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Europe Closes At Day's Lows As Sovereign Curves Invert
European equities marginally outperformed credit markets on the day but both ended dreadfully as markets went bidless into the close. Ending the day the lows, having retraced over 75% of the 9/23 to 10/28 swing rally, equity and credit markets are well into bear market territory as sovereign risk morphs back into financials and on into corporates. Sovereign spreads may look 'optically' marginally improved if one focuses merely on the 10Y levels, but a little more digging shows that almost without exception sovereign spread curves all bear flattened considerably today with the short-dated risk rising dramatically relative to mid maturities as jump risks become more and more of a concern.
Equity (now 25.5% off its Feb11 highs) started to catch up to credit into the close but closing at the lows into a low liquidity low volume long weekend suggests more than a little risk aversion. Equity, Credit, and FX markets are more in sync in Europe than in the US (where stocks remain a little exuberant still) and are back to 10/05-06 levels.
And if one looks down the 10Y column - you could be mistaken for thinking it was a good day for sovereign credit (aside from Belgium and Greece - and Austria off the chart). But it was the massive underperformance at the front-end that is most worrisome as inversions are more and more likely and bear flatteners appear the trade du jour. We suspect this is as much about the unwind of the crowded short-dated higher-yield trade than an actual spec flattener trade.
Charts: Bloomberg
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What recession?
Call Oliver, he knows what to do!
Not a recession. Shrinkage.
Significant shrinkage.
I was in the pool!!!
(Sorry. Had to do it. Couldn't help myself)
How many recessions does it take to make a depression?
Just one....but it needs to be a Triple Lindy Dip: http://www.youtube.com/watch?v=rDMMYT3vkTk
It's just a garden variety recession! Really!! PLease say it is, please!!!
Print print print print print print
Printing all the way
Oh what fun it is to print
Like Weimar, Zimbabwe Oh!
Dashing through the snow
'Cause you ain't got no home
2nd verse: The Banksters all on blow
3rd: The Banksters and their ho's
Belgium Dexia Debt Woes, Germany’s Debt Issuance Debacle – Obama Spares Two Turkeys (NOT Belgium and Germany)http://confoundedinterest.wordpress.com/2011/11/23/belgium-dexia-debt-wo...
He spared Biden and Pelosi???
C'mon, don't be so damn partisan.
It was, in fact, Boehner and Reid he spared.
You're welcome.
there is more than one Party?
Now that Europe is closed, that frees up the algos to focus on just the US equity markets.
Afternoon meltup, on the way!
can we have something positive, by mistake i picked up eur/chf at 1.2301 and losing big.
As soon as i recover you can have your negative market back.
Please some1 call Benya da Men and ask him to do something.
I think the rumor mill is grinding to a halt.
that's sux
i need only 30 pips to be on the green and then i am out for vacation.
Can we start some kind of rumor that SNB is about to intervene at 1.2.3.....
no it's not - just temporarily in neutral,... being put in reverse for christmas rally
no really?
Credit Markets deteriorate on the heels of MF Global:
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/11/23/bloomberg_ar...
I would expect an EOD short-covering rally on the NYSE as tomorrow is a meeting between Sarkozy, Merkel, and Draghi, where Draghi was asked by Merkel to bring along "new ideas."
A turkey for me and a turkey for you.
Let's eat turkey in a big brown shoe.
A Sandler classic....thanks for the reminder: http://www.youtube.com/watch?v=-z27FKwupds
Cool, time for the US ramp up...
bear flatteners?
right along the wall, there, with the screws, hooks, and hangers, sir!
next to the beer goggles. just left of them...
"bear flattener" alsways makes me think of those bear-hide rugs, head still attached, mouth agape... wondering what the hell happened.
since it's a bear, it probably wasn't trying for a nickel in front of a...
...oh! the animal spirituality of it!
While Obama makes a mockery of our political system and "bypasses Congress to pardon a turkey". He is the fucking joker!
Two turkeys, bud. Don't you read??
Not as well as Obama does.
It's going to be interesting to see what happens in the European markets on a day when the U.S. markets are closed.
Wheres my crash?
Germany told the other EU members "It's time for Tanksgiving. If you all don't start paying up we're going to send our Tanks.
Someone please pass the gravy.
Dont we even need a rumour anymore?
The only prescription is...MORE COWBELL!