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The Pain In Spain Is Mainly, Well, Everywhere
Update: Here we go - SPAIN TO NATIONALIZE BANKIA LATER TODAY - ABC Source
From Peter Tchir of TF Market Advisors
The Pain In Spain Is Mainly, Well, Everywhere
Spain.
Spain.
Spain.
The reality is Greece is largely noise. Greece will eventually leave the Eurozone, but not this month. The hardliners inside Greece will realize they need some time to organize. The markets will have spooked the hardliners outside of Greece that they should play nice for a little bit, because forcing Greece out now won’t do them any good whatsoever.
With Greece largely a sideshow at this stage, the attention is really focused on Spain and Italy. The fact that Greece might lead the way out of the Euro is having a big impact on these countries. That realization combined with the already obvious problems at the sovereign and bank level caused markets to sell off. The Spanish 10 year bond is back above 6%, dropping 20 bps today, which is a significant move. As we wrote about last Friday, there are no natural buyers, so this move occurred in an illiquid market. There is more room to run, but moves in Spanish and Italian bonds are already starting to have a less direct impact on stocks than they did earlier in the morning.
I don’t think we will see a serious rebound in Spanish and Italian yields until the ECB intervenes. They will need to step up and draw a proverbial line in the sand. My guess is that won’t occur until 6.25% on the Spanish 10 year. Once they do step in, watch out a big gap better on the bonds. Just as there are no natural buyers, there will be no natural sellers. The shorts will want to cover. No one who is short is going to want to fight the ECB, at least not on their first day of purchases, so they will become buyers themselves. The dealers will sell what little inventory they have to the ECB and will do everything they can to drive up prices and get the best execution possible on their small positions. No Spanish or Italian bank is going to sell their inventory for a loss. They might not be adding, but they sure as heck aren’t selling.
The first hint of ECB purchases will be a major “risk on” signal. I don’t think we get it yet, but once we get actual purchases, or even a good rumor of purchases, I would expect 10 year bonds to gap up a point, CDS to tighten by 30 bps or more, and stocks in Spain to do a quick 2% bounce. It will happen quickly, but I really think the ECB has too many skeletons of its own making to jump in just yet. A bit more pain in the bond markets is still coming, but it will have less of a knock-on effect on stocks than the gap to 6% had.
Finally remember this presentation? Yeah... It was right.
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What a freakin minute here.....wasn't going green suppose to save them?
Can you say Trojan Horse? In line with unstated and non-official US foreign policy, TPTB on our shores are determined to not allow any region to rise and form a power base.
Those libtard Eurotrash socialist thought they could rival the fucking dollar...hah! We said we'll see about that... then doctored the books to get greece into your party and sold you a bunch of fucking worthless mortgages.
So what we blew up the rest of the World, at least we didn't allow anyone to rise to challenge us... so take that bitches.
Spain, shmain. CA's economy is larger than Spain and this where we are:
Where's our IMF rescue? Where's our ECB or LTRO?
The numbers there are remarkable. The wheels are quite literally coming off. Some numbers are easy to fudge... GDP, unemployment, CPI... but the "rubber meets the road" numbers... not so much. Tax receipts... rubber meet road... or fly meet windshield.
Death is everywhere
There are flies on the windscreen
For a start
Reminding us
We could be torn apart
Tonight
Death is everywhere
There are lambs for the slaughter
Waiting to die
And I can sense
The hours slipping by
Tonight
Appropriate theme music inserted here.
http://www.youtube.com/watch?v=yqjuVANK9-g
If the world does end, I'm partial to this theme music...
http://www.youtube.com/watch?v=KSY4Yi2ypno
+300 One of my favorite pieces....and a good movie too.
Holy shit-- sales tax confiscations down by 54%???? That is an implosion.
"Some numbers are easy to fudge... GDP, unemployment, CPI... but the "rubber meets the road" numbers... not so much."
Correct. A good accountant can create fake profit for you without too much effort, but faking cashflow is much, much harder.
Not all numbers should be trusted equally.
And it's not by accident that the macro numbers we sheeple are fed are the big ones that are easy to fudge. Remarkable.
