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Italian 10 Year Bond Price Almost An 8 Handle

Tyler Durden's picture


Stunned horror, even from the ECB which is not even pretending to be able to put a floor under Europe's fulcrum security - the Italian 10 year. Popcorn not optional. If this thing hits 8X, cue panic. It also appears, that contrary to Fast Money's expectations, the dump in BTPs was not "entirely driven" by MF liquidations, and the bankruptcy was not a "wildly bullish" event.


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Tue, 11/01/2011 - 08:13 | 1831225 Fips_OnTheSpot
Fips_OnTheSpot's picture

i love the sound of BOOM in the mornings..

Tue, 11/01/2011 - 08:17 | 1831241 Motorhead
Motorhead's picture

Me, too, but my wife sure doesn't.

Tue, 11/01/2011 - 08:31 | 1831291 Carlyle Groupie
Carlyle Groupie's picture

S&P's down 30+ premarket.

Tue, 11/01/2011 - 08:38 | 1831336 GeneMarchbanks
GeneMarchbanks's picture


I know I don't say this enough: I love your updates.

Tue, 11/01/2011 - 08:48 | 1831392 Leopold B. Scotch
Leopold B. Scotch's picture

I hear a distinct "Plop.  Plop."

Soon it'll be time to flush.

Tue, 11/01/2011 - 08:39 | 1831342 Chris Jusset
Chris Jusset's picture

Yes, the sound of BOOM is lovely ... but doesn't have quite the punch as the sound of KABOOM in the morning ...

Tue, 11/01/2011 - 08:32 | 1831293 paarsons
paarsons's picture

Good Citizens of Metropolis!


You're fearless leader needs a virtual hug.

I'm afraid.  All my money is tied up in Korean won.  If Europe shits the bed, I'm screwed.

Let's all pray the ECB fires up the printing press--for my sake.

Tue, 11/01/2011 - 08:32 | 1831294 HelluvaEngineer
HelluvaEngineer's picture

I was expecting the following ZH headline this morning: "'s gone"

Tue, 11/01/2011 - 08:13 | 1831226 cossack55
cossack55's picture

Orville Reddenbacher may be a good short term bet.

Tue, 11/01/2011 - 08:14 | 1831227 Zola
Zola's picture

In the meantime Gold selling off, i will be looking with delight for the repeat of the Sept 2008 epic 1 day move ...

Tue, 11/01/2011 - 08:16 | 1831237 EL INDIO
EL INDIO's picture

Sadly, I have to say amen,

I got some dollars to burn.

Tue, 11/01/2011 - 08:23 | 1831260 OutLookingIn
OutLookingIn's picture

Don't to hastey!

This low may just be a momentary spike, then the discovery that the USD is not all it's cracked up to be and liquidity floods back into PM's. Safety is key here.

Finger now poised over speed dial!

Tue, 11/01/2011 - 08:19 | 1831249 Sudden Debt
Sudden Debt's picture

Yep, I just moved my money into dollars for the next few weeks/months so I can profit from this selloff.

Gold and silver are so heavely linked to the euro because the eurobanks are loaded with it and use it as a hedge to protect themselvess that such a drop always pushes PM's down.

And as they will all pretty much go down to near zero pretty soon, PM paper will also crater, creating a very nice oppurtunity :)


Tue, 11/01/2011 - 08:24 | 1831265 nontaxpayer
nontaxpayer's picture

And when PM paper craters, try taking the physical delivery and see if you get any, and at what price...

Tue, 11/01/2011 - 08:29 | 1831287 disabledvet
disabledvet's picture

noooooooo! "commune with your inner fur ball."

Tue, 11/01/2011 - 08:30 | 1831279 disabledvet
disabledvet's picture

i do not agree. "don't be hasty" indeed. Morgan's smoking his Cohiba. "Slow burn" as they say.

Tue, 11/01/2011 - 08:32 | 1831299 HelluvaEngineer
HelluvaEngineer's picture

I lightened paper trades yesterday.  However, I think we will only get back near (not to) the recent lows.  Everyone is thinking the same thing.

Tue, 11/01/2011 - 08:40 | 1831350 s2man
s2man's picture


Tue, 11/01/2011 - 08:15 | 1831230 GeneMarchbanks
GeneMarchbanks's picture

Ummm ISDA says it's not a credit event so why should I care?

Tue, 11/01/2011 - 08:17 | 1831243 achmachat
achmachat's picture

By design, credit events don't officially exist anymore. Stop waiting for one.
It's all good, good, good... until total anihilation. Nothing exists inbetween.

