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European Sovereign Debt Shows First Weakness In 3 Months
Whether it was the truthiness of Willem Buiter's comments this morning, the sad reality of Spanish housing, or more likely the ugly fact that LTRO3 is not coming (as money-good assets evaporate), today was broadly the worst day of the year for European sovereigns. Spanish 10Y spreads jumped their most since the first day of the year, Italian yields broke back above 5% (and spreads broke back over 300bps), and Belgium, France and Austria all leaked notably wider. Since Friday's close, Italian and Spanish bonds have suffered their largest 2-day losses in over 3 months. Notably the CDS markets rolled their contracts into Monday and perhaps this derisking is real money exiting as they unwound their hedges - or more simply profit-taking on front-run LTRO carry trades but notably the LTRO Stigma has exploded in the last few days back to near its highs. European equity markets are now underperforming credit - having ridden the high-beta wave far above credit markets in the last few months (a picture we have seen in the US in Q2 2011 and HY is signaling risk-aversion rising in the US currently in the same way). Just how will the world react to another risk flare in Europe now that supposedly everything is solved?
European Sovereigns had a bad day...
Italian Spreads broke back over 300bps in a hurry...
Which was the largest 2-day rise in spreads in 3 months...
And Spanish spreads had their worst single-day move in 2 months...
But the banking sector suffered the most with the LTRO Stigma exploding over the last few days (as we suspect hopes of an infinite LTRO subside - and the CDS roll leaves unhedged players taking profits and not rolling)...
Charts: Bloomberg
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What's insane is that they were doing alright in the last 3 months. The bond markets love to ignore reality...especially in Japan, the UK, France and the US.
But, but, but Europe is Fixed?
aaple will fix this dont worry
So now that Greece is "fixed" does this mean we talk about Portugal for two years?
Yea well the way Im seeing everything is theyre stuck and had planned to be on to something else by now like this WW3 which is stuck in the amber....I really dont think they know what the fuck theyre doing at this point.
It's been kinda quiet on the WWIII front lately. Other than Obummer's new executive order to confiscate anything he wants.
Tebow to the Jets
It will work until it break. Until then, I'm not holding my breath.
So whats next, another 'It could be 10X worse than Lehman' tiny bankrupt European country to divert atention from our own disaster economy?
WTF these people should have already been hanged long ago.
See. Bankers can learn. One complete Sovereign debt assrape is all it took. Don't buy garbage debt expecting a central bank to be successful at saving you. And, If you are selling CDS, you'd better hedge with a short position.
No more money good assets for LTRO 3,4,5,...? What did Draghi say last time, the ECB collateral standards could still be very much lower than now, so why not just accept genuine toilet or printing papers as collateral the next time? Thus problem solved, rally for the next 3 months assured, Italian and Spanish 10-year below 3%- Europe is fine!!!
I guess theyre all out of candy bar wrappers for further collateral.
used condoms are next.
We all know it's a fraud, but I dare anyone to short "Euro trash".. They'll come up with some new illegal BS trick and markets will rally again. I'm sick and tired of that crap. Let's see some serious trouble for change!!
Perfect timing to save the US treasury bonds. haha, the crime ring does it again!
Quick, Bernanke and the Federal Reserve Doves throw more money at Draghi. Bailouts for years. Bernanke can save the world. start buying Italian and Spanish bonds as well.
Portugal won't scare the markets like Greece...like it or not Greece and the money they threw at this is now a roadmap...throwing more money at it only matters it you plan to pay it back, which no country can or will at this point. It will take people in the streets in Spain or Italy to get this market scared again...
http://americankabuki.blogspot.com/p/131-resignations-from-world-banks.html
Wish there were a good way for a small investor to short Italian/Spanish bonds.
How about a way to play the VIX, sitting at or close to a 25 year generational low, because there's nothing to be afraid of in this market?!?!?!
Wow!
•?•
V-V
Eurotrash.......isn't it all priced in?
everything is fine, don't worry