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Europe Smashes All Market Records On Its Way To Total Insolvency

Tyler Durden's picture


Spain's IBEX equity index closed at Euro-era lows today having dropped over 10% in the last 3 days (crushing the hopes of the afternoon post-short-sale-ban squeeze yesterday). This leaves IBEX down over 30% for the year (and Italy down over 18% YTD). Add to that; inverted long-end curves in Spain (and almost Italy), all-time record high short- and long-term spreads for Spanish debt and euro-era record high yields, record wide CDS-Cash basis, dramatic short-end weakness in Italy, new low negative rates in Switzerland (-46bps) and Germany (-7bps), and EURUSD at its lowest since June 2010 at 1.2059. But apart from that, the EU Summit seems to have done the trick nicely. Financials have been crushed in credit-land as subs notably underperform seniors and HY and IG credit continues to lead the equity markets lower in reality. Meanwhile, remember Greece? 30Y GGBs have dropped almost 20% in price in the last few days and have closed at all-time record low closing price at just EUR11.55!! S'all good though - where's Whitney?

You've seen enough Spanish charts - you nasty rubber-neckers...

So here's Italy's 5Y Bond spread to bunds...


and Greek Bond PRICES...

and European equity indices post EU Summit..


Charts: Bloomberg


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Tue, 07/24/2012 - 12:03 | 2645696 BlandJoe24
BlandJoe24's picture

What happens to EUR and to USD if this causes Swiss to decouple CHF from EUR?

Tue, 07/24/2012 - 12:06 | 2645711 Hedgetard55
Hedgetard55's picture

Just a guess. Euro crashes, CHF skys to the moon, stocks implode.

Tue, 07/24/2012 - 12:11 | 2645744 DoChenRollingBearing
DoChenRollingBearing's picture

It's all coming apart, guys.  Prepare accordingly.

Gold and cash.  

And turn that cash into gold before too long.  Maybe a gun or two and LOTS of ammo.

Tue, 07/24/2012 - 12:21 | 2645777 ZerOhead
ZerOhead's picture


Remote farmland with water first. Helps if you've got some old growth forest and lakes... you may be there for a while and might as well enjoy it!

Tue, 07/24/2012 - 12:23 | 2645810 DoChenRollingBearing
DoChenRollingBearing's picture

Yes, a good choice if you have LOTS of cash & gold to pay the property taxes, which will likely go up.  But, yes, remote farmland with water is an excellent choice, especially if your wife would go for it (which mine will not).

Tue, 07/24/2012 - 12:31 | 2645840 ZerOhead
ZerOhead's picture

PM's set aside for property taxes. Check.

I hear you on the wife thing... but that will change once the upscale shops close and the violence escalates.

Skinny dipping and float planes never get old.

Tue, 07/24/2012 - 12:40 | 2645895 The Monkey
The Monkey's picture

Here comes another summit, additional panicked calls from the IMF and global leaders and ultimately, coordinated central bank action.

1% 10 year yield and another bubble is on the way.

Tue, 07/24/2012 - 12:57 | 2645983 Tippoo Sultan
Tippoo Sultan's picture

I would not commit a single rupee to the Spanish bourse.

Tue, 07/24/2012 - 12:44 | 2645917 FranSix
FranSix's picture

How can you have your-r-r-r-r pudding vacation if you won't eat your-r-r-r-r meat?


The more remote you get, the more buggy.  Unless your really like buggy.


Tue, 07/24/2012 - 13:25 | 2646115 Optimusprime
Optimusprime's picture

Not necessarily on the bugs.  If the local bat, bird, and dragon fly populations are doing their jobs, then bugs not necessarily an issue.  And no, I'm not telling you where this paradise exists.

Tue, 07/24/2012 - 12:34 | 2645865 dwayne elizando
dwayne elizando's picture

Don't forget xanax. Money of (street) kings!

Tue, 07/24/2012 - 13:10 | 2646046 roadhazard
roadhazard's picture

Marry a local girl, I did.

Tue, 07/24/2012 - 12:14 | 2645754 BlandJoe24
BlandJoe24's picture

Why (specifically d/t CHF decoupling) would stocks implode?

Tue, 07/24/2012 - 13:28 | 2646133 El Oregonian
El Oregonian's picture

You never remove the last piling holding up the house of turds, especially if your standing underneath it.

Tue, 07/24/2012 - 12:09 | 2645727 Cangaroo.TNT
Cangaroo.TNT's picture

I'll take "Phrases that End with 'Bitchez'" for $200, Alex.

