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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Quintus's picture

Panhandling Bitchez!

maxmad's picture

collapse Bitchez!  Right on schedule!!

Sudden Debt's picture



Mentaliusanything's picture

Goats are fine!

I'M shit scared of PIGS and Sudden Debt

GetZeeGold's picture's Monday morning...and I'm already hitting the Jack Daniels.


HedgeAccordingly's picture

THe GOLD print which set the ES move lower in motion - 

Auburn's picture

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

GetZeeGold's picture



Going as fast as I need to yell.


navy62802's picture

Apparently, there was also a flash pop in USD-CHF overnight (20 Bil Euro trade at 90.00).

GerritB's picture

LTRO 5 coming soon!!

navy62802's picture

Euro carpet bombing campaign to start soon, as well. Chairsatan Bernank has offered to lend his helicopter for the operation.

insanelysane's picture

Red is the new green as it triggers Ctrl-P.

Sudden Debt's picture

Trading Japanese Style Bitchez!

Peter K's picture

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


Sudden Debt's picture



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!

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!!

nowhereman's picture

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

rebelscum1967's picture

too good to be true...we will be green at open talking AAPL earnings. :(


Boilermaker's picture

Buying opportunity of a lifetime...or some other shit.

Sudden Debt's picture

Sorry, this App is no longuer supported by the Itunes store.

Irish66's picture

you are funny this morning

Rubicon's picture

Tyler you forgot to mention Utd's draw against Everton.

nowhereman's picture

Yeah, It's like they want to give it away to Man City!

apberusdisvet's picture

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.



Boilermaker's picture

We don't know anything.  Neither do they.  That's what makes it so fucking scary.

wandstrasse's picture

2+2=5 not because of room 101, but because nobody wants to hear 2+2=4.

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...

Bag Of Meat's picture

Karma is a bitch, bitchez

Boilermaker's picture

There WILL BE a massive and magical pumping at around 11:30 EST and through the close.

How many times have been through this?

ZippyBananaPants's picture

Odds that Ron Paul tells the clowns on CNBC to stop licking Obama's nut sack?

I go 3-1

CrimsonAvenger's picture

If he uses those exact words I'll donate my entire stack to his campaign.

justinius1969's picture

yeah.. that phat phuk Liesman just looked destroyed..


GetZeeGold's picture



As opposed to the usual dazed and confused look.


XtraBullish's picture

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.

Martin W's picture

New week, new end of the world

orangegeek's picture

Europe is in the tank today.


Elliott Wave suggests that primary wave 3 down is on.

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!

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.

Mentaliusanything's picture

BUT WAIT These ZMore

Tyler I'll take the steak knives Thanks

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.
francis_sawyer's picture

"Hopium Hangover Hits"...


Alotta alliteration using peppy prose...

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.           Don't get fooled again!

Hobbleknee's picture

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

Arnold Ziffel's picture

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.

Hopium of the masses.

GMadScientist's picture

Sellers and their agents can do'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.


Martin Silenus's picture

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

GMadScientist's picture

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


GMadScientist's picture

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