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Above 7% Again - Any Italian Bank That Bought BTPs With LTRO Cash Is Now Underwater
Presented with little comment...10Y BTP yields just broke above 7% once again. It would appear the MtM on those LTRO-funded BTP purchases is hurting already. Cue LCH margin hikes...
Today's move above...and the week below - 60bps off the pre-LTRO (green box) low yields from Wednesday...
Chart: Bloomberg
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The snake is now eating its tail.
Delicious. We need a Michel Platini-esque can kick in Europe, none of this wimpy "foot nudging".
The snake is now eating its own SHIT ...
not eating , just destilating :)
The global centipede?
Can't they do that trick where they issue debt and buy their own debt at the low, low, price of 1% like we do in the United States? WTF! I thought the wizard was real.
CT just lowered electric rates by 7%. Straight up deflation.
That's amazing. Guess it's better to lower rates and increase the rate of customers who actually pay.
OT: Looks like thinkorswim just crashed (again)
OT:
http://maxkeiser.com/2011/12/23/war-woe-suicide-kills-more-us-soldiers-than-combat-and-the-military-keeps-the-death-benefit-on-the-insurance/
Suicide should never result in huge cash payments. It will distort peoples' thinking and result in more suicides at the margin.
The bank & ECB buy phase has not yet begun in earnest.
Orders to march being issued shortly.
Can yet will be kicked one more time.
Always just 1 more time...
I think we've discovered a Lucy with the football moment.
There is no buyer ... absolutely none ... expecting massive creditors withdrawal soon from all the 523 banks ... all the LTRO monies are meant for fire fighting ....
It does have that "battening down the hatches" feel, doesn't it?
Chinese coming to the rescue in 3,2,.......opps it's done.
On a more serious note, someone should add up all the additional liabilites Italy is taking on, with the ESFS, ESM and IMF rescue funds. Not only paid in capital, but guarantees.
The christmas eve version of "fun with numbers".
Actually, courtesy of START2, someone should add up the liabilities the Bundesbank is taking on, by funding Italian shortfalls via an ECB intermediary. Something tells us our German readers would be delighted to learn that Italy is now a $1 trillion sink hole for their economy and rising.
I can hear the tanks being fired up already. The "Christmas miracle" is gonna be "we made it to New Years."
Lebensraum Tuscany?
Sorry Merkel, there's nothing in Tuscany...
http://www.youtube.com/watch?v=EPkmLWOqwwA
they woulda known daze ago if they were fringe blogging after tobogganing
no german taxpayer left (with a) behind
economic liposuction, BiChez!
jen & wolfgang's new: EU~(on a)~Rope
The germans aren't completely stupid. We shall see whether or not they make good on any of these claims. Though the nation isn't as closed and xenophobic as the racist jokes would make you think, hell would likely freeze over before the Germans agree, via referendum (no other way about it), to bail out yet another neighbour from the dreadful south.
Germany hasn't devoted themselves to anything. Strangely, I fing their firms and even some financial businesses the most adaptable in this environment. GB is another story...
Start2? Strategic Arms Reduction Treaty? You probably mean Target2.
It's pretty clear to me that these assholes in charge are making this as complicated as possible in order to confuse everyone. I don't think we will really know what they are up to until they finally pull the plug on this game. A case in point is the video that a few of us put up a couple of days ago. The video went through the various documents that were the foundation of the ESM agreement. The language in those documents is so completely ridiculous as to almost be unbelieveable. Brussels is going to print some amount of money and give it out to the EU countries but these countries have to agree to never question, never default, never sue, surrender taxing authority, grant complete immunity and several other unconscionable acts to get this money that is created out of thin air! Are you fucking kidding me? What the fuck makes the BIS so special that the shit they print in their basement should be worth anything more that what I can print in mine, or what Italy can print in theirs for that matter?
Some country needs to lob a tactical nuke into the lobby of the BIS and put that arrogant fucking institution right out of its misery, should probably follow up with some into the Rothschilds, Dupont, Lazard, Kuhn Leob and Warburg family estates as well!
"Some country needs to lob a tactical nuke into the lobby of the BIS and put that arrogant fucking institution right out of its misery, should probably follow up with some into the Rothschilds, Dupont, Lazard, Kuhn Leob and Warburg family estates as well!"
If you don't happen to have any spare tactical nukes laying around, a portable guillotine will do.
Not believing the lie makes you a radical and dangerous.
The Kool Aid kills slowly. What is one to do?
It's ok...Moodys says the USA is AAAAAAAAAAAAAAAAAAAAA++++++++++++++++
Our finances are rock solid.
yepper
We'll lease back the missile silos, if you get my drift.
