European Bonds Give Up ALL Draghi "Believe" Gains In Worst Day In Over A Decade

Tyler Durden's picture


Spanish sovereign bond spreads blew almost 60bps wider today - that is the single-largest absolute move in spreads on record. Almost the entire gain in bonds post-Draghi 'Believe' speech from last week has been retraced in a mere few hours and while the front-end of the Italian and Spanish curves has outperformed, the sad fact is that in promising to maintain that end, then the entire rest of the curve becomes subordinated and therefore is sold as hope fades. Swiss, German, and Dutch short-dated bond yields all dropped to new record low rates. EURUSD has retraced its entire gain from Draghi-'believe', back to 1.2150 - despite his call not to short the EUR. Equity markets in Europe has dumped across the board today - with Italy and Spain -7% from pre-Draghi this morning - though notably still full of some hope from last week. It would seem that perhaps Mr. Draghi should keep his arrogant mouth shut a little more as we thought price stability was his mandate? The largest rise in EGB yields in a decade - all on the back of his misguided and over-confident egotistical attempt to jawbone markets to his reality. All mouth; no trousers.

Spanish bond spreads rose the most on record today...


as the entire gain from the Draghi 'believe' speech is gone...

and EURUSD has retraced the entire gain also...


but European stocks remain well above pre-Draghi-believe levels - despite a huge dump today...

as credit is leading us lower (but clearly stocks still 'believe' a little)...


It would appear to us that all those who 'believed' and bought and dreamed of times greater than this as we turn the corner on the Europe debacle will be just as dismally disappointed and dismissive of any future 'promises' as some of the more skeptical among us. If not, then we remind them - when you sit at the table and can't tel whop the sucker is - it's you!


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Thu, 08/02/2012 - 11:59 | 2672525 SHEEPFUKKER

When you don't believe even your own bullshit then you are a liar. 

Thu, 08/02/2012 - 12:04 | 2672553 idea_hamster
idea_hamster's picture

when you sit at the table and can't tel whop the sucker is - it's you!

 He he -- TD said "whop" in an article about Draghi.

Thu, 08/02/2012 - 12:07 | 2672564 Mark Carney
Mark Carney's picture

Paging Mr. Barroso, paging Mr. Barroso


Mr. Farage would like to say


"HA, HA"

Thu, 08/02/2012 - 22:44 | 2674740 Buck Johnson
Buck Johnson's picture

Your dead on, when you can't tell who the sucker is it is you.  Spain is back to pre Draghi levels from last week.  Tomorrow is going to be ugly just you wait and see.

Thu, 08/02/2012 - 11:59 | 2672526 Ted Baker
Ted Baker's picture


Thu, 08/02/2012 - 12:01 | 2672540 Muppet of the U...
Muppet of the Universe's picture

0 hedge, would you mind researching this and telling me I'm not crazy...  Cus I'm really scared right now.


Knight Capital recently purchased the futures accounts from Penson International, after Penson Clearing joined forces with Peak6 to create Apex Clearing.  Penson, an 11 cent stock lol, is now a subsidiary of Apex.

But here's where it gets interesting.  Penson's clearing of futures accounts covers well over 10 online brokers.

Now that Knight Capital is the clearing agent for these futures accounts, what happens to all of the futures accounts for these 10+ online brokerages, including popular ones such as ToS...

If Knight goes bankrupt, after their recent debocle with the FB IPO bungling and countless lawsuits aimed at them, including a 350 million dollar one by UBS, and now the 400+ million losses from yesterday, does rehypothecation play a role?

What happens to these futures accounts?  will they be rehypo'd to JM Morgan? 

What will happen to the futures market if a forced liquidation occurs?

Thu, 08/02/2012 - 12:34 | 2672667 Totentänzerlied
Totentänzerlied's picture

I have a miniscule account with a Penson-owned company, and I've had my finger sitting on the trigger since PFG imploded. What can I say, I like to live on the edge.

But yeah, Penson is a joke.


Thu, 08/02/2012 - 12:38 | 2672685 Muppet of the U...
Muppet of the Universe's picture

Hypothetically.  Lets just say I'm getting way fucking ahead of myself...

Lets just say the future's market takes a big hit in some sort of Knight Capital Group type event...

That would drive the prices of everything down. 

Wouldn't that be practically hyper deflationary?  Perhaps the precursor to something else?

Thu, 08/02/2012 - 12:35 | 2672673 Everybodys All ...
Everybodys All American's picture

If Knight goes under I would not call it a coincidence.

Thu, 08/02/2012 - 12:00 | 2672528 Vincent Vega
Vincent Vega's picture

Help Help Help! Please some Central Banker somewhere please say something...the market is falling like shit from a goose! /sarc

Thu, 08/02/2012 - 12:00 | 2672529 Hype Alert
Hype Alert's picture

Once again, the stock market proves to be the slower sibling.

Thu, 08/02/2012 - 12:00 | 2672530 alien-IQ
alien-IQ's picture

and Fakebook heading below $20.

Today has been a trifecta for laughter.

Thu, 08/02/2012 - 12:16 | 2672560 CrashisOptimistic
CrashisOptimistic's picture

It warms one's cockles to watch these fucks get butchered.

"It would seem that perhaps Mr. Draghi should keep his arrogant mouth shut a little more as we thought price stability was his mandate? "

Tyler, I half, but only half wanted him to go ahead and buy bonds today.  I wanted to see him get arrested at the Frankfurt airport for criminal (not civil) violation of the treaty and cool his Italian loafers in a German jail for a few years.

7.165% on the Spanish 10 year this moment.  Let's see Rajoy finance his bullshit at that price.

