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European Market Close CDS Rerack

Submitted by Tyler Durden on 08/10/2011 11:10 -0400

Just because 3 hours ago is so 3 hours ago:

ITRAXX FIN SR +15, NEW RECORD 232
IT +51
SP +47
PORT +39
IRE +31
GREECE +.5
WAFFLES +37
FR +15
AUST +14
ENG +3
DEUTSCHE +2.5

Almost as if someone shouted fire in a crowded theater... And yet, the DJIA surged 400 points yesterday. That is unpossible. After all, the market iz a perfectly iffishynt discounting mechanizm.

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Wed, 08/10/2011 - 11:12 | 1546441 DormRoom

Computer Capitalism for Das Man

Wed, 08/10/2011 - 11:15 | 1546462 BaBaBouy

Fiats Meltdown...

Way to go, politcos...

Wed, 08/10/2011 - 11:18 | 1546482 BaBaBouy

GATA any D Marks yet ???

Wed, 08/10/2011 - 11:25 | 1546527 BaBaBouy

Sorry butt I rather be Holding GOLD, OIL and Commods than any Shit Bonds or paper by these lunatics ...

Wed, 08/10/2011 - 11:18 | 1546476 WonderDawg

AA+ looking not so bad right now.

Wed, 08/10/2011 - 11:12 | 1546444 Ancona

Boiled frogs for dinner, SocGen is imploding.

Wed, 08/10/2011 - 11:13 | 1546445 Cone of Uncertainty

Can we please get a post on this Dylan Rattigan clip.

Fucking balls out awesome.

http://www.youtube.com/watch?v=2Z1XOBDbIy0&feature=player_embedded Consequences will never be the same.

Wed, 08/10/2011 - 11:21 | 1546498 Smiddywesson

Actually, I wasn't very impressed with Mr. Rattigan's command of the facts or knowledge of the political realities. It's all well to rant and rave but we reached the fiscal point of no return already, and nobody has the self interest to stop this train wreck.

We are going on a gold standard, and the people who hatched this plan are buying up all the gold. When we switch to the new standard, most of the gold will be in the vaults of the soverign nations and the big banks, and they are the ones who will set the price, exactly the opposite of the current situation where they want the price down to protect their fiat.

Now there is only so much value in the world. Changing the monetary system doesn't add value, it just moves it around. So when the ramp the prices of their gold and make themselves solvent, where do you suppose that value comes from? It comes from you and me. As their gold becomes more valuable, the value of everything else goes down. It is a stealth tax.

Gold is the only safe harbor. Mr. Rattigan doesn't get it. The old system is just about done.

Wed, 08/10/2011 - 11:13 | 1546448 Agent P

Waffles...classic!

Wed, 08/10/2011 - 11:14 | 1546451 vast-dom

Let me wipe the sputum that's obscuring my smirk off my mug.......

Wed, 08/10/2011 - 11:16 | 1546454 unky

Gold didnt break 1780 yet, so all is well

Did Santas calculations go slightly wrong and 1780 is the magical number ?

Wed, 08/10/2011 - 11:14 | 1546457 digalert

My fav Stacy Herbert:

(the)"Ben Bernanke believes deploying permanent zero rates is the equivalent of sending out 16,000 troops to the streets of London. The financial and market carnage, however, continue because it is the system that is broken. You can flog it all you want with water cannons of liquidity, but it is too late"

Wed, 08/10/2011 - 11:15 | 1546461 Doode

I think the new recession will drive up the unemployment above 15% and will lead to the National Guard deployment in our cities within a year or two from now. It might be a good time to take some gun range courses and survival training - no kidding.

Wed, 08/10/2011 - 11:20 | 1546492 WonderDawg

A little late to the party, aincha? The time for that was last year. 15% UE will look good in a year.

Wed, 08/10/2011 - 11:21 | 1546506 buzzsaw99

welcome to the party pal

Wed, 08/10/2011 - 11:15 | 1546463 crash_davis

waffles... lol!

Wed, 08/10/2011 - 11:15 | 1546465 Spitzer

And the Euro keeps making higher lows. Down over 1% and still above 1.40

Wed, 08/10/2011 - 11:18 | 1546475 Doubleguns

Try comparing it to something real like....gold. Its plunging!!

Wed, 08/10/2011 - 11:25 | 1546513 hedgeless_horseman

Something real...like a matched pair from Holland & Holland.

Wed, 08/10/2011 - 11:26 | 1546520 Spitzer

Yeah and the 10,000 tons of gold, marked to market on the asset side of the ECB balance sheet is rising, when the dollar falls or the Euro falls.

