And Now: France

Tyler Durden's picture

French Bund spreads have just crossed 147 bps as the "cash bond long yet unable to hedge with CDS" crowd realizes that the Italian contagion is about to hit Paris. And unable to hedge using creative modern financial instruments, said crowd has reverted to the good old fashioned version thereof. We call it selling. Expect the spread to hit 150 bps momentarily.

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slaughterer's picture

Let's invite Spain to the Bund blowout party too!

Big Slick's picture

This Italien resignation smelled funny from the start: "Bad news is we've hit an iceberg and will sink in an hour.  Good news is Capt. Smith has resigned."  Oh good - markets can breathe easy

JesusUp's picture

Lagarde says when the icebergs appear what you need is a Titanic ship.

TruthInSunshine's picture




The fractional reserve banking created financial structure had a farm, P-I-I-G-S (+France+UK)

And on this farm there were some filthy debt whores, P-I-I-G-S (+France+UK)

With an oink oink here, and an oink oink there, P-I-I-G-S (+France+UK)

And lots of banks (private and central banks) are going to get trichinosis, P-I-I-G-S (+France+UK)

With a massive cut here, and a slashing blow there, P-I-I-G-S (+France+UK)

Let's all hope that the real pigs on Wall Street, the FRBNY, the Bank of England & in the ECB and in all Kleptocratic centers of 'finance' bleed out and die a slow, painful, miserable death -

- P-I-I-G-S (+France+UK+US).

cossack55's picture

Along the same lines:

HT to Tyler. "We call it selling".  Rare to meet an even larger smartass than myself. Congrats.

mt paul's picture

get off

my iceberg....

fizz's picture

I love the smell of contagion in the morning

GoldBricker's picture

It only smells like victory if:

  1. you're short, and
  2. your counterparties are paying off

They'll bring out the dead on the weekend, after markets close.

Reggie Middleton's picture

No surprises here:Wednesday, 03 August 2011

  France, As Most Susceptble To Contagion, Will See Its Banks Suffer

I have always been of the contention that
the 2008 market crash was cut short by the global machinations of a
cadre of central bankers intent on somehow rewriting the rules of
economics, investment physics and global finance. They became the buyers
of last resort, then consequently the buyers of only resort while at
the same time flooding the world with liquidity and guarantees. These
central bankers and the countries they allegedly strive to serve took on
the debt and nigh worthless assets of the private sector who threw
prudence through the window during the “Peak” phase of the circle of
economic life, and engaged in rampant speculation. Click to enlarge to
print quality…

Carlyle Groupie's picture

BustedBlogGoesBoom contagion spreading.....

JPL's picture

I wont be surprised when the FED will bust

Leopold B. Scotch's picture

I'm looking for the monetary manipulation that enables the economy and markets to totally dislocate in the first place, allowing for the amplitude of the ordinary, very tepid business cycle to grow far more distended since the price of money indicator (the interest rate) is rendered useless.

Why not just go with the cycle that every Austrian economist since before Mises has been refining into a very coherent explanation for what keeps happening, and moreover, why each of these cycles is far less healthy that the one before it?  You can overlay your cycle on it, but without their model, your model is anchored only to the intervention intended to "fix" the correction that is set in motion already, inevitably, by their initial interventions ahead of the original boom.

jonan's picture

it's butters!!! that's me *wink*

JesusUp's picture


you so fine you blow my mind


mt paul's picture



if i had 2 walrus

i'd give you one ..

jonan's picture

don't central banks themselves create the boom bust cycles by encouraging malinvestments with manipulated interest rates?  sans central banks the economic cycles of expansions and contractions would be much milder right? or am i missing something...

jdelano's picture

you know, looks like we really are on track for a very freaky 11.11.11

RemiG2010's picture

Allow me to correct you: "And Now: Farce"

disabledvet's picture

this is no farce. and if the President isn't demanding all the cables from the American Ambassador to Germany to have them analyzed to make sure the State Department didn't just start World War III he is...well, "remaining uninformed" on this issue.

CrimsonAvenger's picture

We have more important things to do, like implementing a Christmas tree tax.

Leopold B. Scotch's picture

Indeed.  And THANK GOD we now have, by executive order, a department of Christmas Tree Industry Help.

cossack55's picture

Has a Christmas tree czar(tsar) been named yet?

Max Hunter's picture

Of course.. And just in time.. Eachh Xmas tree will need to be checked for crazy brown people hiding in them that hate your freedoms.  They haven't decided whether to tax us for the new service or just throw it on the card..

CrimsonAvenger's picture

Speaking of which - how about a little equal opportunity? Where's the tax on yarmulkes, or Ramadan bath salts?

Iam_Silverman's picture

"a department of Christmas Tree Industry Help."