The numbers there are remarkable. The wheels are quite literally coming off.
Same thing happening across America and Europe, economy slowly collapsing, proven by dropping income tax revenues, dropping sales tax revenues, the real numbers they can't spin to make things look good.
Anyone have a chart of federal income tax revenue since '08? Steep downward slope I would guess.
California needs to overhaul it's State Constitution to end the legislative deadlock, and gradually phase out or have some sort of check and balance to counter bad voter decisions on Propositions. With direct democracy Propositions, voter's will tend to vote out of selfish interest over sound policy, or become influenced by special interest ads. Limit propositions to laws, not taxation/spending. Hard to argue in striping power away from the individual and reducing their liberty and voting rights that have been enjoyed for their entire lives. California would be best served as a Republic controlled by the legislature with simple majority to pass spending/tax bills, and reduce the Ancient Athens style of direct democracy. Maybe one day we can experiment and find a system where direct democracy will work not only in a state but on a national level as well.
'Where's our IMF rescue? Where's our ECB or LTRO?'
Firstly, you have the FED. Secondly, I'm sure Pete can tie that story in with Spain. He is very talented.
Yes... And it is the Fed that feeds the IMF anyway.
California doesn't matter, only Wall Street matters.
California is the Garden of Eden.
It's where the AAPL tree grew.
ori
"Where's our IMF rescue? Where's our ECB or LTRO?"
where is the austerity plan? Where's the cuts in spending?
California officially has 11% unemployment..it is likely allot higher..People and business's are leaving the state..Don't sweat it though, Face Book IPO will save the day...
http://www.nytimes.com/2011/01/11/us/11california.html
STFU, stupid.
It's not enough obviously...They can cut government employee's off the pay roll permanately and get rid of the social programs alltogether. Enforcement in immigration laws would save the state 11 billion a year in incaceration, schools, and medical...
Cole you forget the voters in California got what they voted for. Moonbeam set this system up when he was governor last time. I did not vote for him then and now I no longer live there. Best decision I ever made leaving a great state that is now a third world country.
Dear GCT, the weather is GREAT. There is skiing, surfing, backpacking, birds singing in February. We don't miss you. The biggest problem with CA is too many people. Once again, we don't miss you.
CA ranked #50, the worst for its business atmosphere. So not only are people pulling up and leaving, so are businesses. CA has held that distinctive position for seven years running. ;-)
Bet you don't miss them either, huh asshat. Texas ranked #1 for its business atmosphere, for 8 consecutive years. Want to guess where business that leaves CA goes. And here in OK, we rank #11. Boeing just moved a big part of their business here last year, some 500 high-paid people. Most of them moved here with the business. Some did not. Good luck to them.
http://chiefexecutive.net/best-worst-states-for-business
I lived in CA for 26 years. Do not miss it at all. Most especially when here, every day, I can legally pack a sidearm. Good luck with that in Commiefornia.
They could ramp up taxes on a small handful of large multinationals in CA and close the budget gap at a whim; look at the historical percentage of the tax base that comes from corps over the last 20 years.
The slop-jockey bond-pushers of the CA Repugnicant party doing favors for their golf buddies have had a "vested interest" over the last decade too. Never met a bond measure they didn't like (and front-run, tax-free).
Wake up...it's not the powerless Mexican you should be worrying about, slick.
Enforcement in immigration laws would save the state 11 billion a year in incaceration, schools, and medical...
Yeah, that virtually-impossible "enforcement" is free, right?
I can now breath a sigh of relief thanks to FB and their generous tax contribution of a nickel a year for the foreseeable future.
Don't worry - the federal taxpayers will inevitably be there to pick CA up off its worthless ass as needed.
More of those federal dollars and dead soldiers come from California than any other state.
Sales tax revenues was a big miss...54.4%....that does not sound like the consumer is back and spending....or is it the black market....I feel sorry for Chiang.....he will be BBQ´d....
Or they're not paying sales tax on online purchases.
You can bet Obama and Ben are pumping dollars into California through various channels, or that cesspool would have already gone down the drain.
