Europe Turning Ugly

Tyler Durden's picture

In the past 30 minutes, Europe has turned downright ugly, with short-term Bunds soaring to a record 140.64, and weakness creeping across the peripherals, as the realization that not only was the Spanish bond auction unsustainable, but also a French downgrade rumor once again making its way (the source of this is a Citi note by Michael Saunders who said that it is likely that Moody's will follow S&P, and put the French Aaa rating on review for possible downgrade by the autumn, after the country's supplementary budget is formalized). The result is a sudden and swift slide in the EURUSD to 1.3070 or the LOD. Here are some of the other recent surprising developments in the aftermath of what the propaganda machine wants to spin as a "successful" Spanish bond auction.

Some of the other developments in the past 30 or so minutes, via BBG:

  • German Bund June Contract Rises 0.2 Percent to Record 140.64
  • French-German 10-Yr Yield Spread Widens to Most Since Jan. 10
  • Italian 10-Yr Bonds Extend Decline; Yield Up 11bps at 5.59%
  • Spanish Stocks Slump to Day’s Low; Oil, Gold, Bond Yields Drop
  • Spanish 10-Yr Bonds Extend Drop; Yields 8bps Higher at 5.90%
  • Spanish 2-Yr Notes Extend Decline; Yields Rise 4bps to 3.46%
  • Spanish Stocks Slump to Day’s Low; Oil, Gold, Bond Yields Drop

Reality is slowly starting to come back. Remember: Europe needs Spanish bond yields at 7.0% or higher, because that is the only catalyst to activate LTRO 3 and to get the ECB back in the game, which all banks in the world desperately need now that the IMF is woefully incapable of securing the funding needed for the "giant firewall".

European sovereign spreads look very reminiscent of last week, rally on a 'simple' bill auction then sell-off on reality...


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maxmad's picture

Collapse LTRO wont work, bitchez!

French Frog's picture

Will you please stop calling us 'ugly'


disabledvet's picture

how 'bout froggy then? girls like frogs you know. "they kiss them." at least..."so i'm told."

GetZeeGold's picture



Geez......and everything seemed to be going so great.


Had it fixed just the other day.


SAT 800's picture

Never; you're ugly, you talk funny, and you smell like garlic. Well, this must be the place to anounce that my recent Treasury Bond Short was a bust; I got punished for 600$/contract. I suppose alll the nervous nellies in EuroLand are buying these "safe haven" coupons. Grrr.

Nussi34's picture

Europe needs those pussies at the ECB ditched and reinstitute national currencies again! WTF is wrong with all these people, FX rates solve all problems, no central planning needed.

GerritB's picture

QE3 + LTRO3 before end of april i guess...

Gordon Freeman's picture

Nah--markets haven't felt anywhere close to enough pain...

DormRoom's picture

And there in lies the rub.  Youths are in pain. 50% youth unemployment in Greece & Spain. 25% youth unemployment in the US.  High student loan delinquencies.  45 Americans on foodstamps.  US Real Disposable income per capital hasn't increased in over 30 months.  There is a lot of pain, which the market doesn't reflect.


But the markets are broken.  It's a false signal.  You can't trust it.

GetZeeGold's picture



The youth are young.....just have them naw their arm off. It will surely grow back in time.


JPM Hater001's picture

It's the 45 on food stamps killing us...

HD's picture

G-Man: Prepare for unforeseen consequences

GetZeeGold's picture



.....and thus the term "unforeseen".


jus_lite_reading's picture

QE3 is coming... make no mistake about it. That said, the global ponzi has just begun unwinding.

Quintus's picture

It would certainly be very convenient for something to blow up in Europe so that the Fed can get busy handing out free money again while blaming 'Europe' for the whole thing.  'Not our fault....matters beyond our choice but to take extraordinary measures to prevent systemic risk spreading from Europe...etc...etc..'

Cone of Uncertainty's picture

We need failure, so that we ensure even more failure in the future.

GetZeeGold's picture



Failure will not be a participation trophy.


GeneMarchbanks's picture

'Remember: Europe needs Spanish bond yields at 7.0% or higher, because that is the only catalyst to activate LTRO 3 and to get the ECB back in the game, which all banks in the world desperately need now that the IMF is woefully incapable of securing the funding needed for the "giant firewall".'

