Futures Red As Reality Returns: Bailout Half-Life Now Laughable

Tyler Durden's picture


After opening and surging to up 18 pts last night (to within a tick of its 200DMA), S&P 500 e-mini futures (ES) have faded the entire gain (just as we said last night) with ES now red. European financial credit is wider on the day. EURUSD has given most of its gains back and Italian and Spanish sovereign bond yields/spreads are considerably wider on the day. US major financials have turned red after opening significantly higher. Swiss 2Y rates are at new record lows at -34bps as the USD has strengthened from 0.8% lower to only 0.15% lower now - which is having an incremental impact on Gold, Silver, and Oil - all plunging at the US day session open. So apart from all that, what did the EUR100bn of #Spailout do for all of us?

ES notably given it all up and now red...

Led by major US financials...

European financial credit now wider (lower on chart)...

and broad risk assets are selling off notably more than stocks for now (as correlation picks up systemically)...

and PMs and Oil are suffering as risk assets plunge and USD rises...

Charts: Bloomberg and Capital Context

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Mon, 06/11/2012 - 09:59 | 2514206 Cognitive Dissonance
Cognitive Dissonance's picture

The law of diminishing returns maybe?

Time to quadruple the Viagra dose. Hell, just chug the bottle.

Mon, 06/11/2012 - 10:04 | 2514233 CPL
CPL's picture

That's the direction it historically goes until governments lock up, break and it turns into Peru as a current example to point to regarding hyperinflation.


What a mess.

Mon, 06/11/2012 - 10:18 | 2514323 Chris Jusset
Chris Jusset's picture

Things will get really nasty when Spain begs for its 2d bailout (in a week or two).

Mon, 06/11/2012 - 10:22 | 2514341 maxmad
maxmad's picture

As I have been mentioning the "sucker rally" has ended!  Get ready for a blood red finish today!

Mon, 06/11/2012 - 11:12 | 2514661 Precious
Precious's picture

As history illustrates, what Spain needs is a good navy.

Mon, 06/11/2012 - 11:14 | 2514667 CPL
CPL's picture



For some reason Black Adder the Second Series pops to mind

Mon, 06/11/2012 - 12:46 | 2515142 twh99
twh99's picture

The last time Spain had a decent navy was right before they tried to invade England.

Mon, 06/11/2012 - 10:04 | 2514235 idea_hamster
idea_hamster's picture

But note that the Context model correlation will actually have to fall to close the divergence -- ES is chasing the model value down, but the gap persists.  Somebody can't sell fast enough, huh?  Guess the PPT is out of practice using the "OMFG LIQUIDATE EVERYTHING!" button.

Mon, 06/11/2012 - 10:07 | 2514251 Cognitive Dissonance
Cognitive Dissonance's picture

Buy on the rumour, sell sell sell on the news.

In fact run like hell.

Mon, 06/11/2012 - 10:09 | 2514267 EscapeKey
EscapeKey's picture

Spain (IBEX) now down over 5% from its intraday peak.

Mon, 06/11/2012 - 10:13 | 2514296 Chris Jusset
Chris Jusset's picture

The bailout half-life is now measured in fractions of an hour.

Mon, 06/11/2012 - 10:29 | 2514392 GMadScientist
GMadScientist's picture

"Time to quadruple the Viagra dose. Hell, just chug the bottle."

What'd ya say? Who's there? Huh? Why can't I see?

Mon, 06/11/2012 - 10:01 | 2514219 orkneylad
orkneylad's picture

Meanwhile in la la land, the BBC runs "Markets welcome Spanish banks rescue deal" story . . . . . oh my sides!

Mon, 06/11/2012 - 10:02 | 2514222 Dr. Engali
Dr. Engali's picture

What in the hell did they think  lousy 100 billion would do when they need trillions?

Mon, 06/11/2012 - 10:06 | 2514246 EscapeKey
EscapeKey's picture

Through the magic of leverage no doubt.

Risk? What's that?

Mon, 06/11/2012 - 10:13 | 2514292 Cognitive Dissonance
Cognitive Dissonance's picture

It's almost like they want things to fail.


Mon, 06/11/2012 - 10:02 | 2514224 MFL8240
MFL8240's picture


Mon, 06/11/2012 - 10:03 | 2514230 SilverTree
SilverTree's picture

Half-life is a bitch!

Mon, 06/11/2012 - 10:33 | 2514426 Zero Govt
Zero Govt's picture

Europe and America have been half-dead since 2008..

4 years on central bank drip-feeds, the new normal is nobody can find a pulse (or recovery) because nothing is normal anymore, we're faking an economy on fake wealth

Mon, 06/11/2012 - 10:03 | 2514232 RobotTrader
RobotTrader's picture

First item thrown overboard?  Gold and Silver

Mon, 06/11/2012 - 10:04 | 2514239 CPL
CPL's picture

Discounts before currency re-evaluation.


Make sure you aren't holding USD or anything paper on the other side.

Mon, 06/11/2012 - 10:05 | 2514242 Bay of Pigs
Bay of Pigs's picture

in the boating accident...

Mon, 06/11/2012 - 10:06 | 2514248 EscapeKey
EscapeKey's picture

Oh look it's our resident Netflix expert.

How have you been?

Mon, 06/11/2012 - 10:09 | 2514265 ruffian
ruffian's picture


where was GE, BAC, C, CSCO, INTC, MSFT for example?

where was gold?

where are they respectively now?

where do mom and pop wish they had been? 

you're an idiot..........

Mon, 06/11/2012 - 10:09 | 2514270 Ms. Erable
Ms. Erable's picture

Yes, there have been quite a large number of boating accidents where personally-held PMs have been swept overboard. Damn shame, really.