Tue, 07/24/2012 - 12:14 | 2645761 Conor
Conor's picture

"I'll take "Phrases that End with 'Bitchez'" for $200, Alex."

All-time classice comment!  I am dying laughing here...



Tue, 07/24/2012 - 12:20 | 2645794 Doublescythe
Doublescythe's picture

Gotta love Jesse from Breaking Bad.

Somebody find me a cook.

Post-crash world, I expect a few former brokers will be in desparate need of some crystal! :)


Tue, 07/24/2012 - 12:21 | 2645795 BandGap
BandGap's picture

Potent Potables for $500 is more like it. I enjoy a cocktail with the festivities.

Tue, 07/24/2012 - 12:22 | 2645803 Lohn Jocke
Lohn Jocke's picture

Merkel, Hollande, and Draghi walk into a bar... I forget the rest of the joke, but your mother's a whore.

Tue, 07/24/2012 - 12:12 | 2645753 fireangelmaverick
fireangelmaverick's picture

So what u r saying is that I should go long Toner Ink?


Tue, 07/24/2012 - 12:13 | 2645755 agent default
agent default's picture

At this level can they?  The SNB will get hit very hard.

Tue, 07/24/2012 - 12:34 | 2645869 Piranhanoia
Piranhanoia's picture

The locomotive is going 90 clics,  the cars behind it are slowing but going the same way.  The cars in front are stopped.  That is decoupling.  Physics bitchez

Tue, 07/24/2012 - 12:04 | 2645701 Hedgetard55
Hedgetard55's picture

Mr. Market will call Ben's bluff now, he won't wait until after the election.
The boyz need their fix NOW.

Tue, 07/24/2012 - 12:08 | 2645722 12ToothAssassin
12ToothAssassin's picture

Funny how junkies set the rules.


Inmates running the asylum.

Tue, 07/24/2012 - 13:15 | 2646069 Strider52
Strider52's picture

One flew over the United States...

Tue, 07/24/2012 - 12:54 | 2645967 eclectic syncretist
eclectic syncretist's picture

All that play money went bye-bye, but my pile of PM is unchanged. 

Tue, 07/24/2012 - 12:58 | 2645990 LMAOLORI
LMAOLORI's picture





Treasuries Doomsday Is Four Years Away For Vanguard


Meanwhile the politicians are on vacation good thing for them

Spain clashes video: Violence erupts as million-plus protest in 80 cities

Tue, 07/24/2012 - 12:05 | 2645704 john_connor
john_connor's picture

preview of what is coming to US markets next year

Tue, 07/24/2012 - 12:07 | 2645716 Hedgetard55
Hedgetard55's picture

Or next week. Or tomorrow.

Tue, 07/24/2012 - 12:14 | 2645747 SheepDog-One
SheepDog-One's picture

No doubt, what makes anyone believe we're insulated from reality for many more months? Im not so convinced at all.

Tue, 07/24/2012 - 12:33 | 2645861 PiratePawpaw
PiratePawpaw's picture

You think we are that far behind? You are an optimist.

Tue, 07/24/2012 - 12:07 | 2645718 bigwavedave
bigwavedave's picture

Whitney currently T - 1 and ..... Boom!

Tue, 07/24/2012 - 12:08 | 2645719 LongSoupLine
LongSoupLine's picture



Thank God there's a bunch of salt water between them and us in order to decouple!!

Tue, 07/24/2012 - 12:12 | 2645751 JR
JR's picture

All roads no longer lead to Rome. They lead to the City of Insolvency.

Tue, 07/24/2012 - 12:58 | 2645989 Anusocracy
Anusocracy's picture

I've already laid claim to a spot in the local garbage dump for foraging.

Tue, 07/24/2012 - 12:08 | 2645720 Dr. No
Dr. No's picture

How is this possible?  Banning short selling should have gotten rid of the speculators right?

Tue, 07/24/2012 - 12:09 | 2645726 zero19451945
zero19451945's picture

RobotTrader told me the "lows were in" on the IBEX!!!!!!!!!!!!!!!!!!!!!

WTF is going on here??? I thought we had reputable traders posting here??????

Tue, 07/24/2012 - 12:09 | 2645728 MillionDollarBoner_
MillionDollarBoner_'s picture

P'raps the chart is upside down?

Tue, 07/24/2012 - 12:09 | 2645731 tu-ne-cede-malis
tu-ne-cede-malis's picture

But...Rumpy said everything was fixed!