Thu, 08/02/2012 - 12:01 | 2672537 hourglass86
hourglass86's picture

I thought it was bullish >.<

Thu, 08/02/2012 - 12:04 | 2672542 bdc63
bdc63's picture

worst day in Europe in over a decade ... now THAT's really saying something....

I think that Draghi should have stayed with his old "we are planning on planning another meeting to make some more meeting plans ..."

Thu, 08/02/2012 - 12:02 | 2672543 spastic_colon
spastic_colon's picture

Que the US market melt up

Thu, 08/02/2012 - 12:02 | 2672545 buzzsaw99
buzzsaw99's picture

quick somebody call a waaambulance

Thu, 08/02/2012 - 12:51 | 2672767 Lohn Jocke
Lohn Jocke's picture

And I thought it was the U.S. that had the epidemic of Cryabetes.

Thu, 08/02/2012 - 12:58 | 2672809 Paul Atreides
Paul Atreides's picture

Must be all those Wahmbugers and Cries...

Thu, 08/02/2012 - 12:02 | 2672546 SwingForce
SwingForce's picture

Ringling Bros. have nothing over Draghi & Co.

Thu, 08/02/2012 - 12:03 | 2672550 Doublescythe
Doublescythe's picture

This is all part of Draghi's plan - he has to show zee germans how weak and fragile market sentiment is.

Give it another few hundred basis points - when Europe is on the verge of total implosion, Frauline Merkel will come to the table and agree to whatever he wants.

She'll be thrown out of office in the next election, but the German banks will have a nice cushy vice chairmanship seat waiting for her.

Thu, 08/02/2012 - 12:06 | 2672557 bdc63
bdc63's picture

Nope.  Germany is done with the Euro.  They just haven't declared it in public yet.

The Euro may live, but with strong countries like Spain and Italy behind it, will anybody really care anymore?

Thu, 08/02/2012 - 12:07 | 2672563 doc_in_the_house
doc_in_the_house's picture

short covered spx @ 1360

my spx shorts from Fri 7/27 @ spx 1386 = 26 points with 4X leverage = nice gain..

please repump to 1375+ today = me reshort baby !! = now 100% cash.

Thu, 08/02/2012 - 12:08 | 2672570 doc_in_the_house
doc_in_the_house's picture

today's bottom

so far is 1358...please repump to 1375+ today PPT = me re-short !!

Thu, 08/02/2012 - 12:08 | 2672571 the iD
the iD's picture

this is the part where the weekend-at-bernie's-market falls off the back of the speedboat or gets lost at a bar or a carnival. dont fret tho, the corpse of a market will conga around the corner and all will be well. until his next hilarious mishap that is.

Thu, 08/02/2012 - 12:15 | 2672593 monopoly
monopoly's picture

None of this is a surprise to us here at Zero Hedge. The day that Draghi spewed forth from his shit mouth how he will, all by himself, convince Germany and 16 other countries to follow his lead, we knew it was a Lie. And that is because Zero Hedge was first to analyze and post how it would NOT work and it is all just a facade. How the markets can be surprised by this is beyond my comprehension. 

I have said is a dozen times here, maybe not always right, but always the Truth. How much is That worth to us all!!!

And still, under the big top in ring #two Ladies and Gentlemen, and astounding feat for you.... FB soon to be reborn as a teenager. 

Thu, 08/02/2012 - 12:38 | 2672661 earleflorida
earleflorida's picture


B  ----   Brazil = Stagflation

R  ----   Russia = Communism reigns supreme [anti-business climate]

I   ----   India =  No energy > No lights > No industry > no fucking anything!

C  ----   China = Economy imploding > rebellion brewing?

*South Africa... what can I say? Who's gonna bail out Draghi's? EuroZone?  Who?... who, where, and when, for What it is... What!  


Thu, 08/02/2012 - 12:54 | 2672781 Lohn Jocke
Lohn Jocke's picture


Thu, 08/02/2012 - 12:39 | 2672690 Bastiat009
Bastiat009's picture

Just in case you missed it, Draghi used to work for Goldman. The entire world knows that goldmanites lie and cheat. You don't have to believe him. Actually it is safer not to believe him.

Thu, 08/02/2012 - 13:06 | 2672861 deez nutz
deez nutz's picture

How much did Goldman financially benefit from Mr. Dragpipes "Im gonna kick some azz" speech last week?  I am sure they wrote his script

Thu, 08/02/2012 - 13:15 | 2672926 Nobody For President
Nobody For President's picture

What astounds me is that so many of the so-called smart guys in the room believed the 'whatever it takes' comment that the media blew up to epic size. With Frau Merkel on holiday, it was obvious Draghi was not going to do anything except work on a plan. Yet the bond and FX market went all in on him actually going to do something. Batshit crazy!

Thu, 08/02/2012 - 13:55 | 2673121 shovelhead
shovelhead's picture

We call that round here an 'all hat-no cattle' rancher.

Thu, 08/02/2012 - 15:10 | 2673451 urbanelf
urbanelf's picture

I thought that was a woman with big tits, but no ass.

Thu, 08/02/2012 - 14:53 | 2673390 Againstthelie
Againstthelie's picture

Look what Monti and Rajoy have done today! Dragi was spot on today.

To me it was not Dragi, but these two, that are the reason, why the bondyields of their countries are rising - and this was done delibarately by them!

They try to force the debt union become reality with thier ridiculous and irresponsible behaviour. Bancrupt beggars playing the arrogant leaders and trying to command the money of others never has been trustworthy politics. And they know it. That way the want to force either Germany or the ECB to surrender and start taking all of their debt.

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