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America Awakes To Sea Of European Red As Hopium Hangover Hits

Tyler Durden's picture




 

If last week was Europe's days of hope, even as the continent was again breaking, predicated by the utterly ridiculous such as a successful Bill auction, a weak Spanish Bond issue, somehow spun by the propaganda crew as good despite pricing at an utterly unsustainable interest rate, and various German confidence indicators which soared to multi-year highs, today is the bitter hangover. Where to start...

First we got French and German PMIs which were nothing short of abysmal: the France Services PMI fell to 46.4, or in fresh contraction territory from March's 50.1, a 6-month low, even as the Manufacturing PMI remained virtually unchanged at 47.3 compared to 46.7 in March. All this of course adds insult to last night's Hollade victory injury for capital markets which certainly are not happy with the forthcoming change. But if France was ugly, Germany was downright abysmal with the composite PMI back down to 50.9 from 51.6 in March, dragged down by the Manufacturing PMI which hit a 33-month low of 46.3 (from 48.4 in March)! But, but, the Ifo and Zew... The end result- Eurozone April Manufacturing PMI slumped to 46 vs 48.1 Est. while the Services PMI dropped to 47.9 vs 49.3 est, with the Employment Index sliding to 48.3 fro 49.2 in Marc - the lowest since Feb 2010. In short, the quadruple dip didn't take long. But wait there's more: the Italian Consumer Confidence number printed at 89 the lowest since the series began in 1996, falling to 89.0 from a revised 96.3. Did we say falling, we meant imploding. But wait there's more. The Bank of Spain just announced that Spanish GDP fell 0.4% in Q1, confirming that the country has entered into a recession. But wait there's more. Eurostat just reported that Euro Zone govt debt-to-GDP ratio rose to a record 87.2% in 2011 from 2010's 85.3% revised from 85.4%; there was a silver lining - the deficit narrowed to 4.1% of GDP v 6.2%, yet exchanging record debt for a modest drop in deficits is hardly equitable. But wait there's more. As of minutes ago, the Dutch Cabinet and PM has formally offered its resignation to the queen, on the backdrop of this weekend's stunning news, which in turn means that the country's AAA rating is about to be slashed as first Citi and then the rating agencies warned, confirming that the contagion has spread not only to Spain and Italy (whose banks are about to be serially halted) but the core once again.

Yet while a lot of the above is noise, the big issue is that the European growth dynamo, Germany, has now definitively stalled.

End result: total bloodbath across all bond and equity markets as follows:

  • Spain 10 Years: +6.1 bps
  • Italy 10 Years: +8.9 bps
  • Netherlands 10 Years: +10.6 bps
  • France 10 Years: +3.1 bps
  • Netherlands CDS: +10 bps, at 129 and just shy of the all time wide of 136 bps. If the country is downgrade from AAA, which it will be shortly, that level will not hold.
  • Italian banks are about to start being halted down with Intesa and Unicredit as usual first, even as the FTSI MIB is now down 7.5% YTD. How long until the short selling ban is reinstated?
  • S&P 500 futures down 0.96% to 1362
  • Stoxx 600 down 1.79% to 253.17
  • US 10Yr yield down 3bps to 1.93%
  • German 10Yr yield down 4bps to 1.67%
  • MSCI Asia Pacific down 0.55% to 123.53
  • Gold spot down 0.57% to $1633.62/oz

Needless to say, US equity futures are exhibitingn a very peculiar shade of green.

Finally, as we will show shortly, Europe's daily bond auction calendar is once again the buyside's favorite topic. And this week will be both busy and ugly.

Perhaps it is time for yet another IMF panhandling crusade, which somehow makes a failure to get the needed $600 billion in guarantees, procuring only $430billion, into a success.

 

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Mon, 04/23/2012 - 06:37 | 2366147 Quintus
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Panhandling Bitchez!

Mon, 04/23/2012 - 06:40 | 2366152 slaughterer
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Bullish!

Mon, 04/23/2012 - 06:57 | 2366175 maxmad
maxmad's picture

collapse Bitchez!  Right on schedule!!

Mon, 04/23/2012 - 07:23 | 2366209 Sudden Debt
Sudden Debt's picture

I STARE AT GOATS!!

NOW WHAT DO YOU DO?!?!?!

Mon, 04/23/2012 - 07:39 | 2366247 Mentaliusanything
Mentaliusanything's picture

Goats are fine!

