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European Financials At Worst Levels In Two Weeks

Submitted by Tyler Durden on 02/13/2012 13:04 -0400

Since last Wednesday, European financials have seen credit spreads widen dramatically. After some initial gains today, they once again retreated and traded out to their widest levels in two weeks as both financials and non-financials closed wider and at their worst levels of the day in European credit. Sovereigns also deteriorated significantly after around 8amET with 10Y BTPs for instance adding 20bps or so to close unch (as the rest of the major sovereigns saw de minimus +2 to -4bps changes). Bunds and Treasuries stayed close together and we note TSYs rallied 7bps (from +4 to -3bps) from early morning Europe trading and leaked off a little into the close. WTI is holding above $100 even as Copper is down 1% while Gold and Silver's gains are in sync with USD's modest losses - though EUR is leaking back lower (holding just above 1.32) into the close to around unch. While this post-Thanksgiving Day rally was perhaps predicated on global growth (US decoupling, China soft landing) and extended by LTRO (contagious bank insolvency runs risk containment), the underperformance of banks' credit risk in the last few days should be very worrisome with Senior unsecured credit wider by over 30bps in 3 days, its largest deterioration in two months.

Senior and Sub financials (red and blue respectively) underperformed once again and trade wider than the wides of Friday. Stocks (dark blue) are holding on to gains but we have seen this before as we note investment grade (orange) and high-yield (black) are also leaking back wider.

Senior credit spreads are at two-week wides and have seen the biggest 3 day deterioration in over two months. The spread between LTRO and non-LTRO banks continues to widen.

Belgium and France lifted their short-bans and rather unexpectedly we saw financial stocks rally on that news (??) but credit continues to slide rather dramatically wider.

Once again CONTEXT has pulled back from over-exuberance (FX carry and Treasuries look like biggest culprit) with the green ovals showing the reconnections to a longer-term CONTEXT and ES in this same post-NFP print region 1340-1350 for the ES.

Charts: Bloomberg

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Mon, 02/13/2012 - 13:00 | 2153924 battle axe

Perhaps someone knows something is coming? Greece deeper in the shit then we think? One of the major European banks about to go boom? take your pick......

Mon, 02/13/2012 - 13:02 | 2153935 whatsinaname

There was some RANSquawk news about France's AFM allowing short sales again starting today - hint hint ??

Mon, 02/13/2012 - 13:09 | 2153944 falak pema

on 10 major stocks for the time being!

Euro financials are on Ecb steroids so don't disturb them. If Greece retrovirals or Portugal dumps a load or Italy splutters they'll fall like Newton's apple.

Mon, 02/13/2012 - 13:13 | 2153972 Manthong

I don't recall a lot a talk about this...

Did it get lost in all the jubilation about fixing Greece?

S&P Downgrades 34 Italian Banks After Reducing Nation’s Rating
http://www.businessweek.com/news/2012-02-13/s-p-downgrades-34-italian-banks-after-reducing-nation-s-rating.html

Mon, 02/13/2012 - 13:25 | 2153989 SheepDog-One

Well it was talked about on Zerohedge right when it happened anyway. Of course, everyone was too caught up in all the euphoria and unicorn farts with US equities to notice. Besides, none of it matters anyway, we're havin a party here! Got to get US equities back over all time record bubble highs to get the ObaMao back in....this will be a year anyone with any shred of sanity will wish he hadnt lived thru.

Mon, 02/13/2012 - 14:55 | 2154489 i root for that...

i root for that fat jersey governor's picture

let's say this again:

Tyler, this site, and whoever keep putting their heads in the sand are totally screwed. These guys are in such a denial (with their pocket shrinking betting against the market) that they are no different from Al Gore and his "man-bear-pig" thing.

cheeeeeeeeeeeeeers!

Mon, 02/13/2012 - 13:08 | 2153940 TruthInSunshine

Jean Luc-Picard: Engine room, this is Captain Picard. Is the ECB-CERN Printmaster ready?

Engine/Printer Room: Aye, Capitan!

Jean Luc-Picard: Engage!

Mon, 02/13/2012 - 13:01 | 2153928 Conman

Meanwhile in the US, CNBC has a dog picking JPM as a hot stock and BAC over 8$.

Mon, 02/13/2012 - 13:01 | 2153932 CvlDobd

Post Thanksgiing rally had been on nothin but various bailouts between bank swaps and central bank cash infusions. It's complete shit.

So this is still bullish?

Mon, 02/13/2012 - 13:19 | 2153999 SheepDog-One

Hey all you need to do is take out ONE tiny letter to change bullshit to bullish!

Mon, 02/13/2012 - 13:33 | 2154028 Theta_Burn

Sovereigns bank-rupt, and/or on fire, tear gas inventories depleted, Isreal - Iran chests pressed together and pushing each other to see who will swing first, real inflation @ 10% plus the US needing another trill and a 1/2 just to keep the lights on for another yr.

.30% swings in currency value move this market up/dn more than a 70% Greek default / Italian bank(s) downgrade(s)

Repeat after me "don't fight the fed/OR the ECB...

Soon, soon... it will be 'dont fight the lead...

Mon, 02/13/2012 - 13:03 | 2153936 slaughterer

UniCredit got slaughtered today on the Mibtel.

Mon, 02/13/2012 - 13:05 | 2153941 LongSoupLine

Patel from Wells Fargo Money Harvesters on Bloomberg saying go to equities for "value". F'ing Horseshit!!

Mon, 02/13/2012 - 13:08 | 2153948 Shizzmoney

US and International Banks killing it in stocks today.

Eroding democracy = bullish for banks.

