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Italy, Belgium Price Bonds As Yields Soar, Market Happy
The La Stampa rumor that the IMF would bail out Italy has come and gone, roundly refuted by none other than the IMF as expected, but not before lifting futures by over 30 points in the premarket session, and setting a very favorable tone to the market overnight. How long it lasts now depends on the amount of time it takes the bipolar market to realize that the tapped out consumer, already at near multi-year lows in savings, will be unable to carry this holiday period despite what the Retail Federation reported about supposedly record Black Friday sales. But for now all is forgiven and not a moment too soon: after all S&P had just downgraded Belgium which was coming to market with a new 10 year bond issuance. And courtesy of the US consumer, the auction was not a failure, yet still pricing over 1% higher compared to a month ago, or at 5.659% compared to 4.372% on October 31. Still, the bid to cover rose, and thus the modestly successful auction saw the 10 year yield drop 16bps to 5.7%, the biggest decline in a month and the first in 6 days; hit 5.91% earlier, highest since 2000. Just shortly before Belgium, Italy sold €567MM in 2.6% 2023 Inflation Linked linkers at a bid to cover of 2.16 but most importantly at a yield of 7.3%. This was an epic collapse compared to the last such issuance from October 27 when 2.1% I/Ls due 2021 priced at a 2.14 B/C and a 4.61% yield: nearly a 2.7% increase. And somehow this unsustainable yield (not to mention another BTP auction tomorrow) is considered a good thing: the 10 Year dropped to just over 7% in the auction aftermath after hitting 7.3% earlier. And for now Europe is on the backburner with all eyes on how few contracts of ES can get the S&P up 3% today: all signs of a perfectly functioning market.
More from Reuters on the Italian auction:
Italy paid 7.3 percent to raise slightly more than a minimum target of 500 million euros at an auction of inflation-indexed bonds on Monday, underlining the growing challenges it faces on funding a day ahead of a much bigger bond sale.
Rome will offer up to 8 billion euros of bonds on Tuesday, including a new three-year issue, after paying 6.5 percent to sell six-month paper at a poorly received auction on Friday -- which sent two-year yields spiralling above 8 percent.
On Monday, it sold 567 million euros of a Sept. 15, 2023, inflation-linked BTPei bond it had last issued in March 2010.
The Treasury had targetted up to 750 million euros ahead of the sale.
Traders said the limited amount placed allowed the Treasury to sell the bond above secondary market levels, where it had suffered heavy losses in recent sessions.
"The Treasury decided to issue little more than the minimum to price it above the secondary market, where we saw some buying immediately after the auction in a sign that somebody must have been left out," a Milan-based trader said.
"As for tomorrow we'll see, people are getting ever more nervous and risks ever bigger," he added.
On Monday, Italian yields fell back thanks to hopes that the euro zone's third largest economy would get international aid despite a denial by the International Monetary Fund that it was in talks with Rome on a package.
And bringing everyone slightly closer to reality, Barclays said in a note that Italy and Spain will need €500-800 billion for the next 18-24 months and that the IMF is "unlikely to have the resources." If only America could get a Black Friday sale every day...
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France is not AAA
Rating agencies are lying
I have friends in France and they all know what the freaking scam banks are doing
Please with this image i dont want to insult the french people, just is an irony of the FRENCH SOVEREIGN RATING,
http://imageshack.us/f/28/francedowngraded28thdec.jpg/
Why are you gold-bugs so unhappy.
This is what you want.
The more they print, the more money you make.
When they stop printing, we go into deflation.
Then you lose your shirts.
Explain your stance to a simpleton like me.
You want to make money, right?
http://fucklloydblankfein.blogspot.com
Deliberate troll is deliberate.
Tain't making money unless you mean "printing" money is making money. Then, well, you are right.
hahahaha
when they stop printing the system crashes. gold bugs keep their shirts, because their currency is independent of the ponzi. everyone else loses theirs.
anyway, i think stupid german monetarism is about to yield something ingenious — they won't print, so the system is going to fail. and that's a good thing, because it could lead to the thing we need — a debt reset
http://azizonomics.com/2011/11/28/death-by-hawkery/
First of all, the derogatory, "gold bugs" implies that you are the one who is not insane. Second, NO ONE is making "money". Printing and making are mutually exclusive. Those in PMs are just not losing money.
