Europe Recovery Rally Fizzles As French Bund Spreads Hit Record On Fresh Downgrade Rumor

Tyler Durden's picture

So much for the half life of the latest European recovery rally. After the ECB is rumored to have bought €1.7 billion in Italian (70%), Spanish and Portuguese bonds this morning, spreads across the continent stabilized... however briefly. Since then, confirmed speculation of an Austrian downgrade and an unconfirmed rumor that Egan Jones and/or other rating agencies will put France on downgrade review has just sent the French(OAT)-Bund spread to new record highs. And so, the ECB just used up even more firepower to achieve absolutely nothing, especially since the market will now expect Draghi to buy double or €3.4 billion tomorrow, or else it will get very, very angry. In the meantime, we urge the ECB to promptly buy all French bonds it can. Wait, what's that, the ECB can't buy French bonds (yet)? Oh... Oops.


And in other news, here is the EFSF since the European "bailout" summit. You know, the same EFSF which will buy trillions of old school European cash rolling debt.Hah.

Charts: Bloomberg

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walküre's picture

NO, NO, NO!!!

This not the type of rumor we like to hear! Next rumor please!

Berlusconi and Merkel getting it on and pledging hard Mortadella for soft Euros!

Hedgetard55's picture

Whew, Red Mountain Coffee getting monkey hammered, where's Robo?

Falcon15's picture

Thankfully on a different thread shilling the same old shit. Give it  a minute, Robotard will show up here spouting fecal advice all over the place. The only paper I am long on is toilet paper. Need plenty of tat around when the 'Tard shows up and starts shit spewing.

WestVillageIdiot's picture

In my best RoboTrader voice, "as the ECB prints to infinity and the European sideshow continues unabated the world continues to yawn and snatch up specialty retail stocks.  ZH can prepare for the end of the world but the Ponzi masters have shown that great wealth can be achieved by snatching up darling stocks such as CMG, SBUX and LULU."

How did I do? 

tmosley's picture

You forgot to deny that you ever owned $BankruptedRTReccommentedStock

topcallingtroll's picture

Ok I will try to help out.


Buy that gold dip bitches. Man up gold bugs.

SheepDog-One's picture

I like to imagine the most fitting voice for RoboTrader as Howard Cosell, the expert on things hes never actually done himself.

You can read his posts in a Howard Cosell voice it actually fits perfectly.

jdelano's picture

better yet, the asian guy with the megaphone in better off dead... 

Stax Edwards's picture

I like to picture my baby Jesus in a tuxedo t-shirt because it says I want to be formal, but I'm here to party

homersimpson's picture

You forgot to make your prediction AFTER it happens, not during or before. Otherwise, your Robotard imitation is acceptable.

DormRoom's picture

debtpocalypse.  There's an app for that.


I think Roubini says the ECB has about 150B of sterilization left before Germany must decide to pull the plug.




So if you live in Europe you have a few months to convert your money.

WestVillageIdiot's picture

Too bad they can't sterilize everybody that is attached to the ECB, and The Fed and the Bank of England.  We can look forward to their devil spawn continuing the Ponzi in the future. 

DormRoom's picture



Rabobank, and not Roubini, discusses the ECB 'natural sterilizaiton limit' of 300B.





NotApplicable's picture

I was wondering why anyone would claim that Roubini knew anything, let alone recommend it.

ex VRWC's picture

Wow that was a long winded way to basically say that EU breakup is inevitable.  I should have a gig like that - being paid for long-winded explanations of the obvious!

YesWeKahn's picture

Rumor time again. The big money is selling this time, all rumors will be negative until they start to buy again.

pmcgoohan's picture

Yes. In fact the big money is starting the rumours

Ancona's picture

Let the rumor monkey out of his cage.....STAT!!

BurningFuld's picture

Yikes! It would appear the shit is hitting the fan NOW!!

Falcon15's picture

Got preps? Pray for the best, prepare for the worst. PREPS BITCHEZ!

SheepDog-One's picture

RoboTarder told me he got preps, a few cases of Prep-H that is, for the ass-pounding hes taking lately.

CvlDobd's picture

I'll keep saying this.

Every time I read a comment including SHTF here the market rallies. Almost a fact. If we are truly macro bears stop saying that!

lolmao500's picture

Who cares what the spread is... what are the yields?

Long-John-Silver's picture

Europe’s economy has gone Fukushima.

GMadScientist's picture

Your move, Draghula.

vote_libertarian_party's picture

If I were that Egan Jones dude I would be hiding in my bunker and hiring a food tester.

