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Italian Banks Are 'Free'-To-Trade As Short-Sale-Ban Is Not Extended
Unlike their French counterparts, it appears the hapless (or sensible) Italian demagogues have decided not to extend the short-sale ban that was enacted three months ago. With the US Treasury market closed and volumes likely thin elsewhere, we wonder what outlet the flight-to-safety flow will take as Italian bank equity reality is unleashed. In general the CDS market took the systemic brunt of the hedging and protection-seeking since the 8/11 ban and it seems likely that Intesa Sanpaolo and Mediobanca have the most to fall to catch up with peers in equity and credit.
Equity performance of the major Italian banks since the short-sale ban:
Banca Monte dei Paschi di Siena (BMPS) has fallen the most at almost 35% while Mediobanca and Intesa have held up the best. The story is different in the 'free' CDS market:
Generally, CDS for the four major banks are notably and uniformly wider with Mediobanca outperforming (only 78bps wider) and Intesa underperforming at 144bps wider. Given the 'closeness' of Unicredit and BMPS CDS performance, we suspect the divergence in their equity market moves may compress as the equity market is opened for 'free' business tomorrow.
Furthermore, the weakness of UniCredit's CDS compared to the relative strength of its equity performance seems to offer room for compression.
Charts: Bloomberg
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futs jumped
on this news??? I thought the future is up big cuz the italians might pass the budget and oust their horny prime minister soon.
The name of the game?
Keep the balls in the air as long as possible and hope for growth.
Will growth happen. Probably not.
That's why we'll see war within the next decade.
I just hope my oldest boy doesn't join the army.
I'd hate to see him get wasted for a bunch of bankers.
http://fucklloydblankfein.blogspot.com
suicide...bitchez!
Banca di Monte Carlo should do well.
Banca di Muerto....
Italy is still alive.
Cut off a chicken's head and it stays 'alive' for a few moments.
Cut off an alligator's head and, well, see for yourself:
http://www.liveleak.com/view?i=438_1320771199
cut off the bernanks head, and, his lips are still quivering!
harakiri
Vaffanculo EU and you too America!
who replaces smaghi at the ecb? a frenchman?
Thank you all Vets for your service!!
DFAS sent their thanks to me on Saturday. Sent a "final notice" that I owe them $1341.56 from when I was recalled and sent home in Jan. 2005, and if I don't pay by the 28th they'll sic commercial collectors, the DOJ, Treasury and the credit bureaus after my ass.
First I heard of it, and a fine "Howdayadoo...."
Indeed. Without their willingness to do the bidding of their masters, for slave wages, The Corporation of the United States of America would not be able to run along its imperial course with such reckless abandon. I am extra thankful there are so many young men and women willing to die in the name of Zion in the coming months. As a token of my appreciation, allow me to suggest that all individuals currently serving forgo the opportunity to purchase life insurance, and instead put that money into /CL.
Huh? Free to short? At these levels? No way.
DOW futures surging.
If there is one thing we can say about these markets it is that they are volatile.
...and dropping. Hopefully today is more rational- I got PUNISHED yesterday.
IB has GRPN shares to short now:
http://i41.tinypic.com/6e3xqr.jpg
Ah, so the ECB has finally decided to buy shares of Italian banks in big blocks.
Panic buys. Tight ranges, CDS spreads still blown out, French bonds about to be toasted. Yeah this is where shorts will start to be fixed. a clueless market trading in the tightest bid/offer ranges say similar to Aug before the Aug 4th collpase.
Europe is a write off, Italy/Greece will leave the EU before christmas. That's it. Meantime, brutal volatlity
Some make money, others get boned without Vaseline. You can use that quote if you like.
This market is dying. Prepare.
In other words the market didn't sell hard enough on the Italian 7% blowout, so payday is due...
I mean do does anyone have faith in the fact that an economist is going to replace Silvio (won't happen though) and a former ECB jockstrap is going to replace that idoit G-Pap? Two economists are going to run Italy and Greece... What a joke.
Italian banks may soon be free PERIOD.
If anyone is still wondering why the world economy is being brought to the brink by the Euro F***tards, here it is in two sentences:
"Michael Meister, the Bundestag finance spokesman for Mrs Merkel’s Christian Democrats, said “such a shrinking process (i.e. the EU as in kicking out Club Med countries) would be deadly for Germany”. He added: “It would be a deadly development for an export country like Germany.’"
http://www.telegraph.co.uk/finance/financialcrisis/8882643/France-plots-...
Germany next for a major CDS blowout...When China unemployment goes into orbit.
But first, Mr. Market needs to take care of FrAAAnce, which is really Frbbbnce. If you haven't made (enough of) your Christmas bonus yet, you still have time:)
Pushers need junkies.
Tyler, whats the logic here? Why risk it when the short ban didnt bring harm to equities markets?
You dont have to wait for a downtick
http://www.xe.com/news/2011/11/10/2275961.htm?c=1&t=
Foreign central banks' U.S. debt holdings fall-Fed
The Fed said its holdings of U.S. securities kept for overseas central banks fell $474 billion in the week ended Nov.9, to stand at $3.442 trillion.
http://www.xe.com/news/2011/11/11/2276389.htm?c=1&t=
Portrait of MF's former CEO Corzine on sale for $85,000
He has put it up for sale at a price of $85,000 for the next week, during what Raymond calls the 'annotation period.' After that, he will raise the price north of $100,000.
Now that's rich.
http://www.xe.com/news/2011/11/10/2275221.htm?c=1&t=
Lehman ends mortgage case for 0.5 cents on dollar
Lehman Brothers Holdings Inc, which hopes next month to win court approval of its bankruptcy reorganization, agreed to a $40 million settlement of investor lawsuits claiming $7.7 billion of damages from mortgage debt.
Got screwed? Yep.
You mean there are Italian banks that aren't at zero?
The banks do not mark to market their holdings...the stockholders do not mark to market their stocks either
Welcome to OS2-IT (Operation Stir Version 2 -Italy) while OS2-GR (xxx-Greek) still hanging there. Without QE3, that's all Bennana can do to scare people into Safety of Dollar, along with OT2 (Operation Twist Version 2).
YEA I'M FREE-EEE.... FREE FALLL-IINNNNN!
the ad sucks but
petty
Curious about the logic of ending the ban on short selling too. A few theories.
1) set up an ambush/squeeze at a later date when the ban is reintroduced.
2) Give Italy banks a chance to short each other since CDS are evidetly a poor hedge. Also by trashing their equity (bonds follow) they can boost next Qs earnings DVA adjustments.
3) Short sellers will ultimately be the buyers of financials mandatory EU capital raises.
4) Banks were losing trading revs due to shorts being put on elsewhere.
ECB will support them regardless. If shorts pile in - they will indeed be squeezed. The fact the ECB is essentially broke means nothing. Bullish paper and ink...
I figured they'd of put Italy on Ebay by now... well, at least the Italian Alps...
how in the fuck are EU markets up right now?!
Magic
the ECB. they bought tons of waste from Spain/Greece/Ireland when their yields were in the 8% range. now they are doing Italy. Jim Grant must be choking on his morning coffee. IMO the ECB acting like a goverment will be their undoing...just means that GReece and Italy/PIIGS will have unlimited bailouts from ECB money printing. But Germany will end this BS very quickly...Europe is speeding towards a total collapse/EUR etc
An unelected government, with a checbook written on accounts of all those Europeans who just know that all of this is being done for their own good. When dooes the common taxpayer in the EU wake up and realize they are getig slowly fisted by these clowns?