Tue, 07/24/2012 - 12:10 | 2645733 JR
JR's picture

George Washington’s current column produced fantastic comments and Escapeclaws’ link to L. Randall Wray is too pertinent not to be missed. Writes Wray…

 “In times like these, I always recall Robert Sherrill’s 1990 statement about the S&L crisis that ‘thievery is what unregulated capitalism is all about.’

“After 1990 we removed what was left of financial regulations following the flurry of deregulation of the early 1980s that had freed the thrifts so that they could self-destruct. And we are shocked, SHOCKED! that thieves took over the financial system.

“Nay, they took over the whole economy and the political system lock, stock, and barrel. They didn’t just blow up finance, they oversaw the swiftest transfer of wealth to the very top the world has ever seen. They screwed workers out of their jobs, they screwed homeowners out of their houses, they screwed retirees out of their pensions, and they screwed municipalities out of their revenues and assets.”  – L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City and Senior Scholar at the Levy Economics Institute of Bard College, NY., WHY WE’RE SCREWED

Wrote EC: “One of the comments on this article said, ‘For you youngsters out there, I've worked on Wall Street the last 45 years and I've seen it all.’ THIS IS AN EXCELLENT ARTICLE!"

Tue, 07/24/2012 - 12:20 | 2645788 LMAOLORI
LMAOLORI's picture



That article lost me with the OWS crap if that group wasn't just another Marxist front group they would have occupied the white house. Speaking of the Vampire Squid however...

In Washington, Blankfein Backs Dodd-Frank


JPMorgan Employees Join Goldman Sachs Among Top Obama Donors


Wall Street still giving to Obama

Tue, 07/24/2012 - 12:58 | 2645978 JR
JR's picture

Yours is a textbook example of trying to besmirch an excellent article by picking an extremely isolated, unrelated remark and attempting to categorize the entire article with your tiny reference. The whole world knows how Occupy Wall Street was used by many leftist groups to push their own agendas (just as they infiltrated and used the Girl Scouts); but in retrospect it has brought focus on a major truth, primarily, that the media’s obsession with the welfare state, public unions, and Marxist causes pollutes all news stories, including the Tea Party and even the Ron Paul campaign.


The San Francisco Chronicle’s coverage of Obama’s fundraiser visit to Oakland yesterday features a very large, above the fold color photograph and a large color photograph inside with accompanying messages on the small protest on the sidewalk for medical marijuana. So when the handful of protesters returned home from their outing, they could hardly believe the unbelievable success they achieved with a couple of signs and a big city newspaper.

This is what happened to the OWS story.

And, btw, Wray was talking about something bigger than the OWS movement. Here is what he said:

“I see two scenarios playing out. In the first, we allow Wall Street to carry on its merry way, as the foreclosure crisis continues and Wall Street steals all homes, packaging them into bundles to be sold for pennies on the dollar to hedge funds. All wealth will be redistributed to the top 1% who will become modern day feudal lords with the other 99% living at their pleasure on huge feudal estates.

“You can imagine for yourselves just what you’re going to have to do to pleasure the lords.

“This will take years, maybe even a decade or more, but it is the long march Wall Street has formulated for us. To be sure, ‘formulated’ should not be misinterpreted as intention. No one sat down and planned the creation of Western European feudalism when Rome collapsed. To be sure, the modern day feudal lords on Wall Street certainly conspire—to rig LIBOR and muni bond markets, for example—and each one individually wants to take as much as possible from customers and creditors and stockholders. But they are not planning and conspiring for the restoration of feudalism. Still, that is the default scenario—the outcome that will emerge in the absence of action.

“In the second, the 99% occupy, shut down, and obliterate Wall Street. Honestly, I have no idea how that can happen. I am waiting for suggestions.”

I'm usually in agreement with your basic points, LMAOLORI, but I differ with you on this one. Wray's is a great article.

Tue, 07/24/2012 - 13:17 | 2646080 roadhazard
roadhazard's picture

We will all be OWS shortly. The reason more are not now is because they are still too fat.

Tue, 07/24/2012 - 12:10 | 2645736 brace_brace_brace
brace_brace_brace's picture get ready bitchez. There is bloodbath coming.

Tue, 07/24/2012 - 12:15 | 2645767 LongSoupLine
LongSoupLine's picture

The guy standing in the middle waving the peace sign is a beast.

Tue, 07/24/2012 - 12:11 | 2645745 yrad
yrad's picture

My only investment this week is in my food storage.