Stax Edwards's picture

Can anybody spare a bowl of hopium?  I'm jonesin over here...

Dr. Engali's picture

The robots will be kicking in soon to start churning. Then we will see Robo appear. Until then QID looks to build on it's gains today.

SheepDog-One's picture

No Robo's still back on the last thread pretending to be a bond expert, rear-view style of course.

Dr. Engali's picture

I saw that as I went back to review the comments. I'm hoping to get some insight from him on investing in Tulips. I think they may be the wave of the future,or the past. Something like that.

JenkinsLane's picture

What a total shambles.

Blkhat117's picture


Odin's picture

This is the fun part of the roller coaster...

SheepDog-One's picture

Its all bankrupt, there is no 'countdown timer' of a few months just activated, its all going down in a shit heap. Israel now foaming at the mouth saying they guarantee theyll nuke the shit out of Iran before Christmas....for their own self defense....but of course.

Big things set to go down people, dont be caught trying to pick up a penny in front of a steamroller people.

john39's picture

yes but it was designed to go down.  now that we are there, the real fight will be about where we go from here.  more centralization of power and control?  or, is the yoke thrown off this time?  this fight has been a long time coming...

SheepDog-One's picture

By this point, those who designed the collapse figured everyone would just be going along with it, theyd have fooled everyone, and no one would be revolting against it. Instead what they got is no one buying their BS and now theyre faced with desperately trying to back-peddle. 

john39's picture

or scheme to make everyone even more desperate...    but, i expect a curveball here, and bankers can only hit what they control... 

Debtless's picture

The rally monkey cometh when the sun goes down.

fuu's picture

They mostly come at night. Mostly.

BurningFuld's picture

Damn, if I lived in one of the PIIGS I would be buying Gold with both hands. I mean when the Euro breaks up some time in the next few months the exchange into previous currencies is going really suck in the PIIGS. France will be very lucky to come out at par. What a fucking gong show this is. Hey Europe, News Flash!!  You are broke and your currency is way over valued!

Tense INDIAN's picture

SnP target 1210....after that we rally again ..the dollar is hitting 61.8% retracement ..of the last Fall...which could be this upmove is B ....this should end tomorrow...then dollar goes down again ....which will send stocks higher from the current levels.......i think this dollar correction should be a simple a-b-c.....and then this will rise UP for BIG up move...u know what will happen...

SheepDog-One's picture

So what youre saying is 'down-up-down, then up'...or did I get it backwards?

topcallingtroll's picture

SnP. Down up up

Dollar. Up down up

lookma's picture

In the meantime, we urge the ECB to promptly buy all French bonds it can. Wait, what's that, the ECB can't buy French bonds (yet)?

Snark aside, why does it always go both ways (not that going both ways is always wrong)?

Either its a good thing or its a bad thing, but the crisis has made clear that the ECB is not like the FED.  The FED is beholden to the USG, while the ECB is beholden to a cooalition of nations with divergent interests on issues like following the FED's lead and spiking the punch bowl with more booze (massively monetizing bonds). Even M.Friedman understood this:

"The one really new development is the euro, a transnational central bank issuing a common currency for its members. There is no historical precedent for such an arrangement."


The FED just pumps money and the USG deficiet spends moar and moar. Yet in contrast, the ECB appears paralyzed or unwilling to spike the punch in the same way so we have all kinds of political drama over austerity/cutting spending.

Is this not a distinction of note for you? 

Do you suspect the ECB saying no is cute and all but its just silly drama and of course they will open the money pump like the FED? What about ze germans?

Or do you think Germany just blows everyone off, maybe keeping a few of the exporter/ net-saver nations and forms a new currency?  So they can way shrink the size of their export markets?



topcallingtroll's picture

What deflation?
Inflation and gold to da moon!

Everybody buy more gold!!!

Archduke's picture

France is the only other credible continental economy and military industrial might. 


After the PIIGS I would look to Belgium, the Nederlands, Austria, for signs of inflated

decaying wealth.  The first two have the next higest population densities after the

sovereign principalities and city states, which means property assets are a large share

of their current "wealth", while conversely capital production is expensive due to the

same property price and relatively high wages.  Austria and Holland's population is

not only ageing, but their growth rate and immigration rate and influx of skilled labour

much lower than France.


lolmao500's picture

All this is irrelevant if Israel strikes Iran and oil goes to 200$ a barrel or more.