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LTRO Stigma Spikes As Sovereigns Slump

Tyler Durden's picture


As we approach the US day session open, Europe is on a similar trend to yesterday with broad market weakness. European sovereigns, most notably the fulcrum securities in Italy and Spain - but also France, are at their worst levels in three weeks with Italian 10Y back over 5% yield and Spanish 10Y back over 5.5% (near its worst level since mid January). The LTRO Stigma (the spread between LTRO-encumbered banks and non-LTRO-encumbered banks) has jumped again and is near its worst levels since the initial LTRO at over a 90bps differential. Corporate credit and stocks are also notably weaker as credit decompresses to catch up with stocks weakness as CDS roll technicals unwind.

European Sovereign Yields are accelerating - especially Spain...

The LTRO Stigma is now very close to record wides and has accelerated notably post the CDS roll...

Post the CDS roll, corporate and financials credit is catching up to equity's broad weakness...

Charts: Bloomberg

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Thu, 03/22/2012 - 09:14 | 2280032 AU5K
AU5K's picture

Could you net it out for us.  Stigma = buy stocks, right?

Same story on CNBC: "What stocks you should be buying now that the already priced in LTRO stigma has hit the markets".  See, easy.

Thu, 03/22/2012 - 13:25 | 2280912 ClevelandJanelle6
ClevelandJanelle6's picture

my neighbor's aunt makes $67 hourly on the laptop. She has been fired from work for ten months but last month her check was $20142 just working on the laptop for a few hours. Here's the site to read more ....  http://lazycash9.com

Thu, 03/22/2012 - 09:08 | 2280033 evolutionx
evolutionx's picture

Are Centralbanks in Europe Buying Gold Secretly?

Confusion about alleged increase in British gold reserves .There were rumours again yesterday that a western central bank had restocked its gold reserves or is planning to do so.



Thu, 03/22/2012 - 09:11 | 2280040 SheepDog-One
SheepDog-One's picture

Gee do they think the $10 gas avg and the fact everyone is unemployed and broke in Europe except the bankers and Troika maybe has something to do with the Europe troubles or 'Stigma'?

Thu, 03/22/2012 - 09:14 | 2280046 AN0NYM0US
AN0NYM0US's picture

listen to this knob on Bloomberg earlier today Sebastian Galy of SocGen



Thu, 03/22/2012 - 09:15 | 2280048 HD
HD's picture

Damn market fundamentals throwing a wrench into the works. Why can't people simply accept that short sighted, self serving central planners know everything and just fall in line?

Thu, 03/22/2012 - 09:24 | 2280079 SheepDog-One
SheepDog-One's picture

INSOLENCE from the peasantry mucking up Fat Bastard Bernankes benevolent works!

Thu, 03/22/2012 - 09:58 | 2280222 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

The talking head on CNBC told me everything is A-OK. I'm convinced!  Bahhhhh, bahhhh, bahhhh, sorry.

Thu, 03/22/2012 - 09:57 | 2280214 asteroids
asteroids's picture

Give it a bit of time. It took a few months after QE2 for the liquidity to dry up. LTRO2 will be the same. Just in time for Spain and Italy to come on deck. It's going to be a hot summer.

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