Tue, 11/01/2011 - 08:28 | 1831281 Ghordius
Ghordius's picture

because CDS should be banned anyway

if there is a serious "credit event", the insurer can't pay. Well done, financial innovation.

Tue, 11/01/2011 - 08:30 | 1831290 disabledvet
disabledvet's picture

and now you see the result. "Ain't got 5 billion? Come up with a trillion then."

Tue, 11/01/2011 - 08:32 | 1831298 GeneMarchbanks
Tue, 11/01/2011 - 08:39 | 1831322 Ghordius
Ghordius's picture

crack dealers - interesting article, GeneMarchbanks, it sums it up:

"Five banks -- JPMorgan, Morgan Stanley, Goldman Sachs, Bank of America Corp. and Citigroup Inc. -- write 97 percent of all credit-default swaps in the U.S., according to the Office of the Comptroller of the Currency. The five firms had total net exposure of $45 billion to the debt of Greece, Portugal, Ireland, Spain and Italy, according to disclosures the companies made at the end of the third quarter. Spokesmen for the five banks declined to comment for this story."

This total net exposure is a bit small, how much have their clients? A profitable business, indeed.

Tue, 11/01/2011 - 08:42 | 1831358 GeneMarchbanks
GeneMarchbanks's picture

'crack dealers'

I don't disagree. Still, it goes to show the complete and udder belief in CDS.

Interesting times friend...

Rosie on Bloomberg just FYI

Tue, 11/01/2011 - 08:14 | 1831231 Sequitur
Sequitur's picture

Lewlz look at that chart. You're going to have to resize those Bloomberg screens pretty soon.

Tue, 11/01/2011 - 08:15 | 1831232 Sudden Debt
Sudden Debt's picture

Jezus, every European bank is crashing right now, it's like a "credit event" on it's own right now.

And the euro is also going down pretty fast, so PM's will also get hammerd for the rest of the week.


Tue, 11/01/2011 - 08:19 | 1831246 Motorhead
Motorhead's picture

You mean all those banks that passed those "stress tests" with flying colors?!?

Time for Grimbergen or Chimay blue.

Tue, 11/01/2011 - 08:22 | 1831254 Sudden Debt
Sudden Debt's picture

They're now vometing flying colors right now :)

And indeed, the weather is nice today so this calls for a good beer and some nuts.


Tue, 11/01/2011 - 08:36 | 1831321 Spigot
Spigot's picture

Not a pretty sight. Looks like an entire continent is flash crashing.

Tue, 11/01/2011 - 08:41 | 1831355 cowdiddly
cowdiddly's picture

Its cold and rainy here. Which also calls for some good beer and some nuts

Tue, 11/01/2011 - 08:53 | 1831425 TuesdayBen
TuesdayBen's picture

70 degrees and no wind here in my office... good time to crack open a beer and some lightly salted nuts

Tue, 11/01/2011 - 08:16 | 1831234 Hephasteus
Hephasteus's picture

So. Italian government orders 8 or 9 ipad hookers and it's fixed right?

Tue, 11/01/2011 - 08:19 | 1831248 EL INDIO
EL INDIO's picture

ipad hookers : what's that ?

do they work for ipads or do you just get to see them on an ipad ?

Tue, 11/01/2011 - 08:26 | 1831264 Ghordius
Ghordius's picture

you see them on your iPad and you organize a meeting with them,

if you are an Italian MP.

It's a reference about a "scandal" in Italy where journalists noticed what one MP was doing on his iPad while his whip was addressing the chamber...

Tue, 11/01/2011 - 08:25 | 1831267 SilverIsKing
SilverIsKing's picture

Hookers is an iPad app that flips your charts upside down and changes the color red to green. Now that I downloaded it, I'm quite bullish.

Tue, 11/01/2011 - 08:28 | 1831282 Sudden Debt
Sudden Debt's picture

you know, the slide to unlock kind of types

Tue, 11/01/2011 - 08:18 | 1831244 HD
HD's picture

Forgive the schadenfreude but...

Tue, 11/01/2011 - 08:20 | 1831250 mayhem_korner
mayhem_korner's picture



Does the risk-yield relationship hold any water at this point?  When all sovereigns are bankrupt, why does the US 10-yr yield 600 bps below Italy's?  Are either of these going to make good at expiry?

Tue, 11/01/2011 - 08:20 | 1831251 SixFeetFromTheHedge
SixFeetFromTheHedge's picture

For some reason I just saw the ES-mini plung to 1212.5 and is now back to 1218.5. This happend within a few short minutes.

Any ideas what happened?

Tue, 11/01/2011 - 08:26 | 1831269 mayhem_korner
mayhem_korner's picture



Prolly just a pre-open test for some new "no-news-no-volume" algo to be launched around 3pm to float the S&P up from 1185 to 1201 by close.

