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European Bank Spreads Jump To Worst Of Year

Tyler Durden's picture





 

While European and US equity and credit market seem somewhat asleep this morning (despite quite significant moves in FX, Treasury, and Commodity markets), there is some stirrings in Italian and Spanish Senior and Subordinated debt markets. No matter how much de Guindos denies-denies-denies, the fact is the market has been increasingly pricing in subordinated bank debt impairment and now senior bank debt is inching wider also after the ECB's 'suggestions' came to light this weekend. Subordinated Italian and Spanish bank debt is at its worst since mid-December and the decompression trade we suggested is moving slowly on our direction.

 

 

Chart: Bloomberg

 


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Mon, 07/16/2012 - 09:54 | Link to Comment LawsofPhysics
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Haa haa.  Buying CDS and gold ahead of the planned collapse. - "winning".

Mon, 07/16/2012 - 09:31 | Link to Comment KNiCKER
KNiCKER's picture

Good news for the banksters as they buy CDS on their own companies...

Mon, 07/16/2012 - 09:33 | Link to Comment GMadScientist
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Like selling firebugs fire insurance.

Mon, 07/16/2012 - 09:33 | Link to Comment GMadScientist
GMadScientist's picture

Alert the caterers!!

Mon, 07/16/2012 - 09:34 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Significant move for silver.  Look at that move!

Buy it up and take back the money supply!

Screw the banks and take back the money!

Mon, 07/16/2012 - 09:53 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

On second thought, nevermind!  Buy the dollar due to its intrinsic value and because Bernanke can create an unlimited supply!  Dollar Bulls unite!

King Rahrah!

Mon, 07/16/2012 - 09:35 | Link to Comment gookempucky
gookempucky's picture

 

 senior bank debt is inching wider --- is it real or is it memorex ?

 

http://www.bloomberg.com/news/2012-07-16/ecb-said-to-no-longer-oppose-imposing-losses-on-bank-bondholders.html

 

 

Mon, 07/16/2012 - 09:37 | Link to Comment hugovanderbubble
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Moodys Downgrades Spain to BBB

Banco Popular-Pastor is in default

BTI Italian Bank in in default

 

Mon, 07/16/2012 - 09:43 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

And Italy is now discussing a firesale of public assets.  Rich pig German bankers to call and ask Monti -

How much for your women?

Mon, 07/16/2012 - 09:54 | Link to Comment disabledvet
disabledvet's picture

That's just for starters.

Mon, 07/16/2012 - 12:24 | Link to Comment mm17101978
mm17101978's picture

Italian girls are less stable than Italy's public debt, sadly. However, Mr. Hendrix the truth is that fucking Monti should sell the real estate (estimated in € 710 billion with a B!) owned by the damn Italian government instead of taxing the crap out of homeowners (like me) who are paying a mortgage to the damn bank of their first house (so the house isn't mine yet!). Every idiot is able to tax the crap out of homeowners and raise 20 billions that won't even be enough to pay the interest on the debt for 2012. Fucking Goldmanites (Draghi too!). Just buy PM and destroy those unelected morons! Hopefully XAU will break € 1300 to the upside soon.......

Mon, 07/16/2012 - 09:40 | Link to Comment world_debt_slave
world_debt_slave's picture

The rating companies have lost all credibility or at least they should.

Mon, 07/16/2012 - 09:42 | Link to Comment mrktwtch2
mrktwtch2's picture

it can rally now i got out of my long vol position..is it me or is this one of the most difficult markets to trade of lately??

Mon, 07/16/2012 - 09:42 | Link to Comment world_debt_slave
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OT Now we know the real reason to be in Treasury

Treasury probe cites officials for soliciting prostitutes, accepting industry gifts, FOIA docs reveal

http://thehill.com/homenews/administration/237985-treasury-probe-officials-solicited-prostitutes-accepted-industry-gifts

It sure isn't about running a country.

Mon, 07/16/2012 - 09:48 | Link to Comment orangedrinkandchips
orangedrinkandchips's picture

UP, UP AND AWAY!

Mon, 07/16/2012 - 10:31 | Link to Comment franzpick
franzpick's picture

The grain markets are what are going UUAA: it may become a major inflation story:

http://finviz.com/futures_charts.ashx?t=GRAINS&p=d1

Mon, 07/16/2012 - 10:45 | Link to Comment LawsofPhysics
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Well duh.  You can't "print" grains and people and livestock still need to eat.

Mon, 07/16/2012 - 09:56 | Link to Comment disabledvet
disabledvet's picture

So "subordinated" actually means subordinated. "and it's news because it's not news." I absolutely agree with that!

Mon, 07/16/2012 - 10:00 | Link to Comment monopoly
monopoly's picture

Just look at these bond yields on our 10, 30 year. Never would have thought it would get this low. Think anyone is scared out there?

Mon, 07/16/2012 - 10:45 | Link to Comment LawsofPhysics
LawsofPhysics's picture

More importantly, do you think this reflect the true cost of capital?  FAIL!

Mon, 07/16/2012 - 10:03 | Link to Comment GERxit
GERxit's picture

ECB no no-longer countering losses for senior (and clearly also subordinated) bondholders if bank is in a wind-down situation. Who's astonished by that market action?

But clearly the right step in the right direction to end moral hazard (if true)... perhaps Super Mario gets it before it's MUCH too late (too late was a couple of years ago)

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