Tue, 07/24/2012 - 14:47 | 2646433 Gief Gold Plox
Gief Gold Plox's picture

Likewise. After this years record drought, I decided on no PMs this week, stock up on food instead. And I hope some Oil tomorrow.

Tue, 07/24/2012 - 12:12 | 2645749 LMAOLORI
LMAOLORI's picture


hahaha the politicians over there are just like the politicians here they can't worry about it right now it's vacation time


Will Spain Burn While European Politicians Go On Vacation?



The average Italian has a net worth three times as much as you. I thought their country was a shambles. The average freaking Spaniard has a higher net worth than you.  more


Tue, 07/24/2012 - 12:13 | 2645757 Seasmoke
Seasmoke's picture

where is Jon Corzine, to bet all the customers money , when you need him ???

Tue, 07/24/2012 - 12:16 | 2645772 LongSoupLine
LongSoupLine's picture


Tue, 07/24/2012 - 12:23 | 2645805 LMAOLORI
LMAOLORI's picture


Someone should ask obama where he is...

Biased Media Ignores Shady Obama-Jon Corzine Connection

Tue, 07/24/2012 - 13:32 | 2646149 lotsoffun
lotsoffun's picture

corzine is beloved by his fellow men.  he sweeps the table clean, and that much left for fdic to have to print and cover.

actually - corzine is hated by jamie and lloyd and company.  he beat them to the game.  he trumped them all.  just like mozilla and o'neal.


Tue, 07/24/2012 - 12:14 | 2645762 Peter K
Peter K's picture

Don't Panic ! :)

The German Chan and FinMin are off on a three week vacations, and not telling anyone where they will be staying.

Only in Euroland :)

Tue, 07/24/2012 - 12:14 | 2645765 Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

Why do I get the feeling that TD is enjoying this?


I know I am a bit. Is that wrong of me??

Tue, 07/24/2012 - 12:17 | 2645781 The Swedish Chef
The Swedish Chef's picture

No, it shows you are human.

Tue, 07/24/2012 - 12:35 | 2645876 Quinvarius
Quinvarius's picture

Carnage boner. 

Tue, 07/24/2012 - 12:16 | 2645774 The Swedish Chef
The Swedish Chef's picture

Cue RoboTard to declare new and true IBEX bottom in 3, 2, 1... Forgot, bonds is his new theme. "My name is Bond, low, low yielding Bonds."

Tue, 07/24/2012 - 12:22 | 2645802 SheepDog-One
SheepDog-One's picture

My name is Bond....Negative Rate Bond.

Tue, 07/24/2012 - 12:19 | 2645783 Conor
Conor's picture

Today:  dollars, gold, ammo.

Tue, 07/24/2012 - 12:20 | 2645789 Meesohaawnee
Meesohaawnee's picture

robo said 2 weeks ago they were buying shares of TGT in "droves" and chuckie the consumer was buy buy buyin.. oops. Tell UPS that. i think Ben still has robo's back.

Tue, 07/24/2012 - 12:24 | 2645814 SheepDog-One
SheepDog-One's picture

RoboTarder is presently in the dumpster behind McDonalds trying to rustle up an Egg McMuffin.

Tue, 07/24/2012 - 13:14 | 2646065 viahj
viahj's picture

are you sure he's not applying another coat of wax to Cramer's dome?

Tue, 07/24/2012 - 13:30 | 2646141 lotsoffun
lotsoffun's picture

robo is huge.  he's currently working on visa's to bring more gandhis into the country to work for him cheap.  until he figures out in the end, they breed like rabbits, work the system, one of them works, gets moms and dad and cousins into the country, and then take his job for 1/2 the salary.


Tue, 07/24/2012 - 12:24 | 2645811 firstdivision
firstdivision's picture

Meanwhile in Iceland....

Tue, 07/24/2012 - 12:24 | 2645815 Howdan
Howdan's picture


Spanish Market Authorities to Spanish PM : "Hey, hey, is OK....we jus' introduced a short selling ban on dose eeeeeebil speculators - we going to stop the market falling"


Spanish PM : "Que??????!!"

Tue, 07/24/2012 - 12:25 | 2645817 Super Marco
Super Marco's picture

Longing canned Whip-ass.

Tue, 07/24/2012 - 12:25 | 2645818 Super Marco
Super Marco's picture

Longing canned Whip-ass.