I'M shit scared of PIGS and Sudden Debt

Mon, 04/23/2012 - 08:05 | 2366281 GetZeeGold
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Crap...it's Monday morning...and I'm already hitting the Jack Daniels.

 

Mon, 04/23/2012 - 06:43 | 2366158 HedgeAccordingly
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THe GOLD print which set the ES move lower in motion - 

http://hedge.ly/Jz64Y5 

Mon, 04/23/2012 - 06:38 | 2366149 Auburn
Auburn's picture

short, short, short, short, short short SHORT!

Mon, 04/23/2012 - 08:06 | 2366284 GetZeeGold
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Going as fast as I can.....no need to yell.

 

Mon, 04/23/2012 - 06:41 | 2366150 navy62802
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Apparently, there was also a flash pop in USD-CHF overnight (20 Bil Euro trade at 90.00).

Mon, 04/23/2012 - 06:40 | 2366153 GerritB
GerritB's picture

LTRO 5 coming soon!!

Mon, 04/23/2012 - 06:45 | 2366160 navy62802
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Euro carpet bombing campaign to start soon, as well. Chairsatan Bernank has offered to lend his helicopter for the operation.

Mon, 04/23/2012 - 06:40 | 2366154 insanelysane
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Red is the new green as it triggers Ctrl-P.

Mon, 04/23/2012 - 07:10 | 2366188 Sudden Debt
Sudden Debt's picture

Trading Japanese Style Bitchez!

Mon, 04/23/2012 - 06:41 | 2366155 Peter K
Peter K's picture

But the EUR/USD is above 1.3150, therefore EUROLAND IS FIXED:0.

 

Mon, 04/23/2012 - 07:17 | 2366194 Sudden Debt
Sudden Debt's picture

Fixed, as in GOT IT'S BALLS CUT OFF WITHOUT ANASTESIA!!

BITE THIS LEATHER STRAP! IT'LL ONLY HURT FOR THE FIRST FEW YEARS!!

Mon, 04/23/2012 - 06:43 | 2366157 DutchDude
DutchDude's picture

Dutch politicians don't have the guts to pass austerity; instead they'll do tax hikes, VAT hikes further killing the economy... it's gonna get bad real soon!

Mon, 04/23/2012 - 07:06 | 2366183 AbelCatalyst
AbelCatalyst's picture

You could say the same thing about EVERY so-called developed country in the world - simply can't make the hard choices and zero leadership.

What's that out on the horizon? Looks like 30 years of chickens coming home to roost and they look really pissed!! Good luck everyone - it's been a good run!!

Mon, 04/23/2012 - 07:21 | 2366203 nowhereman
nowhereman's picture

How can you critcize them for going Iceland on the EU?

Mon, 04/23/2012 - 06:44 | 2366159 rebelscum1967
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too good to be true...we will be green at open talking AAPL earnings. :(

 

Mon, 04/23/2012 - 06:57 | 2366176 Boilermaker
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Buying opportunity of a lifetime...or some other shit.

Mon, 04/23/2012 - 07:19 | 2366201 Sudden Debt
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Sorry, this App is no longuer supported by the Itunes store.

Mon, 04/23/2012 - 08:10 | 2366296 Irish66
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you are funny this morning

Mon, 04/23/2012 - 06:46 | 2366164 Rubicon
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Tyler you forgot to mention Utd's draw against Everton.

Mon, 04/23/2012 - 07:18 | 2366197 nowhereman
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Yeah, It's like they want to give it away to Man City!

Mon, 04/23/2012 - 06:50 | 2366166 apberusdisvet
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And the spinmeisters will be out in force claiming that the USD is now the only legitimate safe haven.  But we know better, don't we.

 

 

Mon, 04/23/2012 - 06:56 | 2366174 Boilermaker
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We don't know anything.  Neither do they.  That's what makes it so fucking scary.

Mon, 04/23/2012 - 06:52 | 2366169 wandstrasse
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2+2=5 not because of room 101, but because nobody wants to hear 2+2=4.

Mon, 04/23/2012 - 06:53 | 2366170 GerritB
GerritB's picture

The Dutch are smart not to pass austerity, cut spending now will only make things worse. We need to reform and stimulate the economy. Just hope that labour party will win next elections...

Mon, 04/23/2012 - 06:54 | 2366171 Bag Of Meat
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Karma is a bitch, bitchez

Mon, 04/23/2012 - 06:55 | 2366172 Boilermaker
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There WILL BE a massive and magical pumping at around 11:30 EST and through the close.

