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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.

Intraday:

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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Thu, 11/10/2011 - 11:25 | 1865984 walküre
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!

Thu, 11/10/2011 - 11:25 | 1865985 Hedgetard55
Hedgetard55's picture

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

Thu, 11/10/2011 - 11:31 | 1866014 Falcon15
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.

Thu, 11/10/2011 - 11:36 | 1866045 WestVillageIdiot
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? 

Thu, 11/10/2011 - 11:38 | 1866052 tmosley
tmosley's picture

You forgot to deny that you ever owned $BankruptedRTReccommentedStock

Thu, 11/10/2011 - 11:42 | 1866071 topcallingtroll
topcallingtroll's picture

Ok I will try to help out.

GOLD SMACKED DOWN TWO DAYS IN A ROW.

Buy that gold dip bitches. Man up gold bugs.

Thu, 11/10/2011 - 11:39 | 1866054 SheepDog-One
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.

Thu, 11/10/2011 - 11:41 | 1866065 jdelano
jdelano's picture

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

Thu, 11/10/2011 - 12:01 | 1866178 Stax Edwards
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

Thu, 11/10/2011 - 11:42 | 1866073 homersimpson
homersimpson's picture

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

Thu, 11/10/2011 - 11:34 | 1865988 DormRoom
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.

 

src: http://www.economonitor.com/nouriel/2011/11/09/eurozone-crisis-well-at-l...

 

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

Thu, 11/10/2011 - 11:37 | 1866048 WestVillageIdiot
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. 

Thu, 11/10/2011 - 11:44 | 1866080 john39
john39's picture

why stop at sterilization?

Thu, 11/10/2011 - 11:45 | 1866082 DormRoom
DormRoom's picture

oops..

 

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

 

src: http://ftalphaville.ft.com/blog/2011/11/08/732761/ecb-bond-buying-metaph...

 

 

Thu, 11/10/2011 - 12:43 | 1866341 NotApplicable
NotApplicable's picture

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

Thu, 11/10/2011 - 11:53 | 1866128 ex VRWC
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!

Thu, 11/10/2011 - 11:27 | 1865995 YesWeKahn
YesWeKahn's picture

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

Thu, 11/10/2011 - 11:32 | 1866032 pmcgoohan
pmcgoohan's picture

Yes. In fact the big money is starting the rumours

Thu, 11/10/2011 - 11:28 | 1866003 Ancona
Ancona's picture

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

Thu, 11/10/2011 - 11:28 | 1866004 Irish66
Irish66's picture

S&P

Thu, 11/10/2011 - 11:28 | 1866007 BurningFuld
BurningFuld's picture

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

Thu, 11/10/2011 - 11:32 | 1866028 Falcon15
Falcon15's picture

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

Thu, 11/10/2011 - 11:40 | 1866060 SheepDog-One
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.

Thu, 11/10/2011 - 11:44 | 1866076 CvlDobd
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!

Thu, 11/10/2011 - 11:29 | 1866008 lolmao500
lolmao500's picture

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

Thu, 11/10/2011 - 11:29 | 1866010 Long-John-Silver
Long-John-Silver's picture

Europe’s economy has gone Fukushima.

Thu, 11/10/2011 - 11:31 | 1866022 GMadScientist
GMadScientist's picture

Your move, Draghula.

Thu, 11/10/2011 - 11:31 | 1866026 vote_libertaria...
vote_libertarian_party's picture

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

Thu, 11/10/2011 - 11:33 | 1866033 Stax Edwards
Stax Edwards's picture

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

Thu, 11/10/2011 - 11:33 | 1866034 Dr. Engali
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.

Thu, 11/10/2011 - 11:42 | 1866068 SheepDog-One
SheepDog-One's picture

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

Thu, 11/10/2011 - 11:51 | 1866116 Dr. Engali
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.

