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European Stocks Revert Back Down To Credit's Pessimism (As 2Y Swiss Drops To Record Lows)

Tyler Durden's picture




 

Just as we noted yesterday, the ludicrous late-day ramp in European equity markets relative to the absolute nonchalance of credit (corporate, financial, and sovereign) markets, has now reverted totally as broadly speaking Europe ends the day in the red. Spain and Italy stock indices bounced a modest 0.5% on the day as the UK's FTSE and Germany's DAX suffered the most (down 1-1.5%) on Banking Lie-Bor drama and unemployment respectively. Corporate credit leaked a little wider on the day with the investment grade credits underperforming (dragged by weakness in financials). Financials were notably weak with Subordinated credit significantly underperforming Senior credit (bail-in anyone?). Sovereigns were weak overall (not just Spain, Italy, and Portugal this time) as Spain's 2s10s has now flattened to year's lows. Swiss 2Y rates dropped further - to record closing lows at -35.2bps (after being -39bps at their best/worst of the day - suggesting all is not well, and Bunds largely tracked Treasuries as the SCOTUS decision came on and pushed derisking across assets. EURUSD tested towards 1.2400 early on but is holding -35pips or so for now at 1.2430.

European stocks (blue) came and went from yesterday's exuberance as credit stayed neutral. The light blue (subordinated financial credit) underperformed quite notably...

But sovereigns continue to push higher in yield and spread (and even non-peripheral names are leaking now)...

 

Swiss 2Y Rates dropped to new record lows (hitting -39.1bps at its best/worst of the day)...

 

Charts: Bloomberg

 

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Thu, 06/28/2012 - 11:50 | 2569176 LawsofPhysics
LawsofPhysics's picture

Time for the swiss to defend that peg again.  Good fucking luck.

Thu, 06/28/2012 - 11:50 | 2569177 Careless Whisper
Careless Whisper's picture

The Careless Whisper News Update & Threadjacking

 

Hedge Fund Front-Runs JP Morgan Chase

One such fund, Blue Mountain Capital Management, has been accumulating trades over the last couple of weeks that might help reduce the risk of the bets made by JPMorgan in a credit index, according to interviews with more than a dozen credit traders. The hedge fund is then selling those positions back to the bank. A Blue Mountain spokesman declined to comment.

http://dealbook.nytimes.com/2012/06/28/jpmorgan-trading-loss-may-reach-9-billion/?hp

FLASHBACK: Chief Justice Roberts Has Siezure, Falls On Head

http://www.washingtonpost.com/wp-dyn/content/article/2007/07/30/AR2007073001119.html?hpid=topnews

FLASHBACK: Obama Takes Oath Of Office In Evening Do-Over After Chief Justice Roberts Mixed Up Words

http://articles.cnn.com/2009-01-21/politics/obama.oath_1_oath-president-obama-chief-justice-john-roberts?_s=PM:POLITICS

San Bernadino CA To Sieze Mortgages (MBS) At Fair Market Value Write-Down Under Eminent Domain

http://www.sfgate.com/realestate/article/Municipalities-mortgage-seizures-raising-concerns-3668198.php

 

 

 

 

Thu, 06/28/2012 - 11:55 | 2569208 LawsofPhysics
LawsofPhysics's picture

CW, #3 is notable.  ALL economies are local and possession is the fucking law at the end of the day.  

Thu, 06/28/2012 - 12:05 | 2569311 NotApplicable
NotApplicable's picture

That'd be #4. But you're correct, as long as they got the guns, they're gonna eminent domain some mofos.

Robin da Hood, bitchez!

Thu, 06/28/2012 - 12:08 | 2569337 LawsofPhysics
LawsofPhysics's picture

Correct, #4, sorry for the confusion.

Thu, 06/28/2012 - 16:53 | 2571058 earleflorida
earleflorida's picture

7 years past and nothing but utter devastation ie., "Sherman's neckties" showing up mysteriously all over this land? 'this land is my land, this land is your land',...   http://www.reason.com/blog/2010/06/23/fifth-anniversary-of-kelo-v-ne

thanks cw

Thu, 06/28/2012 - 11:51 | 2569184 GeneMarchbanks
GeneMarchbanks's picture

Ah, of course, thank goodness for those arrows otherwise I'd be lost.

Thu, 06/28/2012 - 12:07 | 2569321 NotApplicable
NotApplicable's picture

I'm not so sure about your assumptions.

Thu, 06/28/2012 - 12:05 | 2569305 Conman
Conman's picture

still no fear in the market. All economic indicators say economies are tanking yet markets are teflon, and just bid up with algos when the vol dissapears. Such a farce.

Thu, 06/28/2012 - 12:08 | 2569335 Quinvarius
Quinvarius's picture

This is just like...just like...Zimbabwe!

