Contagion Returns: France CDS Over 200 For First Time Since January

Tyler Durden's picture

Just because these "contagion" things are never contained, as of minutes ago, French CDS has just passed over 200 bps for the first time since January, as the fact that Spain can issue debt maturing in a few weeks or months is completely forgotten (rightfully so), and as the market remembers that both Spain and France have critical bond auctions tomorrow, of which the Spanish one does not mature within the LTRO. So will Paulson publicly shorting Europe be finally correct this time? For now we don't know. What we do know is that the French contagion fear is spilling over to the country's bank sector where SocGen was down 6% at last check, and EURUSD is tumbling as of moments ago. Time to reimpose the financial short-selling ban yet?

Chart: Bloomberg

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GeneMarchbanks's picture

The Hit on the EU continues... what else is new?

slaughterer's picture

French CDS market will re-visit the Nov highs at 250.   Get ready for Sarko on his knees begging the ECB for help in 3,2,1...

GeneMarchbanks's picture

You mean Hollande surely, who hasn't really made it a secret. So anyway, despite all the bullshit disinformation surrounding the EU and its 'problems', he'll probably give vent to much larger trend here: nationalism.

youngman's picture

Why would anyone WANT to be a politician in any of these failing can´t fix them..and you will only be remembered for the failure....IMHO

xela2200's picture

Good question, ask Obama.

francis_sawyer's picture

"I INHERITED this crisis (because I was too fucking stupid & arrogant to have seen it coming from a mile away)"

knightowl77's picture

He INHERITED it after he voted for it while being a Jr Senator from Illinois...That asswipe voted in favor of the budgets and the bailouts while an unimportant member of the senate and now he complains about what he voted for....and was left to inherit....


Talk about GALL

EscapeKey's picture

Backhanders from insiders, who are given favourable contracts, Halliburton-style?

GetZeeGold's picture



Well.....that's good right? Are we there yet?


gjp's picture

We're only there when contagion arrives at its final destination: America.  The rot spread from there, the contagion has to come back there.  It seems like we have a ways to go yet as Europe's troubles only add to America's hubris and complacency.

LongSoupLine's picture



It doesn't matter, Cramer just said don't be distracted by Spain and Europe...just focus on US earnings and the market going up.


Buy! Buy! Buy!...unreal.

battle axe's picture

Also the French Banks have a ton of French sovereign paper, perhaps a double hit coming. Also lets not forget that Hollande is leading in the polls. All the ducks are lining up nicely...

lolmao500's picture

Don't worry, the socialists are gonna solve everything!


In other news... Agenda 21 anyone??

Obama's push to implement 'Eco-Tyranny'

The plan, entitled “Our Vision, Our Values,” notes that 130-140 million acres under BLM management are worthy of consideration as “treasured lands.” Because ecosystems defy “jurisdictional boundaries,” the memo outlines strategies by which the federal government can “rationalize and consolidate” its fragmented landholdings in order to properly “manage-at-scale.” While an ecosystem can simply refer to a single pond or small area, it can also refer to entire geographic regions, thus giving the government an almost unlimited justification to seize private property adjacent to “treasured lands.”

Sussman exposes this is not just theoretical discussion within the White House. The Obama administration is already moving to implement this as policy without consulting Congress by issuing an executive order entitled “America’s Great Outdoors Initiative.”

Irish66's picture

FTSE MIB looks scared

jus_lite_reading's picture

This is bullish for the ponzi markets...

Three thousand armed men playing musical chairs with just two chairs....

DavidC's picture

I've been keeping my Dow 10,000 baseball cap clean, wonder if I'll get to use it?


vmromk's picture

FUCK Bernanke.

Quintus's picture

Just f*cking die already, Euro!  I just can't face another multi-year, painfully drawn out "Will it/won't it" default saga leading to an outcome that was inevitable from day one.

Surely at this stage the ability of the clowns in charge to pretend that all is well must be wearing thin? Surely they can't string out the Spanish and Portuguese default process as long as they managed for Greece?

Please tell me they can't.

manhunter's picture

The euro isn't dying, no matter how many articles ZH posts. Fill in the blank:

70% of euroreserves are ____.

Quintus's picture

I know this one!  

The answer is "70% of euroreserves are: supposed to be in a vault under Manhattan but have actually already been sold or lent out by their supposed guardian.  Or maybe not.  Either way, they're not coming back to Europe.  No way.  If the Sh*t hits the fan in Euroland, the US will, sadly, have to use that gold itself (If they still have it) to back its new dollar currency."

manhunter's picture

Even if you were correct (you are not correct), the ECB could print euros to buy gold on the open market, raising the price and expanding its balance sheet value. The USD is checkmated, not the euro.