Thu, 11/10/2011 - 11:39 | 1866056 JenkinsLane
JenkinsLane's picture

What a total shambles.

Thu, 11/10/2011 - 11:41 | 1866062 Blkhat117
Blkhat117's picture

EU + DEBT = CLUSTERFUCK!

Thu, 11/10/2011 - 11:42 | 1866069 Odin
Odin's picture

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

Thu, 11/10/2011 - 11:44 | 1866078 SheepDog-One
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.

Thu, 11/10/2011 - 11:47 | 1866087 john39
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...

Thu, 11/10/2011 - 11:49 | 1866103 SheepDog-One
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. 

Thu, 11/10/2011 - 12:27 | 1866288 john39
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... 

Thu, 11/10/2011 - 11:45 | 1866085 Debtless
Debtless's picture

The rally monkey cometh when the sun goes down.

Thu, 11/10/2011 - 11:55 | 1866147 fuu
fuu's picture

They mostly come at night. Mostly.

Thu, 11/10/2011 - 12:27 | 1866287 topcallingtroll
topcallingtroll's picture

I love that movie!!!

Thu, 11/10/2011 - 11:47 | 1866089 BurningFuld
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!

Thu, 11/10/2011 - 11:48 | 1866097 Tense INDIAN
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 A...now 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...

Thu, 11/10/2011 - 11:50 | 1866113 SheepDog-One
SheepDog-One's picture

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

Thu, 11/10/2011 - 11:58 | 1866135 topcallingtroll
topcallingtroll's picture

Clarification
SnP. Down up up

Dollar. Up down up

Thu, 11/10/2011 - 11:50 | 1866107 lookma
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."

http://www.centralbanking.com/central-banking/opinion/1407297/friedman-m...

 

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?

 

 

Thu, 11/10/2011 - 11:52 | 1866118 topcallingtroll
topcallingtroll's picture

Deflation?
What deflation?
Inflation and gold to da moon!

Everybody buy more gold!!!

Thu, 11/10/2011 - 11:52 | 1866119 Archduke
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.

 

http://en.wikipedia.org/wiki/List_of_sovereign_states_in_Europe_by_GDP_%...

http://en.wikipedia.org/wiki/Demographics_of_Europe

http://en.wikipedia.org/wiki/Ageing_of_Europe

http://en.wikipedia.org/wiki/Area_and_population_of_European_countries

 

Thu, 11/10/2011 - 11:52 | 1866120 lolmao500
lolmao500's picture

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

Thu, 11/10/2011 - 12:50 | 1866383 NotApplicable
NotApplicable's picture

Ssshhhh!!! You're gonna spoil it for everyone if you keep discussing the plot!

I just wonder what will be the last thing they sneak out before the big day, ala Rummy's "We lost $2T at the Pentagon" admission on 9/10/2001?

Maybe the whole world's financial system will seize up (as it's inevitable) so they can steal even more?

Thu, 11/10/2011 - 11:53 | 1866126 Loose Caboose
Loose Caboose's picture

Oh, the humanity!

Thu, 11/10/2011 - 12:09 | 1866222 getblue
getblue's picture

Watch out !

The game is almost over, and where will be heading the next fly to quality ? to the USD, LoL !

Thu, 11/10/2011 - 12:18 | 1866262 PaperBear
PaperBear's picture

Ben steps in range of a microphone at El Paso, Texas in 30 minutes time.

He must repeat his mantra of fighting deflation.

Thu, 11/10/2011 - 12:45 | 1866351 NotApplicable
NotApplicable's picture

I hear he's gonna burn Perry in effigy.

Thu, 11/10/2011 - 12:54 | 1866417 BurningBetty
BurningBetty's picture

This is ridicoules. The news are coming in so fast that its almost impossible to stay updated...

Thu, 11/10/2011 - 12:55 | 1866424 NotApplicable
NotApplicable's picture

"French Bund spread," sounds like something you'd find in a grocery store.

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