What is this Yank obsession with seven percent. It was over 15 percent in 1992 and stayed above 10 until 1996 in Italy with EXACTLY SAME debt burden back then, 120 percent GDP
Yeah but the Italians owned the printing press back then.
Now - printing is verboten! Nein to printing! Reform! Work! Schnell, mach schnell!
LMFAO that's good!
To foreigners, a Yankee is an American. To Americans, a Yankee is a Northerner. To Northerners, a Yankee is an Easterner. To Easterners, a Yankee is a New Englander. To New Englanders, a Yankee is a Vermonter. And in Vermont, a Yankee is somebody who eats pie for breakfast.
Has the pie had a shower?
Apple pie if she washes, otherwise it is French pie :-) You would not want to go near greek pie.....
Oh lawds, is that some hair pie?!?
That is fairly accurate.
To us southerners a yankee is anybody above the mason dixon line.
To Southerners Yankee means more than just from where you are from. It is also an ignorant state of mind typically (not exclusively) found in people from the Northeast.
It's not the 7% figure per se that is important, it's the spread vs. the Bund.
They've come such a long way... LOL
The question to ask is c an the Italians (or any other sovereign) afford to continue financing at a particular rate. Personally I don't think Italy could even afford to continue its profligate lifestyle even if they were paying German rates.
The next part of the puzzle is if you are talking long term (5 years) or short term (next year). At 7% they are wards of the Germans in 2012 and forever more...at 2% they could hang on for a few more years.
We all know what the last official act of any (ANY) outgoing government (even the one at the world level) is by now, right?
Can I safely assume that?
Great. Now that we all know and can agree on what is taking place, my sanity will be easier to maintain.
Euro cost average?
Whistling past the graveyard...
"You see this in emerging markets all the time," said Eric Stein, portfolio manager at Eaton Vance, with $US177.8bn ($175.5bn) in assets under management. He said it was a case of elected officials "stuffing government paper down the banks' throat. The interconnection between banks and governments couldn't be stronger."
"If there should be a break-up of the eurozone, the last thing you want to be stuck with is non-(national) paper that goes bad," Mr Stein said.
http://www.theaustralian.com.au/business/markets/zero-risk-rating-on-ban...
"It would appear the MtM on those LTRO-funded BTP purchases is hurting already"
MtM! Ho! Ho! Very funny. As if anyone does any of that in these enlightened times.
XLF and IYR continue their fraudfest higher anyway.
This information only makes sense in an evironment that isn't being artificially and brutally jammed higher.
Its the gift that keeps giving and all in the spirit - which is why everybody will need a lot of spirits in the new year.
Somebody please loan me some money I can default on.
I'll even take fiat :)
"We cannot get out. We cannot get out. They have taken the periphery and French yield curves. Papandreou and Berlusconi and Sarkozy fell there bravely... the last balance sheet of the East has not materialized. The Squid has replaced them ALL. We cannot get out. The end comes soon. We hear default, default in the deep.
It is coming."
look. 7 percent is no big deal. trust me..........
Not if your a bankster. Trolls do not apply
My cousin Ed paid 8% to buy a new Chevy Vega in 1972. A new Chevy Vega in 1972 is pretty much the same quality of collateral as a promise from the Italian government is today.
Ed made good on the loan despite great personal sacrifice and anguish, so it can be done. The Italian population just has to "be like Ed" and make an austerity commitment equivalent to Ed's turning over 1/3 of his paycheck to the bank every week for the privelege of driving a Chevy Vega.
7% Moment; Berlusconian...we've been there once. Monti thinks he has the Royal Mounties and the US cavalry to outflank the Market, avoid 7% moment. Does he?? Will the FED do what it has to do to make this NOT come true?
As boomerangs always come home one day; to WS, where the Fiat Thatchery is.
Hey, leave the RCMP out of it! Flaherty said us Canadians ain't giving Europeans one centavo. And no, you canna borrow the Mounties either!
LTRO is a massive failure. They should be scared!
ECB And the $645 Billion LTRO – Opening The Floodgates Having Little Effect in Putting Out the EuroBond Fire
http://confoundedinterest.wordpress.com
7% might not be a magic number in itself - the real concern is all that empty space above it beyond the edges of the chart.
+1 - hilarious!
$644 Billion dollars found and dispersed just as quickly. Now I may be Old and silly but thats a lot of monopoly money that could be leverage.
Just one question....... where did they find the lazy half billion Euros. Under mattresses.
"Half trillion" Euros buddy. We have standards around ZH!
So do you really think italian banks bought 10 years BTPS with a 3 year repo deal? Why don't you look at shorter maturities (guess what...) where yields dropped (ie 2 years BTPS) from above 7% to current 5.16% or the 1 year BOTS from 5.95% to 4.07%?
Really don't know if this is just lack of knowledge or something else...