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

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 07/16/2012 - 09:54 | 2619909 LawsofPhysics
LawsofPhysics's picture

Haa haa.  Buying CDS and gold ahead of the planned collapse. - "winning".

Mon, 07/16/2012 - 09:31 | 2619918 KNiCKER
KNiCKER's picture

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

Mon, 07/16/2012 - 09:33 | 2619927 GMadScientist
GMadScientist's picture

Like selling firebugs fire insurance.

Mon, 07/16/2012 - 09:33 | 2619924 GMadScientist
GMadScientist's picture

Alert the caterers!!

Mon, 07/16/2012 - 09:34 | 2619928 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 | 2619981 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 | 2619930 gookempucky
gookempucky's picture


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



Mon, 07/16/2012 - 09:37 | 2619937 hugovanderbubble
hugovanderbubble's picture

Moodys Downgrades Spain to BBB

Banco Popular-Pastor is in default

BTI Italian Bank in in default


Mon, 07/16/2012 - 09:43 | 2619947 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 | 2619986 disabledvet
disabledvet's picture

That's just for starters.

Mon, 07/16/2012 - 12:24 | 2620533 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 | 2619943 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 | 2619951 mrktwtch2
mrktwtch2's picture

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

Mon, 07/16/2012 - 09:42 | 2619952 world_debt_slave
world_debt_slave's picture

OT Now we know the real reason to be in Treasury

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

It sure isn't about running a country.

Mon, 07/16/2012 - 09:48 | 2619968 orangedrinkandchips
orangedrinkandchips's picture


Mon, 07/16/2012 - 10:31 | 2620125 franzpick
franzpick's picture

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

Mon, 07/16/2012 - 10:45 | 2620165 LawsofPhysics
LawsofPhysics's picture

Well duh.  You can't "print" grains and people and livestock still need to eat.

Mon, 07/16/2012 - 09:56 | 2619994 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 | 2620003 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 | 2620168 LawsofPhysics
LawsofPhysics's picture

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

Mon, 07/16/2012 - 10:03 | 2620028 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)

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