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Peripheral And Core Eurozone Yields And Spreads At Widest Since October Equity Lows
Stocks are not the only thing to surge since the October 3 lows. As the chart below shows, yields (and spreads to Bunds) of all Eurozone bonds, both in the core and the periphery, have followed the equity Risk On sentiment diligently (if inversely), and are now at the widest they have been in the past 3 weeks. In other words, contrary to expectations of a mitigation in sovereign risk exhibited by a drop in spreads or yields, or both, following the CDS ban, we have seen precisely the opposite as sovereign risk has soared. But at least it has been accompanied by what continues to be an epic short squeeze, and has thus been masked by the overall market noise. In fact, one can make the argument that in many ways we are seeing the same response that we saw back in the US in advance of various monetization episodes, as it is becoming increasingly clear that it is the sovereigns themselves that are the risky assets, while corporates across the board must be saved at all costs by the ECB, the Fed or both. To purists wondering how it is possible to have a risk transfer of this magnitude in a continent in which the central bank does not have the same market levitation capabilities as the Fed (the ECB essentially needs a Bundestag approval for all its decisions going forward) we wish we had some insight.
source: Bloomberg
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Free market at work on the /es, laugh.
Bonds usually go in the opposite direction to equities.. stocks up, bonds down.. nothing unusual here
Bunds maybe. Treasuries definitely move in opposite direction -- high yields, however, do not.
Capital flows out of junk bonds (and the PIIGS ar junk) and equities and into the relative "quality" of U.S. treasuries and German Bunds.
So this is actually an unusual sign to see sovereign junk bond prices fall (yields up) without similar reaction in equities.
ohhh yeeaaaaaaahhhhhhh... ECB wants to be as stupid as FED, they are going RIGHT HI HI HI.
It will not be a lehman moment in europe, is gonna be a total-bankrupt together...THAT will be nice, bailout magnificient orgy
If the Euro were strong enough, and countries like Germany only accepted Euros in exchange for Marks, wouldn't a strong euro be good for them when/if the E.U. were dissolved? Okay, I am fishing for predictions on how how high the EUR/USD will go. 1.45, 1.5, 2.0?
Thoughts?
Here's a thought: Stop looking at the EURUSD for any clues to a rigged market. Neither is going "higher" they are falling in tandem and fluctuating in intervals. Buy gold.
Yes, both currecies are taking turns ratcheting downward in value. The EURUSD is mearly relative, and no indication of their value.
why is the euro rallying like this??? Is on those fart in the wind promises??
... the sole reason for the EUR (and hence S&P and global 100% correlated equity risk) surge in the past 9 days is not driven by any latent "optimism" that Europe will fix itself, but simply due to the previously discussed wholesale asset liquidations (as none other than the FT already noted), which on the margin are explicitly EUR positive due to FX repatriation, courtesy of the post-sale conversion of USDs to EURs. Which means that the ever so gullible equity market has just experienced one of the biggest headfakes in history, and has misinterpreted a pervasive European, though mostly French, scramble to procure liquidity at any cost by dumping various USD-denominated assets, as a risk on signal!
In other words, an internal bank run has somehow been interpreted to be stock positive... And there is your explanation for not only the paradoxical surge in the EURUSD and S&P, but why the correlation between theEURUSD and the Bund-France spread has completely broken down.
http://www.zerohedge.com/news/biggest-market-headfake-ever-wholesale-french-bank-liquidity-run-sole-reason-euro-and-sp-surge
Market up on CAT results, according to CNBC. Theres a cause/effect if ive ever heard one..wtf
'Market up on CAT'...
CAT = Computer Automatonic Trading?
Pump, and dump. Simple.
T minus 2 days till EFSF huge faceplant.
EFSF Faceplant = Bullish (sarc off)
Huge breadth surge today.
Obviously, The "Fix is In" on Europe, since junkers like FSLR are up 12% today.
Robo, you should check out the ticker STFU
RearviewTrader is just hoping they can pump it all back to DOW 12,700 where he last went all-in ultra margined.
you sure do like attention.
robo is just relaying the facts. from what i've seen robo probably has a pretty decent grasp on how to make coin in this "basket-case" market.
keep on posting what you think robo, some of us appreciate your input and do not castigate you because it does not fit into pre-conceived notions.
The fact that junkers like FSLR are up means that this is an algo induced short squeeze. FSLR is a heavily-shorted POS.
algos, bitchez
Actually, all SPD & Green MPs and more than a half of CDUs ones (a comfortable Bundestag majority) are willing to allow ECB´s levitation capabilities.
