Overnight Bizarro Futures Levitation Driven By Spanish Balance Sheet Deterioration

Tyler Durden's picture

A snoozer of an overnight trading session for now, with Asia rising modestly, Europe green and the now priced in futures levitation as US traders walk in. Nothing material to report, except the usual - the European leverage reality continues to deteriorate: as has been long discussed the taxpayer cost to rescue Greece keeps rising, and the latest and revised figure of the bailout is €172.6 billion, €43 billion than previously thought by some (as we have pointed out from the beginning the true cost of the bailout will hit €210 billion). We will shortly point out the total disaster that the Greek balance sheet is with 7 classes of debt outstanding post the OSI. More disturbing is the "austerity" report out of Spain, where we just learned that total public debt has hit €735 billion at the end of 2011, with regions debt at €140.1 billion, which means that public debt rose to 68.5% of GDP, from 61.2% a year prior.  As Peter Tchir says: "We are still in no one cares mode, but the exposure the core has to the periphery is growing by the day.  Germany's exposure is growing because of Target 2, and Spain and Italy are busy guaranteeing the debt of their banks. On the surface, all is calm. Below the surface it is messier than ever.  They are doing everything possible to keep that mess covered because if it rises to the surface, it will be harder to control than ever before." As a reminder, this is precisely what happened in early 2011... and early 2010. You can only keep trillions of underwater debt under the rug for so long.

A full recap of overnight activity from BofA:

Market action

Asian equity markets finished mixed overnight as some investors looked to lock in profits after the recent rally. The biggest sell off was in India where the Sensex lost 1.2%. The Korean Kospi fell 0.5% and the Hang Seng finished 0.2% lower. The Japanese Nikkei managed to finish up 0.1% to mark its sixth straight week of gains. In China, the Shanghai Composite was lifted by investors seeking to capitalize on the local markets recent sell off. Overall the index rose 1.3%.

In Europe, shares are trading a solid 0.4% higher in the aggregate. If Europe can hold on to these early gains it would mark the fourth consecutive day that European equities finished higher. The rally in Europe is being fueled by growing confidence that today's US data will come in better than expected. At home, futures are up 0.1% for the S&P 500.

In the bond markets, Treasuries continue to sell off across the curve. The 10-year Treasury yield is up 3bp to 2.31% while the long bond is also up 3bp to 3.45%. The 10-year yield is now at its highest yield since October 2011. In Europe, the UK gilt and German bund are both selling off as well.

The dollar is rallying in the currency markets. The DXY index is 0.3% higher. Commodities are trading mixed. WTI crude oil is 11 cents higher at $105.23 a barrel while gold is down $10.28 an ounce to $1,647.50.

Overseas data wrap-up

Singapore's non-oil domestic exports surged 30.5% yoy in February more than reversing the -2.4% yoy drop in the prior month. Before extrapolating February's solid number we caution that January and February's data has been distorted by the Lunar (Chinese) New Year, a floating holiday. This makes it difficult to seasonal adjust data. Looking ahead, the sovereign debt crisis in Europe as well as a weaker economic backdrop around the globe should cause global trade to soften.

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GetZeeGold's picture



Bizzaro is the new normal......besides, by the time we get to Spain.....the bailout money will have been long gone.


Dull Which's picture

roll up! roll up! Come get your bailout money. First come first served.

RollinsArline3's picture

my roomate's mom makes $83/hr on the computer. She has been fired from work for 9 months but last month her pay check was $18339 just working on the computer for a few hours. Read more on this web site .....  http://bit.ly/FPPP3j

cossack55's picture

Unless it is a flying carpet with unlimited ceiling.

HelluvaEngineer's picture

What part of "Greece is fixed" do you not understand?

GetZeeGold's picture



The fact that it's not.....yeah.....that part.


LongSoupLine's picture



CB fiat leveraged 4-14X = "bizarro". 

(ok, it's not quant math...but just as accurate)

SimpleandConfused's picture

Happened in 2010, 2011...

Let me clue you guys into something.  Numerical sequence is pretty easy.  You know; 1, 2, 3, 4, 5, ............. infinity.

Remember this when it comes to the EU.  It happened in 2010, 2011............ infinity.

Nothing is going to happen.  The EU will get rid of a member or two, probably find another one or two to replace them and go on its merry way.  As was written by some pretty good comedy writers a few years back: Greece was in trouble, debt out the ass, lying about GDP and deficits, Spain was looking the same way..YADA YADA YADA, the iPad3 is a mega-hit!!

As far as the markets go, this is even easier than numerical sequence.


resurger's picture

no news on the credit Event anymore?

This is scary, i have watched the headlines very carefully this week, none of the headlines like NONE! has mentioned anything about Greece and the D-Word!

Lets see what happens on March-19th

Monedas's picture

Spain is playing catch up !  The bigger the problem.....the bigger the bail out ! Countries who don't scam the system will pay !  If you're going belly up.....have one last fling !  Monedas   2012   It's the old "you owe the bank a million bucks" scam ! After you strip away all the BS....theft is a very simple arrangement....I take what you got !

ShankyS's picture

Greece is like that Red Solo Cup - Fill 'er up and let's have a party. Spain, not so much. 

Monedas's picture

When my credit ship was sinking.....I stocked up on Buffaloes, Forever Stamps and 120 See's Chocolates 1 pound box gift certificates !  Monedas   2012   How sweet it is ! I want my Chesapeake bay villa and $25,000 to buy a new work interview wardrobe and Food Stamps !

RomeoFayette's picture

Does anyone have a Spanish debt maturity schedule for FY 2012?

GetZeeGold's picture



I've lost my schedule.....but I do have season tickets so I'll let you know what happens.


jover's picture

<-- You are increasingly becoming more and more depressed by the way things are going in europe.

<-- You stopped caring any longer, you have covered your ass. Sorry sheeple.



Arthur's picture

Dumb question.  Why is Spain guaranteeing the banks debt?  Ireland screwed themselves with that move.


What happens if Spain and others just let their banks go BK?  Couldn't the remains of the banks then be nationalized with the government picking and choosing what debt to pay and at what rate?  The banks could then be resold and the whole process started over again?

Blue Horshoe Loves Annacott Steel's picture

Good news = bullish

Bad news = bullish (it could be worse!)

Neutral news = bullish (at least it's not bad!)