How many times have been through this?

Mon, 04/23/2012 - 07:00 | 2366179 ZippyBananaPants
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Odds that Ron Paul tells the clowns on CNBC to stop licking Obama's nut sack?

I go 3-1

Mon, 04/23/2012 - 07:27 | 2366219 CrimsonAvenger
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If he uses those exact words I'll donate my entire stack to his campaign.

Mon, 04/23/2012 - 07:30 | 2366225 justinius1969
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yeah.. that phat phuk Liesman just looked destroyed..

 

Mon, 04/23/2012 - 08:28 | 2366340 GetZeeGold
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As opposed to the usual dazed and confused look.

 

Mon, 04/23/2012 - 07:09 | 2366187 XtraBullish
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Gold and Silver will resume the charge a soon as this global-Ponzi-death spiral in Sovereign Bullshit is outed.

Fiat has no value whatsoever - it's that simple.

Mon, 04/23/2012 - 07:14 | 2366192 Martin W
Martin W's picture

New week, new end of the world

Mon, 04/23/2012 - 07:22 | 2366207 orangegeek
orangegeek's picture

Europe is in the tank today.

 

Elliott Wave suggests that primary wave 3 down is on.

 

http://bullandbearmash.com/index/sp-500/hourly/

Mon, 04/23/2012 - 07:26 | 2366215 TradingJoe
TradingJoe's picture

Hah! The FEDsters have a 2 days meeting, eh!? Accroding to this morning's Futures, not alot of faith in them, hehehe! Doing shorts is also not really advisable...too many rumors that could reverse "trend", :)))! Awaiting bigger fall to go long PHYZZZZ!

Mon, 04/23/2012 - 07:35 | 2366234 q99x2
q99x2's picture

GDPs should be ever decreasing not increasing. It is nonsense to produce everything until poof nothing remains? Get rid of the banksters.

Mon, 04/23/2012 - 07:36 | 2366239 Mentaliusanything
Mentaliusanything's picture

BUT WAIT These ZMore

Tyler I'll take the steak knives Thanks

Mon, 04/23/2012 - 08:08 | 2366246 gaoptimize
gaoptimize's picture
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.” 
- Alexis de Tocqueville In their hearts, all Europeans understand this, but the urge to vote their self interest is supported by the observation that everyone else is also.
Mon, 04/23/2012 - 07:49 | 2366260 francis_sawyer
francis_sawyer's picture

"Hopium Hangover Hits"...

~~~

Alotta alliteration using peppy prose...

Mon, 04/23/2012 - 07:51 | 2366263 eddiebe
eddiebe's picture

Gotta make Europe/Euro look bad, so the US./dollar can look good. Kinda like the Republican/Democrat thing. The banksters are loading up on Euros. At some point they'll pull the old switcheroo.

http://www.youtube.com/watch?v=Rp6-wG5LLqE           Don't get fooled again!

Mon, 04/23/2012 - 08:11 | 2366297 Hobbleknee
Hobbleknee's picture

How can Europeans even pretend to have democracy, when many of them still have monarchies?

Mon, 04/23/2012 - 08:25 | 2366337 Arnold Ziffel
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Still, experts say asking prices in some cities appear to be way off. When there’s a $50,000 or more difference between the asking and selling price, that’s a sign that the house is likely overpriced, says Mark Goldman, real estate lecturer at San Diego State University’s Corky McMillin Real Estate Center. “Sellers and their agents are more optimistic than the buyers closing on deals,” he says.

 

http://finance.yahoo.com/news/cities-with-least-realistic-home-prices.html

Hopium of the masses.

Mon, 04/23/2012 - 10:05 | 2366606 GMadScientist
GMadScientist's picture

Sellers and their agents can do math...it's dealing with the reality presented by said math that trips them up.

They may remain deaf to the wisdom of being the first to sell and continue to sink deeper.

 

Mon, 04/23/2012 - 08:33 | 2366345 Martin Silenus
Martin Silenus's picture

Ponzi death spiral.....yaaaah!  *leaps from plane*

Mon, 04/23/2012 - 10:03 | 2366596 GMadScientist
GMadScientist's picture

You're gonna need more than a couple hundred thou this time, DB (Cooper).

 

Mon, 04/23/2012 - 09:58 | 2366574 GMadScientist
GMadScientist's picture

The Dutch are too staid to play "sure we will, honest" like Greece for a few more months?

 

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