IMF is irrelevant at this point, the biggest laughing stock of the BWIs. LTRO 3 is no guarantee and it's more likely any bond moves here are politically driven seeing how elections are the topic.

Ghordius's picture

"Remember: Europe needs Spanish bond yields at 7.0% or higher, because that is the only catalyst to activate LTRO 3 and to get the ECB back in the game, which all banks in the world desperately need now that the IMF is woefully incapable of securing the funding needed for the "giant firewall""

Please also remember that there are a lot of derivatives bets around that cash in and make nice banksters' bonuses if the yields go higher than 7%... ban that hideous stuff, start with CDSs

upppsss, I did it again! hemmm.... gold, bitchez? ;-) no kidding, just buy every month phyz, it's called "saving" in barbarous languages

disabledvet's picture

you NEED a bond market. And you NEED it NOW.

Ghordius's picture

you have to admit that bonds markets are slightly older than derivatives, though

bond yields are supposed to contain the risk-reward component

SeverinSlade's picture

Wait, what?  What's this "save" term you speak of?  Why does anyone need to save when they can just put it on a credit card and pay it later?

Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

No Fitch France Fowngrade?... Outlook negative. Inlook positive.

GetZeeGold's picture



Stiffed again!


What do you mean you can't work for rich gringo President!


LMAO's picture

Banzai, Why TF is the old bag with her Louis Vuitton missing from this pic.?

From the O.P. that the IMF is woefully incapable of securing the funding needed for the "giant firewall"

Well partially true.....The Norwegians at the hand of Sigbjørn Johnsen have already pledged to fill up the old bags' handbag with 6 billion SDR.

You gotta luv these Norwegian politicians for supporting these financial criminals and handing over taxpayers cash.

Please, do join us to help in our effort to save a racketeering banking cartel.



Norway, saviour of the universe and protector of bankster frauds.

Peter Pan's picture

LTRO3 is nothing more than water (liquidity) being added to a bucket full of holes. Once the water runs out you are back to square one plus you have lost your water and created a mess from the leakage.

Will they wake up in time to understand that the structural issues of unemployment and over indebtedness need to be addressed or will they sink Atlantis under a constant tide of liquidity?

SeverinSlade's picture

Will they wake up in time to understand that the structural issues of unemployment and over indebtedness need to be addressed or will they sink Atlantis under a constant tide of liquidity?


That's like trying to get an Obamanoid to admit that their fearless Comrade Constitutional Scholar has repeatedly violated his oath and committed high treason.  It ain't gonna happen.

zx12r's picture

And even though he has done everything conceivable to stifle any economic recovery, the obama-zombies will all vote for him again.

SeverinSlade's picture

Obviously the world doesn't need the IMF, but with the bizarro world's logic, how can ANYONE justify the need for the IMF?  With Lagarde walking around LITERALLY panhandling, wouldn't it be more efficient for sovereigns just to write a check to sovereigns in need?

Guess I can answer my own question though.  The central planners love unnecessary bureaucrats and red tape. 

Jack Sheet's picture

The most amusing aspect is that the Bunds won't be paid back either. It's all other people's money, as in "pension funds".

disabledvet's picture

i'm not a holder myself (been "cutting back" as they say) but that would be a BIG deal if that were to happen. "the gift that keeps giving"...also known heretofor as "Chickencoopology" (or "stooping" in the local parlance) or "how to turn those 5,000 towering monstrosities in New York into something useful finally." We'll throw in Chicago, Boston, Atlanta, Houston, Los Angeles (ah, SHINY AND NEW NO LESS!), Seattle,...did i miss any? I'm going short the price of chicken...and long their population bitchez!

Jack Sheet's picture

You can play safe with the "tagesanleihe" a sort of money market-type Bund debt instrument with daily withdrawal, but you can't invest more than €250000 per person and day and it currently yields 0.2%. It's my guess that the longer running debt instruments (10-30y) will be subject to paying out a lot less than 100% principal when Germany has bailed out the PIIGS.

