, the Nobel Prize Winner has an excellent solution for that. It's called the audacity of hope.

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