Wed, 08/10/2011 - 11:38 | 1546605 NotApplicable

While that will prevent hyperinflation, it won't stop the banking disaster, and the ECB having to massively inflate to monetize their toxic paper. Which of course, will transfer wealth from the common European to the banksters.

Maybe the currency surviving, yet maintaining no purchasing power over that time, is not such a good thing, no? After all, it's the ECB that's got the gold, not the mass of people (in any meaningful quantity).

Wed, 08/10/2011 - 12:49 | 1547060 Spitzer

There will be capital inflows because the ECB holds the gold.

Wed, 08/10/2011 - 11:21 | 1546499 hedgeless_horseman

Remember the adjustments to manipulations of the currency basket weightings back in '08?

Soon...soon.

Wed, 08/10/2011 - 11:17 | 1546468 tony bonn

"the market iz a perfectly iffishynt discounting mechanizm"

for banksters, yes.....everyone else can eat shit.

Wed, 08/10/2011 - 11:31 | 1546558 karzai_luver

Yeah, the serfs that played in the markets can now only shop at the Dollah store!

bwhahahahahaaa

Wed, 08/10/2011 - 11:18 | 1546473 snowball777

On the aforementioned dizcounting mechanizm...

http://garyscommonsense.blogspot.com/2008/04/market-is-discounting-mecha...

"I've never really understood this one. I hear the pundits blindly repeating this one all the time. But let's think about it. Did the market discount the end of the recession in 01? Did the market discount this recession? Can someone explain to me how anyone can see into the future and have any idea how this is going to turn out. The fact is that no one knows how it's going to turn out and just because you add up all the investors in the world still in no way suggests that this collective mind can see the future. I'm sorry folks that's just not possible with today's technology.

So why does a bear market normally bottom half way through a recession (not withstanding the fact that the last bear market didn't bottom until a year after the recession ended)? The market doesn't discount anything. What the market does do is respond to liquidity. Obviously as soon as it's apparent that we are in a recession the Fed opens the money spigots. Low and behold the market starts to rally. Everyone immediately points out that the market is now discounting the end of the recession. And in a secular bull market the flood of liquidity does work it's magic and a few months later the economy is back on track.

The problems start to develop when you are no longer in a secular bull market. When stocks are in a secular bear market and commodities, because of supply and demand fundamentals are in a secular bull market the equation changes. Now when the Fed opens the flood gates it doesn't have the same effect. A large percentage of this liquidity flows into the undervalued commodity sector. The end result is an increase in commodity prices above and beyond the supply and demand fundamentals otherwise know as inflation. Rising inflation puts a squeeze on the economy limiting economic expansion thus making the recession worse not better.

Take a look at what has transpired so far. Since the Fed has opened the money spigots wide using every tool at their disposal and a few new ones the market has rallied 9%. Oil on the other hand has rallied 37%. This is of course the one commodity that puts the most pressure on economic expansion. Food is also rising at a similar rate. So the two sources of energy, oil for economic growth and food for human growth are rocketing skyward. Now despite the governments phony core inflation rate I suspect we all must eat and use oil. If these costs are escalating we aren't going to have as much to spend on those core rate computers or core rate rent now are we?

If the consumer is not only getting pushed down by falling real estate values, crushing debt and rising unemployment but now everything he needs to live is spiraling upward it's going to become tougher to frequently the local AAPL store or Cheesecake factory on a regular basis. Since our economy is more than 70% consumer spending it doesn't seem logical to continue to hammer away at that 70% with rising inflation if you want the economy to mend now does it?

I think the economy is going to have trouble pulling out of this recession easily like it did the last time or during the preceding 28 years simply because increasing the money supply is not going to have the same effect it did during the secular bull market. As I've said before the fun part of the monetary expansion is probably over. Now we are going to have to pay the price for continuing to expand the money supply in an environment where it will not cure what ails us. In this environment it is only making matters worse.

So what if the market moves back to new highs if oil goes to $150 and unemployment is moving towards double digits. By the way the job creation numbers were helped along tremendously by the birth death model the last several months. Does anyone really believe the country is creating lots of new businesses as we enter a recession? I suspect the true jobs numbers are in the -150,000 to -200,000 range.

The market is now in a race between massive liquidity injections and soaring energy and food costs. In the end inflation is going to win this battle it's just a matter of how long it takes to bring down the house of cards the Fed is building. The frightening thing is that the higher they build the house the bigger the collapse is going to be. If they don't come to their senses soon they risk the onset of a hyper inflationary depression down the road."

- Gary 4/22/08

Wed, 08/10/2011 - 11:17 | 1546477 heyligen

Waffles +37?