Mon, 06/11/2012 - 10:17 | 2514307 eclectic syncretist
eclectic syncretist's picture

You can bet there are many countries, where the government is not run by a central bank, that would love to see a dip in the price of gold.  The game the central banks play is fast becoming all too obvious to them, and they want the insular stability gold offers.

Perhaps the US will begin overestimating it's gold holdings in order to maintain reserve currency status.

Mon, 06/11/2012 - 10:17 | 2514315 Cognitive Dissonance
Cognitive Dissonance's picture


Can't have Gold showing strength in the face of the latest Ponzi insanity.

The system is breaking down. Soon enough they will either lose control of the Gold market or they will clamp down and try to suspend Gold trading. Desperate men always do desperate things. Always.

Mon, 06/11/2012 - 10:36 | 2514440 GMadScientist
GMadScientist's picture

"First item thrown overboard?"

Well it won't be your LULU, that's for sure!

Mon, 06/11/2012 - 11:16 | 2514684 CPL
CPL's picture



Hopefully Robo still isn't holding.  I understood the value of buy and hold until dot.com, now the only sensible place to be is be completely disloyal to brands and ticker names

Mon, 06/11/2012 - 10:39 | 2514469 GCT
GCT's picture

Robo I made a 33% return last year in PM's.  I will keep my PM's thank you. 

Mon, 06/11/2012 - 10:04 | 2514236 q99x2
q99x2's picture

Ya can't bail out a boat that is in dry dock.

Mon, 06/11/2012 - 10:21 | 2514339 Nobody For President
Nobody For President's picture

And stickin' feathers in your ass doesn't make you a chicken.

Mon, 06/11/2012 - 11:19 | 2514707 CPL
CPL's picture

It does make you a Bird Fanboi Furry though.  (Furry: Adults that dress up as animals for personal reasons)

Mon, 06/11/2012 - 10:24 | 2514351 Zero Govt
Zero Govt's picture

the question is how long can they keep these zombie banks (and Govts) half-dead?

Japan managed 20 years of this economic death on squeeky wheels, bless them!

Mon, 06/11/2012 - 10:04 | 2514237 CcalSD
CcalSD's picture

Shit! I thought BTFD was Fool Proof?

Mon, 06/11/2012 - 10:06 | 2514245 asteroids
asteroids's picture

I think the politicians are slowly waking to the reality that the pigmen have truly fucked everyone in sight. Everyone else knows and won't buy it any more.

Mon, 06/11/2012 - 11:20 | 2514713 CPL
CPL's picture

Politco's are too late in resolving it.  Now it's question of time and will power on how fast they all lose their jobs.

Mon, 06/11/2012 - 10:09 | 2514269 the not so migh...
the not so mighty maximiza's picture

This is an outrage, an outrage!!!!!!

Mon, 06/11/2012 - 10:09 | 2514271 dingoj
dingoj's picture

Time I woke up this morning there wasn't any place left to go long, so I stuck with my shorts. It can go either way: the horse is almost dead but they've doped him so much he can't stop running!

Mon, 06/11/2012 - 10:25 | 2514359 Nobody For President
Nobody For President's picture

With some trepadation, I stayed short over the weekend, hoping reality would intrude.

I'll be damned, looks like reality finally DID intrude, just as I was all primed to go long this morning. I held off just long enough, for once. I might actually make some fucking money today, for a change.

Mon, 06/11/2012 - 10:10 | 2514272 canardo
canardo's picture

We're fast approaching the point where they can throw all the money they like at it and it won't do a goddamn thing for the economy, except jack up the price of stuff we really need. Funny, today I keep having these mental images of fuses being lit.

Mon, 06/11/2012 - 10:27 | 2514349 walküre
walküre's picture

We're actually past that certain point you describe.

We crossed the Rubicon a while ago...

Now, everyone is paying attention. Whatever they do is getting scrutinized and people are asking questions. Everyone is interested.

You can't continue to run a scam and expect a return of confidence when everyone learns how it's done and that they're being conned.

Mon, 06/11/2012 - 10:34 | 2514434 canardo
canardo's picture

You got a point there, people are indeed paying attention now. The difference with just a couple of years ago is immense. Makes life a lot harder for the status quo. The other day as people over here (Holland) were watching the European Championship game against Denmark the Spanish bailout happened and it filtered right through the non-excitement about the game. Many people don't give a toss anymore whether we win or lose the EC, they're worried.

Mon, 06/11/2012 - 10:11 | 2514278 dizzyfingers
dizzyfingers's picture

Party over, or is there more?

Mon, 06/11/2012 - 10:14 | 2514297 arkel
arkel's picture

Come on, let's just print and lend the 2.5 trillion Euros already and call it a day.

We know 100 billion is chump change now and we all know the TPTB want to tie that debt to every nation's real assets and collect when the naitons deafult. Can we just get to the last chapter of this story already???

This is all filler.

Mon, 06/11/2012 - 10:15 | 2514304 Cursive
Cursive's picture

From here on out (until we get under 666), most rallies will be led by short covering.

Mon, 06/11/2012 - 10:20 | 2514309 Zero Govt
Zero Govt's picture

"Bailout Half-Life Now Laughable"

 chuckle :)

...comensurate with the clowns/comedians running this banking/Govt circus


Mon, 06/11/2012 - 10:18 | 2514317 Peter K
Peter K's picture

What did the Spailout do? Gave us better levels to get into our Risk Off/Reality On trades. ;) Ka Ching:)

Mon, 06/11/2012 - 10:19 | 2514326 walküre
walküre's picture

Oil did a nice roundtrip overnight. How much oil did the Asian markets buy at $86 tonight?

Mon, 06/11/2012 - 10:19 | 2514329 HaroldWang
HaroldWang's picture

Buy this dip. No doubt they'll juice this way higher into the close today. Same story different day.

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