Mon, 02/13/2012 - 15:08 | 2154380 earleflorida

here's a reality check:

"The End of Wall Street as We Know It" by Gabriel Sherman N.Y Mag. 2/7/12

http://www.nymag.com/news/features/wall-street-2012-2/index2.html

Sherman articulates his posit on the mid 80's, too present, in what seems a very accurate assessment [jmo] of Dodd-Frank via Volcker Rule implementation July/2012 and the rebranding of the once mighty N.Y. Financial District as a mundane back-to-basic's pragmatic financial hub. the only caveat being Romney's willingness to relegate Dodd-Frank to the trash-bin once elected.

Note: The TBTF's are doing their mightiest to rework or destroy any meaningful attributes embedded in this 2000 plus page pedigree plume of plasma chance, by bombarding it with "negatively-charged [?]" positive electron fiat's in the town that, "Billy Sunday Couldn't Shut Down"

ie) 'i smell a rat, a tappin the k-street rant,... pathetic all who nip their chant, on a stripped piece of malevolent harmony scrap - a brandish stink from the stoop's undercarriage - those whorish sewer's, deceased with carnage, chewing and gnawing an embryonic chord of the postmortem poor'

Mon, 02/13/2012 - 13:08 | 2153949 valley chick

geez.....who would have guessed. Thought with Greece they would rally to the moon! /sarc

Mon, 02/13/2012 - 13:16 | 2153966 atomic180

If this is the biggest bounce well see out of a Greece bailout, maybe its time Germany and the other N. European countries cut the cord. Greece isn't serious about deficit reductions and wants to take the money then re-negotiate and the hole is only growing deeper. Its going to be some serious short term pain encountered by the banks/insurers but at some point lets walk away from this fiasco and get on with life...

Mon, 02/13/2012 - 13:22 | 2154010 Olympia

The greatest private fraud of human history.
Who are the great fraudsters who are becoming the murderers of the human kind? How does the economy "illness" threaten Democracy and the freedom of people?

http://eamb-ydrohoos.blogspot.com/2012/01/global-debt-crisis.html
---------------------------------
By knowing what happened in indebted Greece, where loan sharks created “bubbles” and the current inhuman debt, one can understand the inhuman plan in total ...understand where this plan started just to bring all states at the same end ...understand how this type of plans are established...

Mon, 02/13/2012 - 13:14 | 2153976 slaughterer

Another word for "bottomless pit" is abyss.

Mon, 02/13/2012 - 15:27 | 2154622 Zero Govt

another word(s) for bottomless pit is New York Bwankers

Mon, 02/13/2012 - 13:15 | 2153981 SheepDog-One

Fuck Europe....US equities are about to set all time high records and thats all that really matters, who gives a rats ass! WAHOO party ON!

Mon, 02/13/2012 - 13:21 | 2154007 Olympia

Germans are proved to be the easy solution to breach Europe’s door. Whoever wishes to “set foot” on Europe and demolish it, the only thing he has to do is to “fool” the Germans. For a second time in less than fifty years, Europe’s idiots become the victims of foreigners and they serve their interests at the expense of Europe …it is for the second time that they take money from foreigners and they turn against their European “brothers” under their lenders’ orders …it is for the second time that the family’s fool takes “candies” from the “#r” of the neighbourhood in exchange to get him into the “bedroom” where the younger “siblings” sleep …In the “bedroom” which is common today due to the European Union...

Germany handed all the European countries over to the Jewish loan sharks, by naively believing that this way they would let Germany free. Germany put the European family at the “target” of the “markets” and it is collecting profits every time one of its members gets “executed”. The loan sharks who pretend to be the “hunters” are shooting safely in the European “hen house” because Germany has managed to “raise walls around” Europe. One after the other, Europeans are destroyed so that Merkel can pay the stupid and artificial German debts to the loan sharks.

As in all previous instances, once again its “fairy tale” is extremely misleading. Nazi Germany who used to destroy Europe in the name of the Greek ideals, does the same thing today. The surrendered, corrupting, competitive after receiving subsidies and extremely anti-European Germany pretends to be the unrivalled European power that fights for the European unity and against the corruption. This country that took advantage of the unification to serve its national interests, requires from the other countries to sell themselves out in the name of this unification. This country that even today keeps corrupting anyone around it, it threatens the corrupted ones. It “vomited” over a whole continent and now it is looking for the “spot” on its victims to punish them.

http://eamb-ydrohoos.blogspot.com/2012/02/germany-disgrace-of-europe.html

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Authored by PANAGIOTIS TRAIANOU

Mon, 02/13/2012 - 13:42 | 2154077 hyper-critical

The terms agreed upon last night are the final terms Greece will fail to meet, giving the EU cover to politely suggest that they leave the eurozone. The final act of this coordinated charade has finally begun.

btfd.

NOT!

Mon, 02/13/2012 - 14:38 | 2154414 flyonmywall

But, but, Greece passed the new new new austerity package to get the bailout ! We are all saaaaved !

Now we can go to S&P 1500 ! Yeeeey !

If you believe that, I have some fertile Arizona desert...errr...farmland to sell you. All you need to do is add water !

Mon, 02/13/2012 - 15:44 | 2154694 Zero Govt

read yesterday a very sound point: that the ECB were issuing funny money at 1% obver 3 years for the banks to effectively double-up (or double-dumb?) on sovereign debt

So any sovereign that goes bankrupt and there's an even BIGGER banking-sovereign-ECB collapse than before the 'solution'

just as Greece poses an even bigger problem now post the 1st bailout a year ago

the clowns are kicking the can but the ECB, banks and Govts are just ever bigger elephants in the room all balancing on pencils and inter-connected like never before up on high wire cord

..one piece fails in this ECB 3 Year Project and the whole shebang explodes so fast calling 20 Bank Holidays won't fix it

Thu, 02/23/2012 - 05:10 | 2188298 sikefeier0728