Big burgers +47?

Wed, 08/10/2011 - 11:18 | 1546479 Dick Darlington

But but but, the ponzimaster Rehn just told us there's no risk in euro sovereigns! No risk, don't u hear! However, he left the question "where's the handcuffs you fraudulent sack of ****?" unanswered.

Wed, 08/10/2011 - 11:18 | 1546481 combatsnoopy

"Almost as if someone shouted fire in a crowded theater... And yet, the DJIA surged 400 points yesterday. That is unpossible. After all, the market iz a perfectly iffishynt discounting mechanizm"

"Kristina Peterson explained it pretty well in a story earlier this month. She writes that basically it means the designated market makers “will not have to "DISSEMINATE"..."

http://blogs.wsj.com/marketbeat/2010/05/20/exactly-what-is-rule-48/

For the record, ZH has more proper and accurate grammar and iffishynt use of the Engrish language than Dow Jones Kristina Peterson.

Wed, 08/10/2011 - 11:18 | 1546484 Crack-up Boom

Geez - Does anyone know which ticking package is the least likely to explode???

Wed, 08/10/2011 - 12:31 | 1546959 MichaelG

If one goes up it'll likely set off the others.

Wed, 08/10/2011 - 11:18 | 1546485 Larry Darrell

Thank Jeebus Europe is closed. Now we can get back to good old HFT ramping. /sarc

Wed, 08/10/2011 - 11:19 | 1546490 accumbens

The french president canceled his long vacations today, he was cycling whilst the financial market was collapsing.

France is next on the list!!!!

Wed, 08/10/2011 - 11:20 | 1546493 ZeroPower

CDS MMs are offering SocGen quotes at 50pt spread for their 5yr sub. Just got this from GS: 552.5 // 602.5

Lol.

Wed, 08/10/2011 - 11:29 | 1546541 ptoemmes

I'd hate to be the person having to put the one liners out on the CNBS WEB site Breaking News headline. DOW is up, no it's down, off it's lows, at its highs. Shit just shoot me I quit!

They are no longer funny before you finish reading one.

Pete

Wed, 08/10/2011 - 11:36 | 1546591 BeetJuice

Where'd you get the source data for this report?

Wed, 08/10/2011 - 11:43 | 1546635 Mr Lennon Hendrix

London calling to the faraway towns

Now that war is declared-and battle come down

London calling to the underworld

Come out of the cupboard, you boys and girls

London calling, now don't look to us

Phoney Beetle-mania has bitten the dust

London calling, see we ain't got no swing

'Cept for the ring of the truncheon thing

The iceage is coming, the sun's zooming in

Meltdown expected, the wheat is going thin

Engines stop running, but I have no fear

London is drowning- and I live by the river

London calling to the imitation zone

Forget it, brother, an' go it alone

London calling to the zombies of death

Quit holding out, and draw another breath

London calling- and I don't want to shout

But while we were talking, I saw you nodding out

London calling, see we ain't got no highs

Except for that one with the yellowey eyes

The iceage is coming, the sun's zooming in

Engines stop running, the wheat is going thin

A nuclear era, but I have no fear

'Cuz London is drowning, and I- I live by the river!

Now get this!

London calling, yes, I was there too

An' you know what they said? Well some of it was true!

London calling, at the top of the dial

And after all this, won't you give me a smile?

London calling

I never felt so much alike....

Wed, 08/10/2011 - 11:44 | 1546645 Fix It Again Timmy

It's pretty bad when a cartoon chicken has a better assessment of the situation than those in charge:

"I say, you're going about it all wrong" - Famous Cartoon Chicken, Foghorn Leghorn

Wed, 08/10/2011 - 12:31 | 1546968 Freewheelin Franklin

That ECB buyoff seems to have disappeared pretty quickly. Got more heroin? The Eurojunkies need a fix.

Wed, 08/10/2011 - 12:58 | 1547109 jmc8888

The market never took Whooked On Fonix.

I wonder if they've discounted all that fraudulent debt?

Oh wate...thay havin't

Yep and bak in 2001, the markit wuz soo ifizshint, any crap.com was wurth 200 buks a thouzend tymez ofer. Hu cud cee that?

Personally I sure could as a college student.

Glass-Steagall (becuz hu cud cee that?)

Wed, 08/10/2011 - 13:24 | 1547228 ThirdCoastSurfer

To me this is more like computer operated roulette where the wheel always hits 00 while the house waits for any bets or stops to be placed and then clears the board!

Stops!?! We don't need no stink'n stops!

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European Market Close CDS Rerack

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