Europe Again In The Spotlight After Latest Weak Spanish Auction, Sends Futures Much Lower

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Thu, 08/04/2011 - 07:12 | 1523146 JOYFUL
JOYFUL's picture

this is the end, my beautiful friend...this is, the end 

\jim morrison...\the doors

Thu, 08/04/2011 - 07:15 | 1523148 westboundnup
westboundnup's picture

Remember when bonds were purchased by people?

Thu, 08/04/2011 - 07:23 | 1523158 ZeroPower
ZeroPower's picture

Weak? 15s were 2.4x oversubscribed.

Forget the higher yield, the ECB is 'on it'.

Thu, 08/04/2011 - 07:27 | 1523161 Ghordius
Ghordius's picture

"when the grumpy old man was admit defeat and start lowering rates... Just like the last time he launched a horribly misguided tightening campaign"

I wonder why Tyler thinks the tightening campaign was misguided? Because it was doomed from the beginning or because ZIRP is the only "right" option? From what ZH comments usually are I would think because of the first, but sometimes I have my doubts...

I think he tried to do his job. Such super-low rates just build up an unpleasant future.

Thu, 08/04/2011 - 07:27 | 1523162 BigDuke6
BigDuke6's picture

i seem to be reading the articles more than the comments these days - am i getting old?

Anyway i'll try and give some extra analysis.

it seems the Spanish government has repeatedly emphasised that the country is in a much better budgetary position than other eurozone members. At the end of this year, Spain’s public debt is expected to be 67 per cent of GDP, well below the comparable figure of 80 per cent for Germany and France, let alone Italy’s 120 per cent.

Ever tried to get welfare in spain? - bloody difficult

Spain has also introduced an austerity budget aimed at slicing its budget deficit to 6 per cent of GDP this year, from 9.2 per cent last year and 11.1 per cent in 2009. But the success of the budget cuts depend crucially on the cooperation of the 17 Spanish regional governments, which control more than one third of public spending. Madrid has ordered these regions, which are fiscally autonomous, to curb their deficits, but it has little power to force them to do so.  Familiar scenario.

As a result, folks are concerned that a blow-out in regional government deficits could undermine Spain’s efforts to improve its finances. These concerns were heightened last week when rating agency Moody’s threatened to downgrade Spain’s credit rating in response to the country’s rising borrowing costs, weak economic growth, and the continued budgetary problems facing the regional governments. Moody’s also took the step of downgrading six Spanish regions to reflect the “deterioration” in their fiscal and debt positions.

They really have a goodam nerve don't they?

Thu, 08/04/2011 - 07:34 | 1523170 Ghordius
Ghordius's picture

Yess, it's a sign of old age. Try writing more "bitchez", makes you look younger! ;-)


Moody's and co.? They are just following orders. The CDS Beast has to be fed. Banker's bonuses have to be made. The real situation of Spain is only the backdrop of the great derivatives game. Gambling (a classical result of monetary expansion) is much more profitable then investing, and more fun, too! In Weimar Germany, at the end, everybody was gambling.

Thu, 08/04/2011 - 07:33 | 1523169 Cassandra Syndrome
Cassandra Syndrome's picture

I predict that during the "Press" conference, JCT says "appropriate" 57 times and rubs his lips with his handkerchief 8 times 

Thu, 08/04/2011 - 07:36 | 1523175 Ghordius
Ghordius's picture

Is rubbing lips a different sign from trembling lips? I'm used to times where rates counted, now it's all about lips. CB Chairmans definitely need some cosmetic surgery.

Thu, 08/04/2011 - 07:47 | 1523199 Cassandra Syndrome
Cassandra Syndrome's picture

A nervous tick for lying through his teeth maybe?

Thu, 08/04/2011 - 09:11 | 1523402 StychoKiller
StychoKiller's picture

Sometimes, eating your wordz leaves a bad taste in your mouth!

Thu, 08/04/2011 - 07:36 | 1523176 overmedicatedun...
overmedicatedundersexed's picture

any guess in which country the FRN will be stronger in the future when I book a vacation there they pay me?? Japan? Italy? Spain? Ireland? help welcome.

Thu, 08/04/2011 - 07:41 | 1523181 Ghordius
Ghordius's picture

I would suggest Argentina. Talk with the people, they will give you some tips for the future.

Thu, 08/04/2011 - 07:59 | 1523225 Version 7
Version 7's picture

Like how to kill an animal and eat the meat raw.

Thu, 08/04/2011 - 07:47 | 1523197 overmedicatedun...
overmedicatedundersexed's picture

lol, guess i could buy a ranch next to the bush's

Thu, 08/04/2011 - 08:04 | 1523234 topcallingtroll
topcallingtroll's picture

All this really seems to say buy gold, but i learned a long time ago when i wanted to buy it was time to sell and vice versa.

This time looks different. The recent truce in the currency war has been violated.

Thu, 08/04/2011 - 08:23 | 1523262 Curtis LeMay
Curtis LeMay's picture

Some quick facts about Spain:


- 20% unemployment

- 40% unemployment for those under 25 years old

- And here's a real doozy: Spain has TWICE the amount of empty homes, built on speculation, than the US, even though Spain has 1/7th the population of the US, and 1/10th the GDP...

- Germany will simply not partake in the expansion of the EFSF. Leading economists and market Gods insist that the EFSF must be quadrupled in size in order to even have a chance of bailing out Spain and Italy, and if anyone actually thinks Frau Doktor Merkel would have the nerve to even approach the German people and the Bundestag with the idea of quadrupling Germany's debt guarantees to the eurozone, then I have a brdige to sell you between Manhattan and Brooklyn - real cheap too! ;)

There was a big-shot from Nomura on TV yesterday morning and he made a really good point, which I wanted to pass along.

He said that if the ECB goes around buying five million of PIIGS bonds here, 10 million there, he'd see that as "normal" behavior  - in that such actions will be viewed by traders as the ECB simply just trying to tweak bond rates.

He then said that if traders see the ECB buying $100 million here a quarter Billion there, they will know for sure that the ECB senses deep crisis in either Spain or Italy, and then there will be real panic in the sovereign bond markets.

Can't argue with that...

The PIIGS are screwed, and so is euroland.

Wed, 09/14/2011 - 04:48 | 1667400 chinawholesaler
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