A lot of Muslim(s) in the WH would probably feel better if it was known as a Holiday Tree.

Iam_Silverman's picture

"So would a lot of Jews."

In the WH?  I think you'll find far more members of Knights of Columbus there.

Anyway, we would be just as happy letting y'all celebrate whatever you want - as long as you maintain the holiday tradition of overextending your credit limits.

Rover's picture

Isn't a flat christmas tree tax "regressive"? How did that ever fly? Doesn't sound...fair....

RiverRoad's picture

I wonder if they're really after all those folks with tree-farm tax write offs.  That's a nice little gig.

LongSoupLine's picture




And now: FranCCC-e.


fixed it.

RiverRoad's picture

OMG.  Now it's getting biblical:  raining Frogs.

rosex229's picture

>everything is literally falling apart yet european markets are 9 percent above the levels they were at on september 22nd

is reality just that bad that markets can't accept it.

knight99's picture

This should make you happy a great chance to short the market at these levels. Added to my short today with a stop out in the low 1300 spx great risk reward at these levels.

rosex229's picture

I've been all in on TVIX for 2 weeks now. just twiddling my thumbs and waiting.

TVIX shoots up faster than TZA, DPK, and even FAZ during recent market turbulence ( for obvious reasons). of course it also goes down at rates that make you sick to your stomach during rallies.

luckily I've always known time is on my side on this one.

SWRichmond's picture

is reality just that bad that markets can't accept it.

Not quite; it is so bad that the status quo cannot allow it to become reality, because that is the end of the status quo.  If everyone in a position of power continues to act like they still have power, do they?  If everyone continues to act like the economy still works, does it?

This is why I just want to get on with it.  There is no path forward until economic reality has its day.

Apres moi, le Deluge.  See?

Nate H's picture

"everything is literally falling apart yet european markets are 9 percent above the levels they were at on september 22nd

is reality just that bad that markets can't accept it."


Markets discount the future (or they are supposed to).  They are predicting that ECB comes in and federalizes - buys bonds directly as primary buyer of all Eurozone debt. That is their only option (other than break-up).  And it will buy some months or years of stability if they do. Market is at fulcrum of dumping 30-40% if europe unravels or rallying 15% if ECB pulls a FED or Japan.

jdelano's picture

 Market is at fulcrum of dumping 30-40% if europe unravels or rallying 15% if ECB pulls a FED or Japan.


Everbody buying into the rallies thinking this, thinking they're pretty clever.  Maybe so, but I'd posit that the most logical progression would be, market dumps 30-40% when Europe unravels, then print, then 15% rally.  I'll buy the fucking 40% dip.  Until then, short short short bitchez.  

rosex229's picture

I couldn't agree more that's why the other half of my investments are in physical gold and silver (75% gold 25% silver- gold is more immune to slow downs).

I just can't imagine germany allowing the ECB to print. unlike most of the world germany is keenly aware of the scourge of hyperinflation

cossack55's picture

Wasn't that a Jeopardy question? 

"Print My Ass Off for $500 please, Alek"

a: Germany and Zimbabwe

C1: "What is biggest buyers of paper"

A: "Sooooorrry, no"

C2: "Who were the largest buyers of ink"

A: "Sooooorrry, no."  I won't be calling on you Turd, quit buzzing"

RiverRoad's picture

Maybe the Ouija board says Armageddon's not that far off:  Buy the rumor; sell the news.

hedgehog9999's picture

However if they did that from these lofty levels in oil and all commodities, the world economy would be crushed defeating their very "solution" as prices would rise exhorbitantly with inflation everywhere particularly on food, the elite would be eaten alive literally all over the world  . . A better move would be, let the crash happen, get all prices into the sink  then flood the market with money to buy an extra couple of years until things get out of hand again.......then rinse and repeat....I am not sure how many times these game can go on however..... it is hard to print a gazillion trillion to cover for all the derivatives and debt that's out there. CDS's were actually holding it all together more or less until their use was rendered  ineffective by the Greek 50% hair cut move.......



fajensen's picture

is reality just that bad that markets can't accept it.

Maybe not: The OTC derivatives market is about USD 600 Trillion, the global stock exchanges are about 50 Trillion. 

One might reasonably expect that for every 1% of the OTC-crap that liquidates the stock market should gain 10%. The exchange-traded bonds are already pushed well below inflation, so stocks is where the action is going to be.

The public exchanges are devoid of the fraud, opacity and illiquidity that helped the banks make such epic paper profits in the past - and the very same factors are now stopping them from cashing in. But, via the invisible hand of the central banks, they could.

Maybe one should buy some LEAP calls on some of the stupidest banks  - and on the index just to bet on it?

Mongo's picture

Holy Collateralized Froglegs Batman!