Tue, 07/24/2012 - 12:26 | 2645821 ak_khanna
ak_khanna's picture

Countries around the world are taking on more debt without any fruitful attempts to curb their expenditures. This has resulted in a much more fragile and artificially held up financial system which is on a much shaky ground than it was in 2008. In 2008 companies failed due to excessive leverage and debt and now countries are likely to default because they took on the same bad debt on themselves. The borrowing costs or bond yields for these countries are again at record highs for the year due to their deteriorating financial condition.

A single currency for an economy as strong as Germany on one hand and relatively weaker economies like Greece or Ireland on the other is not sustainable in the long run. The idea of the stronger countries in the Euro zone to keep on bailing out the weaker ones repeatedly will be a difficult one to sell to the citizens of the economically stronger countries. Their is no practical way to save the Euro, the only thing that the politicians can do is to lavishly spend tax payers money towards bailouts which creates a much bigger crises a few months down the line but does not solve anything.

Tue, 07/24/2012 - 12:29 | 2645838 Quinvarius
Quinvarius's picture

It kind of makes you wonder what the further economic deterioration Bernanke is looking for would actually look like.  It was pretty obvious we had gone overthe cliff before the last Fed meeting to me.   Ben tried to pretend QE to infinity wasn't on the menu.  Open up big boy.  You are getting served.

Tue, 07/24/2012 - 13:01 | 2646003 eclectic syncretist
eclectic syncretist's picture

He can only issue debt or try to backstop banks, and congress hasn't agreed to take it on any additional debt at this point. He needs them to help him screw us even further!!!

He used his sledgehammer (interest rates) until it broke and now all he has left in the ol' tood box is one of those little Bob the Builder plastic toy hammers to work with.

Tue, 07/24/2012 - 12:32 | 2645855 Satan
Satan's picture

End of the world can wait. I start 6 weeks of paid holiday on Friday. We might be broke, but we live well ( bitchez )

Tue, 07/24/2012 - 12:33 | 2645864 theTribster
theTribster's picture

Picking up some Silver today, the price made it into the magical $26 range. Europe is like a patient that just won't die when they should already be dead! Its like we unplugged from the machines and they somehow keep on breathing, amazing. Just one more major event ought to do it though, Spain and Italy should fill that requirement sooner than later. If not, we always have France which will be the next in line for a pounding from the markets. Should continue as long as there are Euro countries left to pound, eventually even Germany will feel the wrath of the bonf vigilantes :)

Regardless of what happens the union will remain together even if they kick Greece out of the monetary union. Way too much political capital is invested in the Euro for it to disappear or break apart - just not going to happen. Even Germany realizes it would cost more to break up then it will to stay together.

Tue, 07/24/2012 - 12:48 | 2645938 dwayne elizando
dwayne elizando's picture

I figure the germans will bail on the € expirement. But then again I aint nobody.

Tue, 07/24/2012 - 12:43 | 2645913 orangedrinkandchips
orangedrinkandchips's picture

10yr GOING TO BREAK 1.40!!!!


No doubt it's going 10 years you pay to have them hold your money....

Tue, 07/24/2012 - 12:46 | 2645929 And Its Gone
And Its Gone's picture

PLEASE, PLEASE, save the "deer in the headlights" till there is a real drop in the markests this time.........

Tue, 07/24/2012 - 12:48 | 2645942 Jim in MN
Jim in MN's picture



Sell in July, and run and cry.

Tue, 07/24/2012 - 12:57 | 2645984 bagehot99
bagehot99's picture

I don't know how it survives. The EU has no democratic legitimacy, and is despised by about 70% of 'Europeans' (I use sarc quotes because a European doesn't actually exist). Once it is seen as visiting economic pain and hardship on ordinary people, which it has for years but now they realize it, there will be immense pressure to unwind the silly socialist experiment and go back to a simple trading bloc, which is how it ought to have been all along.

Tue, 07/24/2012 - 12:58 | 2645994 gatorengineer
gatorengineer's picture

Sorry Bichez another Algo driven hopium fueled low volume melt-up to the neutral position..... in front of fruit earnings and probably a Greece exceeded expectations rumor at 3pm....


Tue, 07/24/2012 - 13:51 | 2646211 YesWeKahn
YesWeKahn's picture

Crash, just fucking crash!

Bernanke, fuck you.

Tue, 07/24/2012 - 14:05 | 2646265 Snakeeyes
Snakeeyes's picture

Look at the numbers and tell me how Spain, Itally,Greece, Portugal or France are going to make it.

Tue, 07/24/2012 - 17:01 | 2647095 phat ho
phat ho's picture

you can run; but you can't hide...

Do NOT follow this link or you will be banned from the site!