Why wuold someone try to explain anything to a simpleton...?
Fuck off,about covers it.
That's Mr. Gold Bug to you.
It's a choice; kinda like free will. Something that may in short supply. I bet you would sign a petition to ban the book 1984.
The longer Italy 10 yr stay above 7% the more confident I get on my Euro short. I have no idea where people can come up with rumours to try and squeeze me out but just when you think they can't come up with anohther one they do. Just when you think the market would finally call bullshit its decides to rally regardless.
Is there counter party risk on your short?
Too late I'm already insulted because you've stated the obvious.
All the blogging in the world cannot drive the market down. Just realize the bottom was put in almost 4 yrs ago. Euro/USD to $1.40 in a week. Buy accordingly!
Stolper?! Is that really you?
ps does the squid actually run the world or is Rastani a mouthbreather?
This is a set up.
yep but one you can profit from!
Exchanging more fiat paper for physical silver today at Thursday's price. WOOHOO, WOOHOO, WOOHOO, WOOHOO, WOOHOO, WOOHOO.
Downgrades are bullish now...
Italy managed just fine with 15 PERCENT interest rate and exactly with the same 120 GDP debt level in the early 1990's. Italy was much poorer back then. It stayed above ten percent until 95. Still no default.
public debt is only half the story. and yes, default will not come, but that is not the point
Restructuring was still an option.
Ah yes but that was the mid nineties, just before the glorious inception of the Euro, and the carefree exhale after the Soviet Union collapse. You could get a slice of pizza for 1000 lire, at the stands near the station in Rome. The air was pregnant with positive anticipation, birds tjirped, and infants smiled for no reason.
What we got now is a mist of Iodine 133 of unknown origen, a bunch of Goldman Sachs guys wielding their creative instruments, and the telltale leftovers on the furniture of multiple bunga bunga's.
Of course the "Alma Mater" will survive, but the issue now is that the banking clan wants control over the northern countries, using the PIIGS(FUK) as a lever to get there. The strenght of the EU, which was diverstity, is now being used against it, because the incompetent bureaucrats in Brussels left the door open.
I.o.w. of course this crisis is artificial. They want it all.
".....all signs of a perfectly functioning market."
You are correct sir! Ironic that the only time ZH gets anything right is when they are dripping sarcasm. Perhaps they are not aware?
didn't know that you guys at ecb are now reading ZH. well, welcome. and if you have a chance, can you forward us the daily memos, sorry orders, you receive from the squid??
LOL- apparently, you missed the entire month of November, but hey, enjoy that pre-market woody, while it lasts.......
Hey No Mas.......
Why don't you fuck off and go to a site that tells you what you want to hear...?
Like MSN or something.....
"Look Ma....
No Hands....
or brains.
Why are you even here? Idiot. Glittering jewel of colossal ignorance. Are you really as stupid as you make yourself sound, or are you just trolling out of boredom?
If you had any inkling of what Zero Hedge did and does, you would know that it takes, among other things, a bifurcated approach to viewing what is and what will be.
While showing and suggesting what should be happening during conventional times, it is simultaneously showing how THESE ARE NOT CONVENTIONAL TIMES! And if you think they are, then it is you who is the poster child for "sheeple..."
Zero Hedge does the best job possible of navigating through the madness and projecting the madnesses' possible outcomes.
I motherfucking DARE you to do better. And stay honest.
Asshole.
I hate the fact I only 13K, My salary isnt that much and I cannot buy gold bullion, you can only buy in packages; another thing I hate, It is hard for me to stay motivated, when my future is hopeless.
Saddest thing I've ever read here. Get yourself a girlfriend and/or mistress... preferably both.
Auctions succeeded. What crisis? Doomers' epic fail.
hope for you sarc, otherwise go to doc and check your memory loss (rates paid lately??)
and take your little girlfriend No Mas with you!
And in three months, Italy will be selling paper at 15%- yeah, today's action certainly is bullish........
Shut up and make money, bitching aintn making you shit!
Yep, hope you are adding to your shorts.
"I do not get it... The bread's good, croissants for breakfast and good wine."
