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Europe Ends Weak Week With Spanish Risk At 10-Day High

Tyler Durden's picture





 

Despite the valiant attempts to create something from absolutely nothing in the last few minutes of the European week (to wit Hilsenrath's Bernanke story and ECB bond 'corridor' rumors), Europe fell back from its hope-ridden highs this week. Spanish 5Y CDS broke back above 500bps, as did its 10Y spread to Bunds - giving back 10 days of 'gains' - while the exuberant front-end closed the week basically unchanged (but 40bps higher in yield from Monday's best levels). For context, Spanish bond spreads remain well above the peak crisis levels of last November - having bounced perfectly off them on Monday. European stocks ended today with small gains but all red on the week with Spain's IBEX -3.4%. EURUSD gained 200pips on the week as Fed QE hope faded and we suspect the re-appearance of EU pain repatriated more EUR - though it was playing catch up to swap-spreads also.

European stock markets this week...

 

Europe's sovereign bond risk this week...

 

but Spain has now retraced the last 10 days' gains in risk... (lower pane is CDS, middle is spread to bunds)

 

and for context...Spain never really got 'safe'

 

and Spain's front-end has slid notably in the last few days..

 


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Fri, 08/24/2012 - 11:55 | Link to Comment Precious
Precious's picture

August 8, 1929

Fri, 08/24/2012 - 12:00 | Link to Comment fireangelmaverick
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Bernanke" Although the decrease in yields from 5.5% to 2.3% did not achieve squat we do sincerely believe the last 5 basis points reduction with a 1 trillion bond buying program should make everyone want to buy a vacation home once again."

 

Fri, 08/24/2012 - 12:06 | Link to Comment Precious
Precious's picture

"We will not have any more crashes in our time." - John Maynard Keynes, 1927

"All safe deposit boxes in banks or financial institutions have been sealed... and may only be opened in the presence of an agent of the I.R.S."  - President F.D. Roosevelt, 1933

Fri, 08/24/2012 - 12:26 | Link to Comment Stoploss
Stoploss's picture

"For at least another hundred years, we must pretend to ourselves and to everyone, that fair is foul and foul is fair, for foul is useful, and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into the daylight" - Keynes.

Fri, 08/24/2012 - 11:55 | Link to Comment economicfreefall
economicfreefall's picture

Time for ECB to do what they are not allowed to...buy some more bonds...

http://www.MiningStockValuator.com -portfolio tracker & analysis of gold and silver stocks

Fri, 08/24/2012 - 11:57 | Link to Comment magpie
magpie's picture

Spanish algos must have that 'Plus ultra' motto as well

I'm not about to throw my beerstein at the computer screen just yet...

Fri, 08/24/2012 - 11:56 | Link to Comment Desert Irish
Desert Irish's picture

We must be due for another emergency summit.....obviously 21 of them wasn't enough

Fri, 08/24/2012 - 12:17 | Link to Comment d_taco
d_taco's picture

Do not distract yourself by ZeroHedge.

ZeroHedge is just a way to serve the London Bankers in dumping Gilts and overprized Pounds into the marked.  

Germany Export grew

http://www.rttnews.com/1952699/germany-s-q2-growth-confirmed-at-0-3.aspx...

Export agriculture products Germany at record

http://translate.google.nl/translate?sl=nl&tl=en&js=n&prev=_t&hl=nl&ie=U...

The UK is in a big mess and there will be no Germany to save it.

Euro area only area with a trade surplus.

UK is as we speak collapsing. Trade deficit growing, Budget Deficit Growing Resession Growing.

It is just a matter of time investors realize they are screwed by Zerohedge one-sided anti Euro news and realize the Euro is most underpriced and the Pound is most overpriced.

 

 

 

 

Fri, 08/24/2012 - 12:26 | Link to Comment DeFeralCat
DeFeralCat's picture

Good thing I remember reading that there is no true meat in a Taco Bell taco. It is all pink slime filler.