What a frickin' JOKE! Shame a state as great as CA can't get some real leadership. We will never know how great CA could have been because it became infested with cockroaches and other parasites.
those shortfalls are HUGE, yikes.
To answer your question, they are all in Greece, Italy, Spain, France, UK, Ireland, and the Portos.
We don't need no steeenking budgets
Fucking blue state... idiots.
blue/red, what's the difference?
Blue states provide taxes, red states spend 'em (and whine incessantly about too many taxes). Idiots indeed.
I read an article about why people hate california. some fun stats, but the quotes from Californians have the reason.
“No one knows anything about Delaware. No one has a clue about Wyoming – but everyone knows California,” said Dowell Myers, a professor of policy planning and demography at the University of Southern California. “Its visibility is really high.”
There’s some good news for California — at least if you’re a female Democrat. Women were less likely than men to rate California as unfavorable, and there was a massive partisan gap. Democrats love California; Republicans can’t stand it. The opposite is true of Texas.
“I’m sure that for a lot of purple America the extra red Texas and blue California may seem a little far out there,” said Roger Salazar, a political consultant in California.
But whatever the reason, most Californians took the news that their state was the least popular in stride.
“They’re just jealous,” Salazar said.
GO FUCK YOURSELF CALIFORNIA.
"There’s some good news for California — at least if you’re a female Democrat."
"Good news"-- that's rich. Is there a more clueless, insane, or dangerous species than liberal american females?
Get laid much?
Christian Conservative Zionist men perhaps?
y'know, the ones who make the wars happen? or their counterparts in the financial class? or their overlords in the globalist camp?
sheesh, you're clueless arent't you. . .
GOD BLESS TEXAS!!!
Those deficits are being covered with $12.8 billion of internal borrowing (temporary loans from special funds) and $6.4 billion of external borrowing.
Who the hell is lending $6.4 billion to these clowns? They can't manage money, their budgets and projections are toilet paper, they dig themselves deeper in the hole every day. I wouldn't lend 'em a cent, I don't care what collateral they're offering.
Where's our IMF rescue? Where's our ECB or LTRO?
Indeed. For that matter, where is your self-sufficiency?
Who is funding these clowns? Criminals. California municipal bonds are a wonderful money-laundering vehicle.
No worries. Facebook IPO will produce $billions for the state coffers.
monthly revenues came in $2.44 billion below (-20.2 percent) the latest projections
Hah, that's funny, because every single, fucking time the actual revenue comes in (unexpectedly) under projections. CA is going to be one interesting petri dish when the tax increases don't raise revenue anymore and real cuts have to be made. It's going to be education unions vs health unions vs police/firefighters vs transfer payments to immigrants. Bring on the Octagon....
Not everybody gets to be Audrey Hepburn...
Or Reggie Middleton or Hugh Hendry.
Breakfast at Bernanky's?
At the end Peter sounds just like every other junkie waiting for the next hit.
+1
"I don’t think we will see a serious rebound in Spanish and Italian yields until the ECB intervenes. They will need to step up and draw a proverbial line in the sand. "
Didn't they draw a line in the sand on Greece? We see were that got them.
Yep. And what kind of rebound do you get when money is literally printed out of thin air to prop up a failing system?
What were once vices are now habits. This kind of intervention would have gotten you some crazy looks if you talked about it when I started investing 30 years ago. Now, it's all "normal", everyone justifies utter bullshit moves to save a system just getting shittier and shittier, day by day. How much worse can it get for the man on the street?
Fuck it, the death spiral continues.
What a garbage article. Trying to front run central banks is what passes for investing these days. Who will print, when will they print and how much they will print, is that it? The whole western world is one big AA meeting where the punchbowl has been spikes for 40 years and now no one can get the votes to do dry. Ultimately it is either sober up or die. Greece will be first and then when they are out from under, the others follow suit and pull an Iceland. G_d bless those Icelanders!
Yup. Is sad. And ironic that the behavior which created the mess is the same behavior that will accelerate it on the downside.
I disagree. The game has been 'extend and pretend' for the past three years. Without things like LTRO, the gig would have been up already.