Tue, 11/01/2011 - 08:23 | 1831258 firstdivision
firstdivision's picture

QE3 annoncement in tandem with EFSF announcing 4 trillion euro leverage by next week.  Over/Under?

Tue, 11/01/2011 - 08:26 | 1831268 1835jackson
1835jackson's picture

Touche! They will print...never let a good crisis go to waste!

Tue, 11/01/2011 - 08:28 | 1831280 mayhem_korner
mayhem_korner's picture



Under.  Threat of QE is enough to fade the Euro-bux print-o-matic and keep the dollar from running too far afield.  Benny's not going to print until he absolutely HAS to, and I don't think we're there yet.

Tue, 11/01/2011 - 08:33 | 1831300 disabledvet
disabledvet's picture

i say long shot. "100 to 1." you know who is pushing it of course...

Tue, 11/01/2011 - 08:33 | 1831303 HelluvaEngineer
HelluvaEngineer's picture

Uh, what does gas cost again?  Even football fans can figure that one out.

Tue, 11/01/2011 - 08:23 | 1831259 TooBearish
TooBearish's picture

TYLER- time for the Deer in the Headlights picture with the ECB and IMF featured....

Tue, 11/01/2011 - 08:27 | 1831274 Flounder
Flounder's picture

SocGen down over 20% from its close on 10/29.

Tue, 11/01/2011 - 08:27 | 1831275 Börjesson
Börjesson's picture

Could someone please explain the significance of this? Is this the real deal, or just another of the ten-a-day ZH "OMG it's the end of the world" posts?

Tue, 11/01/2011 - 08:31 | 1831295 firstdivision
firstdivision's picture

If Harry Wanger was here, he could explain it better than I could.  In summation, it would be along the lines of, "ZOMG Italian bonds are sooooo undervalued.  Buy them and AAPL".

Tue, 11/01/2011 - 08:33 | 1831302 Ghordius
Ghordius's picture

remember the story of "the boy who cried: wolf!"?

there is a good chance that it will be only another post - but there is the chance that he is right and this is the straw that brakes the camel's back. My money is on the camel taking quite a while to go fully down, if this helps you...

Tue, 11/01/2011 - 08:34 | 1831307 Spigot
Spigot's picture

Take it as you wish. IMO this is the real deal. It is the trigger for revulsion on the part of those who move money for a living. The market WILL find weakness and exploit it, then move on. Question is, "What happens if the limb they are sawing is the one we are all sitting on?"

Tue, 11/01/2011 - 10:39 | 1832182 Abitdodgie
Abitdodgie's picture

Nothing is going to happen , please go back to working for your taxes.

Tue, 11/01/2011 - 08:35 | 1831311 Flounder
Flounder's picture

Previously the highest interest rate ever on the Italian 10 yr was 6.22%.  Right now its at 6.257% an all time high.  By some observations Italy can't afford to finance its 10 yr debt at 5% let alone above 6%.  Italy can't afford this and they have lots of debt to rollover.

Tue, 11/01/2011 - 08:38 | 1831330 nedwardkelly
nedwardkelly's picture

It's another of the ten a day 'zomg the end of teh world' posts.

But that doesn't mean it's not (or they're not) the real deal. Pretty much all these posts are 'the real deal'. What you have to account for though is the powers that be coming out with some new half assed, half cocked, 'plan' to extend and pretend a little longer. If they can come out with some more BS, maybe it'll hold things together for a bit longer. If you've been paying attention though, the amount of time all the 'talk' has had a positive effect has gotten shorter and shorter and shorter.

All you need to ask yourself is whether global debt levels (sovereign, private, doesn't matter) are sustainable. Unless there's significant growth EVERYWHERE then it absofuckinglutely isn't sustainable. It'll come crashing down at some point, you will be a rich man if you can pick exactly when.

So yeah, it's the real deal.

Tue, 11/01/2011 - 08:50 | 1831402 Börjesson
Börjesson's picture

Thanks! I have no doubt that it's all gonna come crashing down before very long. I just wondered if this post signified that that time was now rather than "sometime soon". But I guess not, it's just another step on the downbound stairway.

Tue, 11/01/2011 - 09:17 | 1831618 nedwardkelly
nedwardkelly's picture

Well, this post could actually signify that the time is now, but I doubt it. A lot of people have made a lot of money from the status quo over the last 30-40 years, and there's bucket loads of money to be made (by them) the longer they can maintain it. Think about all the growth that has been fueled by debt... All the beneficiaries of all this debt. There's a lot of money at stake to keep things going...

