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Charting The Impact Of Eurozone Meetings On The Most Critical European Security

Tyler Durden's picture




 

While the US may have its "committee" decision to every problem in the world, Europe has the "summit meeting" which in the past would kiss and make everything better. No longer. As the following chart from Reuters indicates, annotating the relentless rise in Italian yields (which have about 100 bps in buffer from full out Eurozone collapse: if the 10 Year BTP hits 7.00% it's game over), the half life of the mere meeting in terms of favorable impact is now negligible and in fact, negative. Just like BOJ (and, some would add, Fed) interventions in the market now do more harm than good, so hollow Eurozone meetings without any actual resolution, simply make the Eurozone troubles that much more acute. Keep a close eye on the BTPs. They are already at 6% following last week's tumble first documented on Zero Hedge. If the price drops that much more, that will be it for the EMU experiment.

For the impact of Eurozone meetings on other less relevant securities, see here.

 

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Tue, 10/25/2011 - 10:47 | 1808180 Gene8696
Gene8696's picture

Until the last few days, I was proud to be 90% cash as I waited for another, deeper Oct. 3rd like dip. I'm still convinced there will be a better opportunity to put risk on down the road... But I must admit, seeing WTI oil move from 75 to 94 in two weeks has me feeling a bit left behind..

Tue, 10/25/2011 - 10:56 | 1808232 ZeroPower
ZeroPower's picture

I wouldnt worry about the loss of being left behind... it was a hedge unwind that created the snowball effect higher. Plenty of opportunity to come whatevery way you will want to play it.

One could however see the oil move as a sign that MMs no longer feel the need to be (as) hedged as they were before for a total collapse, i.e. WTI  under 70 basically reflects recession, oil at 90 and above signals 'all is well' or at least for the near future.

Tue, 10/25/2011 - 11:00 | 1808257 J 457
J 457's picture

All the bad news is not priced in, but it soon will be.  No doubt there will be another Oct 3 type dip with several 200-300pt down days.  Wait until EU implodes and the USD surges, coupled with USA debt ceiling govt shutdown, and what if another US downgrade for the 15 trillion debt.  This could all happen in a few shorts weeks and you'll be happy to be in cash. 

Tue, 10/25/2011 - 11:02 | 1808266 Adrenaline_Jockee
Adrenaline_Jockee's picture

I keep buying $1000 worth of SZO every few % higher it goes.  You just know gasoline is gonna reach $3 a gal soon...that should piss off the OWS all the more. haha.

 

Best price for crude is what? $70? Anything south of $50  or north of $80 and that hurts the economy.

 

imo.

Tue, 10/25/2011 - 11:10 | 1808314 J 457
J 457's picture

SCO has more volume and less swing.

Tue, 10/25/2011 - 10:47 | 1808181 GeneMarchbanks
GeneMarchbanks's picture

7% = game over. care to elaborate?

Tue, 10/25/2011 - 11:35 | 1808435 Zero Debt
Zero Debt's picture

Hugh Hendry (10 Feb 2010): ..."Greece is paying 7% on 2 year money"...

http://www.youtube.com/watch?v=RVN1zWLP-Wc

Wed, 10/26/2011 - 05:27 | 1811451 traditionalfunds
traditionalfunds's picture

Thanks for the video. Didn't realize Stiglitz was such a tool. Hendry at his finest.

Tue, 10/25/2011 - 10:48 | 1808187 Schmuck Raker
Schmuck Raker's picture

Hey Tyler, ECB buying Italian bonds yet today?

Tue, 10/25/2011 - 10:50 | 1808202 Belarus
Belarus's picture

The ECB only has 5 billion left in their coffers before they have negative equity. It's one of the reasons why the "plan of the plans to make a plan" trick is nearing its end. It's time to put up or shut up to use an old, tired cliche. 

 

Tue, 10/25/2011 - 10:56 | 1808235 Schmuck Raker
Schmuck Raker's picture

Check. But i'm looking for a token effort to go 6/6 on their streak.

"A Billion here, a Billion there." Gotta be seen to be making an effort, dontchaknow.

Tue, 10/25/2011 - 10:54 | 1808218 Quintus
Quintus's picture

Looks like it.  10Yr rose to within a whisker of 6% earlier today and then suddenly reversed, now down for the day.

I doubt that 'Investors' did that.