Fri, 08/24/2012 - 12:39 | Link to Comment d_taco
d_taco's picture

Great joke. Jokes about names are alway's great. You must be the clown at parties.

By the way it is a Frisian name nothing to do with meat.

 

Fri, 08/24/2012 - 12:47 | Link to Comment akak
akak's picture

 

By the way it is a Frisian name

Oh, so it has to do with French Fris, then?

Fri, 08/24/2012 - 13:51 | Link to Comment d_taco
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Frisian it is a part of the Netherlands

The Netherlands : Budget deficit 2.7% (shrinking), trade surplus, a litle Growth. Public debt is the same as public pension savings.

Same  triple A as the UK. But al the economical number in the UK are the reverse from that in the Netherlands.

Again a big mihe Rating agencies are real objective

Frisian it is a part of the Netherlands

The Netherlands : Budget deficit 2.7% (shrinking), trade surplus, a litle Growth. Public debt is the same as public pension savings.

Same  triple A as the UK. But al the economical number in the UK are the reverse from that in the Netherlands.

Fri, 08/24/2012 - 13:56 | Link to Comment akak
akak's picture

I was just toying with you.  Actually, I have long known that Frisia is a part of the Netherlands.  Your native language, in fact, is considered by linguists to be the closest of all European languages to English.  No offense intended.

Fri, 08/24/2012 - 14:57 | Link to Comment d_taco
d_taco's picture

:-) I know their are more political connections. Has something to do with kings and queens.

But it is an interesting fact that there is (a not very openly) devide in the Dutch ruling elite between more Europe centric politics and more UK-US centric-politics. Banking, part of the political elite and part of the army is more UK-US centric while trade and production is more Europe centric. With the colapse of the banking system and big cuts in military spending I think the pro Europe elite will gain more control. The current Prime Minister Mr Rutte is more fouced on the UK. But the money is earned in the east and the industry does not want to lose the European marked. 

But I am not against the UK. I only think the UK is in a worse shape than people think and I think that parts of Europe are a big mess but that it is not because the Euro. It is beacause a failing Banking system. And that again is the main money maker for the UK economy.

I have to admit I made this year wrong forex trades, my portfolio is up 100% YTD (thanks to oil first down and then up and now I am short agian) but all my forex trades went bad. :-(.  (I do not trade against the Euro)

But I am absolutly convinced the UK is completly misspriced by the markeds. So I give it a try again. Long Euro Short Pound.

It is amazing that ZeroHedge is very negative about the Euro and about the Dollar, but no word on the UK. I keep in mind that we are in a information war. I like to listen to RT but I know it is Rusian, I listen to Presstv I know it is Iranian, I love MSNBC it is US, I love Bloomberg  it is Wallstreet, I read the FT it is the City. But what about ZeroHedge are they altruist? I believe they are part of the UK Banking information machine. Think about it.... But it is still valuable and fun. :-)

 

 

Fri, 08/24/2012 - 14:37 | Link to Comment Schmuck Raker
Schmuck Raker's picture

"Public debt is the same as public pension savings."

Other countries too smae problem having. Done feel badly.

Fri, 08/24/2012 - 15:02 | Link to Comment d_taco
d_taco's picture

I know it is stupid. A lot of people in the Netherlands has a huge Mortgage and huge pension savings. It is fiscal stimulated by the goverment. You can deduct the interest from your income. Imagine for the highest tax bracket it save you 50%.

So we have a system: People gives pension funds money, the funds give it to the Banks and the banks lend it to the very same people. It is briliant.

Fri, 08/24/2012 - 12:23 | Link to Comment realtick
realtick's picture

No wonder Bernanke is panicking again - look at the bank/broker stocks:

Bankrupt Banks, Broke Brokers & Breaking Down Charts

http://chartistfriendfrompittsburgh.blogspot.com/2012/08/bankrupt-banks-...

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