Quintus's picture

Who in their right mind would swap gold for ECB printed Euros when the currency is in its death stages?

If they're planning this sort of thing, they really need to do it now before Euro breakup becomes even more obviously inevitable than it already is.


Which bit of my previous post is wrong, by the way?

manhunter's picture

The part where you say the US will confiscate euro gold. They won't because Europe can terminate the dollar reserve status at any time, as I explained.

As for who will sell gold for euros, suppose the ECB made a liquid market for gold at 20x the current price, buy and sell. Many would trade with them, and their currency will be the new reserve. In fact, euro is already more widely used than USD (source BIS).

Quintus's picture

If the Euro collapses, the dollar's reserve status is toast anyway, since the entire financial system will collapse permanently within a few days.

The US will keep the gold and use it to back a replacement currency.  China and others are also acquiring huge quanties of gold for similar reasons.

manhunter's picture

Again, the euro is not collapsing; it was made to surive the transition from USD. Your starting premise is false.

But even if it were 'collapsing', what will it collapse against? Gold. And what will that do to the ECB balance sheet? Can you understand this?

SheepDog-One's picture

WTF? Youre saying the new saviour trade will be selling gold in exchange for freshly printed diluted Euro paper notes? Anyone doing that is retarded. 

Eugend66's picture

The world, the rest of the world shuns the USD right now. The USD will die because the producers say so ... chinese empty cities on chinese soil are better than USD holdings, anything goes but not the USD.

GeneMarchbanks's picture

To start, your entire mindset and opinions have clearly been formed by the sensationalist(read: psyops) Anglo American corporate media which leads many (including this site) to a disproportionate sentiment towards certain regions. More precisely, their currencies and economies.

An argument that the GBP is doomed imminently could be made just as easily as well as the $.

You're being lead by the nose and you don't even know it.

SheepDog-One's picture

All these paper fiat currencies are junk, to argue which one is 'king' is just dumb.

GeneMarchbanks's picture

Indeed they are not 'junk', they have been weaponized in order to accomplish what wars used to. I made no mention of 'king' currencies and have nothing against fiat per se. How they have been deployed is another matter altogether.

Again, there is deep narrative bias engrained here -- in public perception at large -- but it stems from a poor understanding of BWIs and the current monetary regime.

Eugend66's picture

Even if you were correct (you`re not) ....... the ECB could sell USD to buy gold on the open market. The ECB CAN print EUR to buy USD right now.

So There !


czarangelus's picture

Look on the bright side. Every day the system continues, is another day you can buy silver at a COLOSSAL markdown. Stay frosty.

DavidC's picture

Looking at the NASDAQ versus the Dow pre-open, don't worry, Apple will save us all!


DormRoom's picture

EU/ECB allowed an economic depression in Southern Europe so Northern Europe can have slow growth/recession. wtf.


Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity 


Jlmadyson's picture

Well they gave it their best effort in trying to keep it up for as long as they could. Now reallity cometh again.

Dull Which's picture

Increasing speculation out there that the French FOAT being launched this week by Eurex is a poison pill from Sarkozy to Hollande

The Economist is also of the view that only one of four Presidential candidates is even willing to recognise a debt problem and the size of the Govt sector in France (56% of GDP). Sarkozy is one of the three....


ekm's picture

No wonder futures and oil are tanking.

Geithner is speaking.

cossack55's picture

More accurately, his mouth is moving.  Speaking implies intelligence and forethought.

SheepDog-One's picture

Seems now they can talk down oil a bit, but also equities will fall too? Seems theyre painted into a corner now.

ekm's picture

They have gone beyond the point of no return.

The ZH article about Flow clarified everything. They only thing left is for them to continue to buy up the market in order to avoid margin calls, until they own all the market.

Nothing different from 2007-2008. Either margin calls or continue buying. Both will end with 30% correction out of nowwhere.

MFL8240's picture

More good news should help take the US stock market  over 14,000.  This is the most sickening game of fraud and deception ever on American soil.  The stock market is now a casino!

Hohum's picture

Is now a casino? When wasn't the stock market a casino?

Stoploss's picture

Every dog has his day.


alfa's picture
?? ?????????? ????? ??????? (Greek Yogurt-throwing as traditional protest)

This video is bilingual with subtitles and narration by virtual actors.!

youngman's picture

Which bonds will do better tomorrow...France´s or Spains???????????

Everybodys All American's picture

Cramer is particularly irritating today for some reason. What a lieing jackass. The SEC lets this continue on and on  and on. The article yesterday pointing out the evils that are unchecked in America and in particular finance start right here.

Dr. Engali's picture

I'm generaly a pretty passive guy, but every time I see his mug on TV with his smug look like he knows everything when is reality he is just a carnival barker, I just want to rip off his head and shit down his wind pipe.