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European Funding Concerns Keep Kneejerk Euphoria In Check

Tyler Durden's picture




 

The same robots that accelerated the selloff yesterday, are in charge of the buying this morning, as the mean reversion signals kick in, potentially with a helping hand from the Citadel/FRBNY JV. Yet the "all clear" is nowhere to be found, and in fact confidence continues to evaporate.Today, investors and risk managers have once again shifted their attention across the Atlantic, where the epicenter of this morning's unease is to be found once again in the form of European funding concerns. Exhibit A is the Euribor/OIS spread which at +5.4 bps, and rising, is now at 46.8 bps, the highest since June 2009 (see chart below). Add to this yet another day of unprecedented strength in the Swiss Franc which has now undone all SNB intervention from last week, courtesy of ongoing bank runs across Europe which will be disclosed to the broader public only once it is too late, and we are fairly confident that absent very encouraging language from the Fed, the market's focus will once again shift to Europe and its ridiculously insolvent bad bank, the ECB, at which point the algos will have no chance against yet another onslaught of global selling.

Euribor-OIS

USDCHF

 

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Tue, 08/09/2011 - 10:37 | 1542401 slow_roast
slow_roast's picture

Euroberg just ahead bitchez!

Tue, 08/09/2011 - 10:39 | 1542411 Sudden Debt
Sudden Debt's picture

damn... the captain and the officers are on vacation.... what shall we do?

 

Tue, 08/09/2011 - 10:37 | 1542403 Sudden Debt
Sudden Debt's picture

Crisis? Which Crisis? The market is up? What do you mean?

the market was down because of evil speculators blablablablablabla....

Lemmings.... you spit on their heads when you open the top floor window and they think it's just a bit of rain...

Tue, 08/09/2011 - 10:39 | 1542409 Paralympic Equity
Paralympic Equity's picture

I just saw this on BBG, but the EUR FRA/OIS spreads are still relatively tight.

I see now a market rebound lasting a couple of days, but then it will be same all, doubling down.

We can guess which bank will be the first one to go? Dexia? Unicredit?

Tue, 08/09/2011 - 10:39 | 1542414 Sudden Debt
Sudden Debt's picture

10% up and another 30% down after it.

 

Tue, 08/09/2011 - 10:39 | 1542412 DormRoom
DormRoom's picture

QE3 will stop the bleeding.. Then China will come in and buy up the expanded EFSF.  Euroland is saved.

Tue, 08/09/2011 - 10:41 | 1542421 Sudden Debt
Sudden Debt's picture

Germany just announced that the EFSF won't be expanded.

Looks like the info still needs to trickle down a bit more before the markets get the clue :)

Tue, 08/09/2011 - 10:44 | 1542436 Quintus
Quintus's picture

Got any more details on that announcement?  Is it official or an 'Unnamed source in the Finance ministry'?

Tue, 08/09/2011 - 10:45 | 1542439 ZeroPower
ZeroPower's picture

SD, German comments were made this morning. Dunno if it was good for any points on S$P but EUR dropped a few bps.

Tue, 08/09/2011 - 10:51 | 1542471 slaughterer
slaughterer's picture

If you work in Frankfurt, you have been hearing these comments steadily since last week.  

Tue, 08/09/2011 - 10:47 | 1542444 DormRoom
DormRoom's picture

It doesn't need to be expanded to 1.2T Euros.  The 400B Euro will be enough to push back the bond vigilantes, who are pushing up the bond yield.  However, legislation needs to be pass.  But when it does, bond vigilante funds will implode.

Tue, 08/09/2011 - 10:52 | 1542474 slaughterer
slaughterer's picture

Just prohibit bond vigilantism and short selling at the same time for European markets.  Problem solved.  /sarc

Tue, 08/09/2011 - 11:00 | 1542512 fuu
fuu's picture

In the centrally planned world you only buy or sell as told in the names you are told to. Otherwise it just messes up the rent calculations.

Tue, 08/09/2011 - 10:48 | 1542457 Krawallnix
Krawallnix's picture

Germany has announced so many things in the past... In the end, they did as they were told (bailout of Greece once and twice, establishment of the permanent ESM etc. etc.).  So, rightly, nobody cares about this announcement.

Tue, 08/09/2011 - 10:55 | 1542493 d00daa
d00daa's picture

lololololol, we're nowhere near a bottom with bull-tard/shit commentary like this still flying around.