21 Jan 1793
Louis XVI
By Giovanni Salzano
Nov. 28 (Bloomberg) -- Following is a breakdown of the second
quarter general government budget balance according to the figures
provided in their statistical database by Eurostat in Luxembourg:
*T
===============================================================================
2Q 1Q 4Q 3Q 2Q 1Q 4Q 3Q
2011 2011 2010 2010 2010 2010 2009 2009
===============================================================================
------------------------ As % of GDP* -----------------------
EU27 -5.7% -5.9% -6.6% -6.8% -6.8% -7.1% -6.9% -6.0%
Eurozone -5.5% -5.7% -6.2% -6.5% -6.4% -6.7% -6.4% -5.5%
-------------------------------------------------------------------------------
Ireland -23.4% -24.9% -31.3% -24.5% -19.3% -20.3% -14.2% -13.1%
Greece -10.2% -9.5% -10.8% -12.3% -13.6% -15.5% -15.8% -13.4%
United Kingdom -9.4% -9.5% -10.2% -10.5% -10.9% -11.5% -11.3% -10.2%
Portugal -8.8% -9.3% -9.8% -10.3% -10.5% -9.9% -10.2% -8.3%
Spain -9.2% -9.2% -9.3% -10.0% -10.4% -11.4% -11.2% -10.4%
Latvia -5.9% -6.8% -8.2% -8.8% -8.9% -9.9% -9.6% -9.0%
Poland -7.1% -7.7% -7.9% -7.7% -7.4% -7.4% -7.4% -5.8%
===============================================================================
2Q 1Q 4Q 3Q 2Q 1Q 4Q 3Q
2011 2011 2010 2010 2010 2010 2009 2009
===============================================================================
Slovakia -6.5% -7.0% -7.7% -7.7% -8.1% -8.3% -8.0% -6.0%
France n/a n/a -7.1% -7.0% -7.6% -7.7% -7.6% -7.2%
Lithuania -6.1% -6.7% -7.1% -8.1% -8.8% -9.6% -9.5% -8.5%
Romania -4.6% -5.9% -7.0% -8.2% -9.5% -9.3% -9.1% -9.7%
Slovenia -6.4% -6.3% -5.8% -6.3% -6.5% -6.4% -6.1% -5.6%
Cyprus -6.5% -6.5% -5.3% -6.3% -6.0% -5.8% -6.1% -4.7%
Netherlands -4.9% -4.6% -5.0% -5.8% -6.1% -5.6% -5.6% -3.6%
Czech Republic -4.5% -4.8% -4.8% -5.2% -5.6% -6.0% -6.0% -5.5%
Italy -4.5% -4.3% -4.5% -4.6% -4.8% -5.1% -5.3% -4.8%
Austria -3.5% -3.6% -4.4% -4.2% -4.3% -4.9% -4.1% -3.9%
Germany n/a n/a -4.3% -5.0% -3.9% -4.0% -3.2% -2.2%
Hungary 5.6% 5.2% -4.2% -4.7% -5.0% -4.3% -4.4% -5.3%
Belgium -3.6% -3.8% -4.2% -4.5% -4.6% -5.2% -5.9% -5.1%
Malta -4.0% -3.6% -3.6% -2.9% -3.4% -3.5% -3.7% -4.3%
Bulgaria -2.0% -1.6% -3.1% -4.2% -5.3% -6.3% -4.3% -5.9%
Finland -1.8% -2.7% -2.8% -3.4% -3.4% -3.1% -2.7% -0.7%
Denmark -3.0% -2.9% -2.8% -3.4% -3.5% -2.9% -2.8% -0.6%
So... what you're concluding here Dick is... this is all bullish?
Gene my friend, naturally it's all bullish. Ask Krugman. This is the neo-Keynesian wet dream. Unsustainable deficits as far as the eye can see. Borrow, spend, wash, rinse, repeat. And there You have it, the perpetual motion "growth machine". ;-)
Monday’s Euro Update: Slight Improvement in Bond Yields
http://confoundedinterest.wordpress.com
Actually, bond prices rallied and yields dropped in several Eurozoners like Italy and Belgium and the Eastern Bloc.
The us dollar index has just put a swing low in today. Eur bears had better hope this reverses before the close.
This is coupled with the obvious double top in the usd index. The eur and stocks are going to fly into mid December.