Thu, 06/28/2012 - 12:46 | 2569612 Village Smithy
Village Smithy's picture

No fear is exactly what it is all about. For $2 trillion bernanke has managed to remove a key counter balance from the market machine. Outcome: unknown

Thu, 06/28/2012 - 12:08 | 2569336 evolutionx
evolutionx's picture

CDS on banks explode again

 

http://www.cds-info.com

Thu, 06/28/2012 - 12:14 | 2569375 dingoj
dingoj's picture

Is it me or is everything so fucking uninteresting for the moment?

Thu, 06/28/2012 - 12:17 | 2569395 slewie the pi-rat
slewie the pi-rat's picture

broadly speaking: risk0ff

Thu, 06/28/2012 - 12:57 | 2569684 Bastiat009
Bastiat009's picture

Stocks outperform gold yet again and yield dividends too. Gold has been falling for nearly a year now. And yes US treasuries and the US$ have been massively outperforming gold over that period. I won't find out why here but I'd love too.

Thu, 06/28/2012 - 13:12 | 2569752 eclectic syncretist
eclectic syncretist's picture

Gold and silver have been consolidating for over a year and are ripe for a breakout soon.  Exactly when is anyone's guess, but like they say, "when it seems everyone else is fed up, discouraged, and has sold out, that's a good time to buy". All fiat money is based on debt, and if/when debt scares people they will begin to reject it and turn to something more secure, like gold/silver/tangible commodities.  It's happened over and over again throughout history, and is already arguably overdue this time.

My target for a silver takeoff is from $25/ounce, but I'm accumulating now, as I don't intend to sell anytime soon.  Might just pass it on to the kids if things work out.

Thu, 06/28/2012 - 17:04 | 2571105 CitizenPete
CitizenPete's picture

OK, so anyone with half a brain and a modicum of financial knowledge understands that the markets are a rigged game (literally -- from robo-trades, to under the table deals, to Lie-or fraud, etc..), that the interest rates and fiat based credit system are a fantasy (70 TRILLION in sovereign and credit DEBT literally levered to 700 TRILLION in derivatives).  

 

So the collective sheep (a.k.a citizens, or as in the U.S.: "chattel") use the same forms of credit backed "money" (debt) that the banks plunder and gamble with everyday, yet it is the people (a.k.a. "the collective") that makes it all possible through a blind faith in some strange monetary religion of exchange. Even David Fisher the President of the Dallas Fed stated several years ago that the only thing giving the Dollar value was blind faith of the people.   Like some sky-God who the faithful majority worship, sight unseen, they BELEIVE in the currency and the credit system -- in stocks and bonds issued by banks and companies who should be bankrupt if it were not for the shifting and modified laws and rules by politicians and the "regulators" allowing the system to continue.  Corrupt beyond the law? -- just change the law.  More and more duct tape over the rust and pretty soon its just duct tape - it all duct tape.  If they just spray paint over the tape the Sheeple will bleat on joyously, content to exchange and trade and live under US drone surveillance another day.  The MIC and Robber Barons thrive off 'Merican Stupidity.

This is why the economic system will NEVER break, it will never implode or crash.  The sheeple accept inflation not only in the form of cost; but in the form of shrinking: jars, cans, grocery bags; higher percentages of fuel additives like Ethanol (paid for not at the pump, but in taxes), government hedonics,  BLS lies, etc, etc...  

"Did ya here? We gots FREE healthcare approved today, free from Obamney, Gud bless em" 

The "economy" (whatever that means) will never just crash into the dirt leaving my stash of PM shining erect with it extremes of relative value.  Gold and silver can never have more value to the banks and the elite as the Stupidity Index.  The fear of a hyperinflation in the US like a Zimbabwe or a Weimar are far fetched IMHO.  Why? - the US stupidity index.  Forget "Consumer Confidence" that's a measure of how much Sheep are spending, when what is needed is if people wake up and ask WHAT they are spending (or exchanging).  The Stupity Index is what the banks, politicians, elites, and do I dare say it? - religious leaders, count on to stay in power.  Without the high level Stupidy (in what ever form: ignorance, apathy, blind faith --choose your flavor, it maters not).  This is why Greece and the EU train wreck keeps going well after the track has ceased to exist.  This is why the crash in the US will NEVER come.  Even if does, and the system resets? reemerges?whatever?, there will be plenty sheep spending and borrowing bits of paper or some other such BS, just because they are stupid enough in a large enough collective (lets just call them the 99% who "wanting to eat the rich") to let it happen over and over again. 

 

Today's Stupidy Index:  HIGH  

(in fact, it is so high it is impossible to measure in most of the US) 

 

Barnays would be proud! Primitive sexual and aggressive forces are still being leveraged by the elite today.

OBAMNEY 2012!  Different Piles Same Crap

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