Tue, 08/09/2011 - 11:03 | 1542524 SheepDog-One
SheepDog-One's picture

LOL agreed.

Tue, 08/09/2011 - 10:41 | 1542423 newstreet
newstreet's picture

'87 was a panic.  This is a sell-off.  Think of the Dow dropping 20% in a day, or stock index futures moving 30% in a day and a half - and we only had regular market hours then.  So it can be worse folks, alot worse.

Tue, 08/09/2011 - 10:46 | 1542446 max2205
max2205's picture

Overnight swing of 8% is impressive....not normal for bull markets... STFR

Tue, 08/09/2011 - 10:48 | 1542452 Caviar Emptor
Caviar Emptor's picture

In someways it's worse. A meltdown doesn't get that huge iversold bounce so easily. Without panic, there's no sense of a capitulation bottom

Tue, 08/09/2011 - 11:06 | 1542533 SheepDog-One
SheepDog-One's picture

And no ones panicking at all...as I sat for an hour in Starbucks this morning just to hear what everyone was saying, not 1 word of any fear about market drops at all. Theyre talking about pop culture, a vacation, back to school shopping. There is not a shred of fear and panic anywhere in USAA+.

Tue, 08/09/2011 - 11:15 | 1542580 ZeroPower
ZeroPower's picture

Hmm... hour at a sbux on a weekday? My guess only retirees who wake up early, kids with no summer job/class, or milfs were the clientele there. Not exactly the type of people into news and daily happenings (no disrespect to seniors).

Tue, 08/09/2011 - 10:57 | 1542501 d00daa
d00daa's picture

"it can be worse."  lolololololol, still in the shock/denial phase.  yep, nowhere near a bottom yet.

Tue, 08/09/2011 - 10:53 | 1542427 Cdad
Cdad's picture

Bob Pisani is literally stammer for some sort of idea as to why the S&P should rise once Europe closes.  That this guy still has a microphone clipped to his jacket is surreal.  

That you Pimp Pisani.

Tue, 08/09/2011 - 11:11 | 1542558 Shell Game
Shell Game's picture

Good call, btw. That's why I leave the trading to you guys.. ;)

Tue, 08/09/2011 - 10:43 | 1542431 slaughterer
slaughterer's picture

Rally to 1180 until another sell-off to 1042 before the Hole. 

Tue, 08/09/2011 - 10:46 | 1542442 Caviar Emptor
Caviar Emptor's picture

Ya see, nothing short of a blanket ECB Bailout Guarantee to all in need now, PLUS all in need in the future will work as the dominos just keep falling: Cyprus, Turkey, Hungary, Romania, Moldova, Belarus, Ukraine, Baltics, Kosovo and former Yugoslavia nations....all will need to be bailed. Then there will be a need to bail out Belgium and Denmark (yes, Denmark is in severe trouble) and finally the core itself: France and yes Germany (their debt/GDP is in the same territory as France, their economy is export-dependent and they have huge entitlements to cover. 

Tue, 08/09/2011 - 10:48 | 1542449 slaughterer
slaughterer's picture

Sssshhhh ... the HFTs might "hear" that.... let's just have our QE3 anticipation rally first....

Tue, 08/09/2011 - 10:46 | 1542443 Scalaris
Scalaris's picture

If the ticker goes green it means we are wealthy again no?

Tue, 08/09/2011 - 10:54 | 1542487 SheepDog-One
SheepDog-One's picture

I think thats the trained Pavlovian reflex, yes, if you see green, youre rich!

Tue, 08/09/2011 - 11:01 | 1542514 Scalaris
Scalaris's picture

The Magic Wonders of Ben Bernanke's Transmarginal Inhibition

- Coming Soon 

Tue, 08/09/2011 - 10:46 | 1542445 slaughterer
slaughterer's picture


PIMCO Corporate Opportunity Fund 

(Public, NYSE:PTY)

 

DOWN 15 -13% today.  Nice work, Bill.  

Tue, 08/09/2011 - 10:47 | 1542451 DaveyJones
DaveyJones's picture

is that kneejerk euphoria or bezerk nepharian

Tue, 08/09/2011 - 10:48 | 1542454 Spitzer
Spitzer's picture

financials all over the world in a bear market.