Tue, 10/25/2011 - 10:49 | 1808194 FL_Conservative
FL_Conservative's picture

Looks like "intervention time" has come in the eUR-a-O zone. EURUSD spike to 139.3 from 138.85.

Tue, 10/25/2011 - 10:51 | 1808203 lizzy36
lizzy36's picture

Am i going to get my pony tomorrow?

Tue, 10/25/2011 - 10:55 | 1808224 Sudden Debt
Sudden Debt's picture

pony.... wel eh... we had ourselfs some target practiceing and... don't you rather want a pig? We have plenty of those you know?

 

Tue, 10/25/2011 - 11:00 | 1808251 Schmuck Raker
Schmuck Raker's picture

Lizzy, this is Mr. Berlusconi. He's a nice man...he'll get you a pony, if you're nice to him.

Tue, 10/25/2011 - 11:22 | 1808375 LongBallsShortBrains
LongBallsShortBrains's picture

Maybe a pony ride.

Tue, 10/25/2011 - 10:53 | 1808213 Sudden Debt
Sudden Debt's picture

No problem, I'LL JUST JOIN ANOTHER CLUB!!

ANYBODY WANT TO CREATE A 4TH EMPIRE?

Tue, 10/25/2011 - 11:10 | 1808312 randomdrift
randomdrift's picture

There it is, the fourth alternative:

1) Vote "No" and cause Greece and possibly other PIIGS to default, possibly ending the Euro;

2) Vote "Yes" and kick the can down the road;

3) Surrender soverignty by creating an EU finance ministry; and

4) Liquidate Lybia.

Of course, 2, 3, and 4 may all be combined.

 I still think that voting "No" is by far the best choice.

 

 

 

 

Tue, 10/25/2011 - 10:56 | 1808231 Irish66
Irish66's picture

Anybody have a match?

Tue, 10/25/2011 - 11:22 | 1808378 Yamaha
Yamaha's picture

I have a match for ya - your face and sudden debt's ass......

Tue, 10/25/2011 - 10:56 | 1808233 dasein211
dasein211's picture

Euro dollar looks like its in vtach. I wasnt a fan of the idea that everything would crash at once but watching this surreal shit mAkes me think that throwing in the towel might be an option for the markets.

Tue, 10/25/2011 - 11:02 | 1808261 bombdog
bombdog's picture

Anyone going to cover this ESM thing? It's not the EFSM, but the ESM which is a new Euro power with immunity. They are looking for 700bln apparently...

http://www.sovereignindependent.com/?p=25455

"The ESM is a new EU-administration. To manage it, Brussels hires the Ministers of Finance of the 17 euro-countries. However, these ministers will come to Brussels with the key of their national vault and the full permission to take out all the money they want, when they want and as often as they want."

http://www.courtfool.info/en_ESM_the_new_European_dictator.htm

Tue, 10/25/2011 - 11:03 | 1808278 PaperBear
PaperBear's picture

“interventions in the market” ?

To anyone who thinks we have free markets I give you exhibit A above.

Tue, 10/25/2011 - 11:05 | 1808283 lolmao500
lolmao500's picture

Europe is not on the verge of war because of the european union. It is because of NATO.

Tue, 10/25/2011 - 11:06 | 1808297 littleguy
littleguy's picture

You're so right. The EU wouldn't say boo to a goose. A total bunch of conscientious objectors if I saw one.

The German Army has a union! haha

Tue, 10/25/2011 - 11:11 | 1808318 Dick Darlington
Dick Darlington's picture

Remember fellas that the multi-tool cdo monoline bond buying monster the eurofanatics will launch is supposed to END the ECB's monetization exercise. Could the last one turn off the lights, please...

Tue, 10/25/2011 - 11:13 | 1808330 markar
markar's picture

It's print or die time for EMU. Any bets on which it will be?

Tue, 10/25/2011 - 11:37 | 1808446 Nothing To See Here
Nothing To See Here's picture

They will die printing.

Tue, 10/25/2011 - 11:45 | 1808479 slewie the pi-rat
slewie the pi-rat's picture

psst!  wanna get 6% on your money for 10 years?

Tue, 10/25/2011 - 12:00 | 1808546 lolmao500
lolmao500's picture

No biggie. they ALWAYS find some way to kick the can down the road.

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