US Debt is nearly 15 trillion dollars. That's 15 trillion dollars that has made it's way from future taxpayers into someones pockets... those someones pockets aren't the average joe. That's a pretty big incentive to not have it all blow up.

I could be wrong, maybe today is the day, but I've been continually shocked by how much bad news the markets can ignore, so wont really be surprised if we're green in a few days.

I hope I'm right though... I just bought a new driver that an economic apocalypse might get in the way of me taking out on the course this weekend. Plus, all my post apocalyptic fantasies usually take place in the warmer time of year :)

Tue, 11/01/2011 - 08:38 | 1831338 disabledvet
disabledvet's picture

epochal battle for sure. since monetary authorities responded to 2008 by creating massive amounts of inflation there really is no answer to the collapse of the EU other than "you gotta pay for that." well we literally see the answer: "riots in the street." eventually the "fiat" money is replaced by "fiat" the car so to speak.

Tue, 11/01/2011 - 08:28 | 1831276 OutLookingIn
OutLookingIn's picture

One sure bet -

Somebody gointa getta hurta real bad!

Tue, 11/01/2011 - 08:29 | 1831286 mayhem_korner
mayhem_korner's picture



I'm a-gonna make 'im a Euro he can't refuse...

Tue, 11/01/2011 - 08:28 | 1831283 Cult_of_Reason
Cult_of_Reason's picture

Holy Cow!

Italian 10-year bonds are almost hitting 8% handle (Greece, Ireland and Portugal needed an emergency bailout when their yields hit 7% handle, Italy is well above this critical threshold).

Tue, 11/01/2011 - 08:32 | 1831296 Quintus
Quintus's picture

Tyler is referring to bond price, rather than yield, which is currently just over 6.25%

Tue, 11/01/2011 - 08:37 | 1831325 Cult_of_Reason
Cult_of_Reason's picture

Good! We have some time.

I was on my way running to the ATM machine to get some cash (not sure if the banks would open today – I live in California) before I saw your post.

Tue, 11/01/2011 - 08:30 | 1831285 wang (not verified)
wang's picture

Rosie coming up on Bloomberg radio

Tue, 11/01/2011 - 08:31 | 1831292 RyanW525
RyanW525's picture

Screw the popcorn....i'm breaking out the sno-caps for this one!

Tue, 11/01/2011 - 08:37 | 1831328 OutLookingIn
OutLookingIn's picture

Okay. So the "event" didn't occur in the dreaded month of October.

'Nervous November' has a nice ring to it. Splash Down!

Tue, 11/01/2011 - 08:38 | 1831334 PhD
PhD's picture

I fear we are standing at the very threshold of the collapse and MF Global may very well have been the spark that triggered it.

The questions are; how many trillions of dollars of derivatives were MF exposed to and how many trillions of dollars of CDS contracts, directly or indirectly, were dependent on MF Global as a third party?

If the answer to these questions is "too much", then god help us.

Tue, 11/01/2011 - 08:41 | 1831356 youngman
youngman's picture

This is quite a "non-event" according tothe powers that be....more "non-events" like this and its on like Donkey where were we...lets see...Greece is back in the headlights...With Italy catching up and soon to overtake the Island.....and Ireland drunk in the background...and the USA strangely quiet right now...but I bet there are some New York Bankers wetting their pants right now...and PM´s down...go figure....

Tue, 11/01/2011 - 08:52 | 1831424 Dr. Engali
Dr. Engali's picture

I don't have time for popcorn, I need more ammo.

Tue, 11/01/2011 - 08:54 | 1831437 cranky-old-geezer
cranky-old-geezer's picture




I've started viewing silver spot price chart as a barometer of currency printing.  It went up to 35 last few days on expectations of EFSF success which would translate to ECB printing.  Now that expectation is dashed, Fed is holding the line too, and silver is heading back down.

Over the next few days if this EU situation really does blossom into cascading collapse, which it would if ECB and Fed hold the line and people flee into dollars, I expect silver to drop down to high 20s.


Can't help but wonder if this cascading-collapse-in-the-making might be the runup to 401k confiscation.

Huge EFSF failures and MF Global bankruptcy in the past 24 hrs, ECB holding the line, Fed holding the line.   Something big is brewing here.

Tue, 11/01/2011 - 09:42 | 1831855 Grand Supercycle
Grand Supercycle's picture

As mentioned for some time, the bullish USD weekly chart continues to exert it’s influence and according to my analysis this will continue.

DOW chart showing bearish megaphone pattern warned of resumption of downtrend:

Tue, 11/01/2011 - 11:21 | 1832411 lolmao500
lolmao500's picture

The only question now is who's first to get the hell out and tell Sarkomerkel to suck it?

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