Tue, 08/09/2011 - 10:49 | 1542458 treemagnet
treemagnet's picture

I actually remember when I was a "diversified bull" believe the bullshit fed to me.  Thank God for ZH.

Tue, 08/09/2011 - 10:49 | 1542460 slaughterer
slaughterer's picture

As tribute to ROBO-TRADER, today we bought NFLX at the open.  We will dump it before noon, probably.  

Tue, 08/09/2011 - 10:52 | 1542476 SheepDog-One
SheepDog-One's picture

As a tribute to RoboTraders arch nemesis Gentleman Jim Sinclair, I bought gold at $400 making all his momo's gains look like nothing. Party on, Robo, rockin that 300 sq ft apartment like a true Mack Daddy.

Tue, 08/09/2011 - 10:50 | 1542464 SheepDog-One
SheepDog-One's picture

But but but cant we just PRINT our way out of world collapse? 

Tue, 08/09/2011 - 10:55 | 1542483 treemagnet
treemagnet's picture

We won't get panic until folks in the game doubt the Feds ability - not their willingness - but ability, and personally, even QE3 won't buy much time compounded by the fact that the bigger it is the worse its perception and the smaller it is, the perception/reality of being a "weak hands" will doom any effort.  I like silver.

Tue, 08/09/2011 - 10:56 | 1542498 SheepDog-One
SheepDog-One's picture

And certainly QE3 will be a MAJOR disappointment to all the equity crackheads...hearing talk it has to be 1.5 trillion at least? Total nonsense, what theyll get if anything at all is a small behind-the-scenes bond maintenance fund at best, not pallets of free money dropped on Wall St.

Tue, 08/09/2011 - 11:02 | 1542522 treemagnet
treemagnet's picture

And how well exactly would a total money dump be perceived by a world that already knows our market is a ponzi?  These asshats have painted themselves into a corner.

Tue, 08/09/2011 - 11:08 | 1542542 SheepDog-One
SheepDog-One's picture

Yes, how much good would any amount of proven failure QE do anyway? Has to be law of big diminishing returns at this point.

Tue, 08/09/2011 - 10:54 | 1542486 Ben Bermonkey
Ben Bermonkey's picture

Even if the Swiss Market closes on the green side today, this index was still down for 11 consecutive days (never before since inauguraation of this index). This means that the market was indeed very, very weak in the last few days. Whats more, it happened on very heavy volumes.

A sharp technical rebound can of course happen any time right now but overall picture is weak.

EURCHF gives indeed clear signs of bankruns troughout Europe. What can you say for any weahlty Greek citizen to bring parts of its assets outside his country, partially to Switzerland? May be SNB intervenes again in the days ahead and may be some folks go with them and put it back to 1.13 to 1.15. I am quite confident that from then on, things will get back weak, EURCHF to be seen even lower than now

 

Regards from the Bermonk-ey

Tue, 08/09/2011 - 10:56 | 1542497 walküre
walküre's picture

ZH site is working properly today.

I take that as a bullish sign.

Tue, 08/09/2011 - 10:58 | 1542502 juwes
juwes's picture


ENGLAND!

 

Not a shot fired by foreign terrorists!  Not a thing done by the evil alliances in the world.  Religions and secularists, all races and genders, organize against your oppressors, the wage slave masters and their attack dog lawyers who oppress us in the people's courts.

 

We need more coverage of London and we need to change the conversation away from "they took some stuff and broke things" to

 

The people who do ALL THE WORK are not slaves to be ignored and suppressed, but to be respected and even feared by those who would suppress their liberty.

 

Organize now!  And prepare for those who may riot in your area out of frustration rather than enlightenment values. 

Tue, 08/09/2011 - 11:06 | 1542537 fuu
fuu's picture

"The people who do ALL THE WORK are not slaves to be ignored and suppressed,"

 

But the rioters don't have jobs...

Tue, 08/09/2011 - 11:17 | 1542594 ZeroPower
ZeroPower's picture

+1

All they have is benefits from the state, a roof over their heads due to their parents (the kids looked 14 on TV), and their only preoccupation is stealing shoes from the shop or...in the case i just saw, bags of rice. Lol.

Tue, 08/09/2011 - 11:32 | 1542670 d00daa
d00daa's picture

what's the unemployment rate in london?

Tue, 08/09/2011 - 11:32 | 1542671 walküre
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Boot camps and labour camps will set them straight and make them fully functioning, disciplined and obedient members of society.

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