TeeC's picture

'downright ugly' - hmm, seems a bit loaded. we're down -0.5% on stoxx 50.

BandGap's picture

Who would want to participate in this craziness?

EvlTheCat's picture

People with tattoos, evidently.

Roland99's picture

Looking better now. Markets love to hear about bad U.S. employment numbers. US futures going up now, too.


Randall Cabot's picture

 Marketwatch disappeared IBEX from its Europe list today. IBEX has been on that list forever but since it is cratering today MW doesn't want to spook anybody so they just removed it.   


FTSE 100   


/quotes/zigman/3173262 5,779 +34 +0.59%



CAC 40   


/quotes/zigman/3173214 3,227 -13 -0.41%





/quotes/zigman/2380246 6,722 -10 -0.15%





/quotes/zigman/1482176 14,491 -89 -0.61%





1,925 -4 -0.20%



Roland99's picture

they have it back now.  IBEX is at 6,994 now.


Tom Green Swedish's picture

Its cool to not pay your loans in Italy Spain Greece and the rest of Eastern Europe. They just want money no strings attached. I have experienced this first hand. They ask you for money and never pay it back. They are so pathetic and think they are entitled to BMW's and everything else hardworking people have. And when they don't get it they throw temper tantrums like little babies and wreck things. Somebody take it all away from these  babies. They are jacking up the entire world economy. We do not need these worthless fools. They have almost nothing to contribute yet they want the lifestyle of those who do.


If I was the ECB or IMF or whoever is in the market to buy their bonds I would not buy any of them and cut my losses immediately. Doesn't matter how high the interest is. They will not and cannot pay the money back. It's that simple. If they were going to pay it back we wouldn't have this problem now would we? This is their culture. They are theives and liars. What should happen is they should default all their assets over to the banks now and end it. Are the banks, etc really that stupid?


Now they want 3.8 trillion dollars?  The USA foreign debt isn't even that high. Give me a break. What will they want next?

Sandmann's picture

they are entitled to BMW's


I thought BMW was an 'aspirational motor car' and noone paid Cash but  leased it or took a 10-year note. Isn't that having a sense of entitlement  ?

ndrewoods's picture

That is what I thought as well. No one pays for BMW accessories in cash but as installment or lease is the only possible way that I can think of.

Dapper Dan's picture

Every week,  for as long as I can remember,  a story like this (below) is run by a media outlet, radio, news paper, t.v. or internet, somewhere in the US, always with the word Nazis or Hitler in it.

474-year-old painting stolen by Nazis given to owner's heirs

By Ian Johnston,

TALLAHASSEE, Fla. -- A painting – nearly five centuries old and worth millions - that was taken by the Nazis in World War II has been returned to the heirs of its original Jewish owner by U.S. officials.   

If you want you can monitor this yourself, just check the CPS WIRE resource site, (50) news sites linked    on their main page.  

Last week was the "John Demjanjuk is found guilty for his involvement in thousands of deaths at a Nazi death camp" story,

The week before, " Nazi Party Registers Washington Lobbyist" HuffPost,

before that, "

ARTSBEAT; Two Volumes Surface Detailing Nazi Looting By RANDY KENNEDY Published: March 28, 2012

any thoughts why?


Lednbrass's picture

I dunno, why does every third movie out of Hollywood involve Nazis?

Why do we have Holocaust memorials at taxpayer expense here in a  country that did not lose any people in it or have anything to do with commiting it in any way?

My guess would be that some powerful people consider it very much in their interests to keep hammering it down everyones throat. If I didnt know better and wasnt certain our beloved overlords would never do such a thing, I would think we were being very heavily conditioned here in the land of the free and home of the brave.

smiler03's picture

I would imagine that there are thousands of Jews in the US who lost relatives in the Holocaust. In addition the Holocaust is globally recognised as something terrible that should not be forgotten.

My 2 cents worth anyway.

BurningFuld's picture

As a politician if you hand over all the taxpayers money the Banksters have a very very good job waiting for you when you are done raping and pillaging your country.

goldfish1's picture
Spain's king apologises for jetting off to shoot elephants

Unprecedented apology for lavish trip taken during Spain's economic crisis comes after pressure from politicians


Fukk these fukktards.