More than that, there's no endearing irony to anything the EU does. It's been the social, economic and political equivalent of a Dominic Strauss Kahn party; a cluster fornication resulting in court cases (although they're yet to happen).
I plussed you, but only in sympathy. It's not a garbage article. It's all we have left. There is no "market", only front-running the CBs. Sorry.
I think I just saw bitcoin's daddy:
http://tradewithdave.com/?p=10246
US States, GDP per capita
District of Columbia: 174500
California: 51914
Texas: 45940
New York: 57423
Florida: 40106
Massachusetts: 58108
Mississippi: 32967
It is about time for Washington, D.C. to leave those disgustingly lazy other Americans behind! District of Columbia must leave DOLLARZONE NOW before these lazy bums drag such a fine state down to their idiotic level!
It appears that u understand excatly nothing about how GDP is caculated??
Why California should quit the 'dollar zone':
http://www.guardian.co.uk/commentisfree/cifamerica/2011/mar/20/californi...
It is so funny when you Americans seriously are suggesting Eurozone breakup based on productive differences when using the same logic against USA results in the same conclusion, even more so.
Spain's fault. Dude you're not reading these articles properly.
2 years of lies, propoganda, deception, outright fraud have come to a head. How do you like the lies by this administration to us fools who bieleived them?
Imagine if casinos worked this way. Everyone would wind up in jail or with a horse head.
When will this goddamn market crash? I'm seriously getting annoyed now.
How does a market crash when it is being held up by printed confetti and con games from within?
The only "real" money left in this market are held in 401k's and the gov needs that to stay afloat so there is something there for them to confiscate.
Hard to sink styrofoam.
Parts of it crash daily. I think what you meant to ask was "when will this market stay crashed?".
The Eurozone:
Last one out is a rotten egg!
With Greece largely a sideshow at this stage, the attention is really focused on Spain and Italy.
Well, we may see some jockeying for first mover advantage...
As usual, instead of doing the right thing the politicians are busy behind the scenes saving their own sorry asses and probaby doing everything they're telling everyone else not to.
People in the world have had it with these morons and are tired of playing the game and looks as if we all could come to agreeance at the same time. That's a big problem for them. Oh well, start loading the spaceships aimed straight for the sun.
For all this misery there is only one remedy for the individual investor. Buy gold! or as the dutch say: goudbaren kopen.
The downfall in stocks can be profitably exploited by using cfd's. Only rampant inflation can push the stockmarkets higher longterm.
"Spain’s debt-to-GDP balloons from 60% to 90% of GDP with regional and other debts"
USA has about 100 percent debt to GDP and rapidly rising and all foreseeable future fiscal liablities are somewhere north of 60 000 billion dollars at least. Spain lowered their government debt burden during last decade unlike USA.
"Spain has “zombie” banks with massive loans to developers and tohomeowners"
"Banks have not begun to realize losses and are vastly undercapitalized"
USA has zombie banks based on massive loans PLUS who knows what kind of liabilities from their fancy CDS, SIV etc etc games. All this is held together by dollar printing.
"Spain has the highest unemployment in the developed world, one of the highest overalldebt loads, and the most uncompetitive labor market in Europe"
Americans are not far behind, 70 percent GDP consumer economy when it should be more like 50 percent.
Euro will stay. Eurozone will change. Greece will make a nice province for Germany. And so will Spain.
No kidding.
Spain’s Pain Continues to Accelerate – Banks, Housing, Bad Loans, Unemployment, Nosediving GDP – Time for More Sangria!http://confoundedinterest.wordpress.com/2012/05/09/spains-pain-continues-to-accelerate-banks-housing-bad-loans-unemployment-nosediving-gdp-time-for-more-sangria/
Yikes.... and away......
As long as anyone lends money to California they'll go right on with this farce, ponzi scheme, whatever.
And "special funds" they're borrowing from? Sounds like pension funds (state employees, teachers, police & fire, etc), probably like other states are doing (quietly).
California pension funds loading up with IOUs. Sounds like social security trust fund, all the money gone, nothing but IOUs.