And german citizens who, supposedly, are against bail outs, even against the Euro, are voting, again & again for parties pro bail outs and pro euro.
This FACT maybe could be the insight needed
I don't think the CDU/FDP coalition will collapse though-- rendering the Bundestag SPD and Green positions less relevant until the next election. The FDP as a coalition partner is almost completely subservient right now, and the FDP would likely be crushed in early elections. There is a show of respecting their positions (i.e. on tax cuts) but little substance. The FDP's one hope is if Merkel did cave and go in for the various printing schemes -- then the FDP could break the coalition and campaign as the one party that champions hard money, a very popular position in Germany.
But Merkel won't give the FDP that opportunity -- no party to the right of the CDU has been their guiding successful strategy post-WWII, and the strength of German capital is also growing relative to other EU nations, so long as outright collapse is avoided.
I do not understand why the Greens support the ESFS levitation machine. How do they justify this support?
Like watermelons: Al Gore outside, Joseph Stiglitz inside.
I agree that Green support makes little sense, and their poll #s have gone steadily down since the debt crisis took center stage late last spring. Basically, the Greens espouse a vague EU solidarity and do their best to avoid invoking nationalism in any form (another WWII legacy). They also have a generally weak procifile on economic issues not connected to the environment. But both they and the SPD are missing a real chance to align with public opinion. I guess they are calculating that whatever Merkel ends up doing will be unpopular, and so they will benefit in spite of their own mushy positions.
Divide today's 1253 intraday S&P level by the S&P's 1074 intraday low in early October.
Result: up 16.666% ... it's satanic, I say!
Short squeeze continues. Price is there but the volume is not. A very dangerous market for all.
In God We Trust, what a sick joke! There is no god, there is only satan. (he works at the fed in case you were wondering)
There is no Dana, only Zuul!
wtf, you chose a bearded clam as the form of the destructor?
"We shall have World Government, whether or not we like it. The only question is whether
World Government will be achieved by conquest or consent." -- Statement made before the
United States Senate on Feb. 7, 1950 by James Paul Warburg ("Angel" to and active in the
United World Federalists), son of Paul Moritz Warburg, nephew of Felix Warburg and of Jacob
Schiff, both of Kuhn, Loeb & Co. which poured millions into the Russian Revolution through
James' brother Max, banker to the German government — See the Sisson Report
http://www.jesus-is-savior.com/False%20Religions/Illuminati/quotes_on_the_new_world_order.htm
While everyones focused like a laser beam on bullshit manipulated markets and handing free money to TBTF banks, things like Bill 195 banning cash transaction in the US go un-noticed.
Cash Transactions Banned by Louisiana: Government Takes Private Property Without Due Process -- Puppet Masters -- Sott.net
And Louisiana is a red state. Who'da thunk it?
I never bought into this 'red state/ blue state' steaming pile, theyre all a bunch of socialists and most of the southern states are the worst!
Consumer staple stocks being sold across the board today. What an f'ed up day.
The ultimate crooked HFT algo symbol of "fresh steaming pile" on the move is the ramp in PCLN today.
If that isn't an indicator of a total BS ramp-job, then I don't know what is.
ES targets 1262 to 1295, could happen in hours or days.
Euro is primarily driving this piggy up, and Cable is tagging along
http://oahutrading.blogspot.com/2011/10/es-targets-1262-to-1295.html
They've got 2 days, that is unless the E.Z. kicks the can yet again on the release of their earth shattering bankruptcy bailout plans.
My GSD shepherds love eating lamb, what is the world coming to?
In 2008 the market challenged the upper BB before collapsing. That is sitting at 1380 right now, and would mean a new high for the year. More likely the market will test the lower neckline of the H&S. I put in 1272 as the upper resistance.
Weinberg on Bloomberg Radio this AM - Euro and next up the Japan implosion
http://media.bloomberg.com/bb/avfile/News/Surveillance/vDIUlY817LmI.mp3
This thing is dragging out and it is getting tedious. Just crash already!
Stocks going up...
EURUSD going up...
Gold going nowhere !!!
Last chance to buy?
that's actually not a very good sign
i mean, if you want to be objective about it
To me, this looks like a "Risk On" trade with a special twist of gold not moving down. There's enough demand for gold to support it even now.
I'm eager to see, what happens when "Risk Off" trade takes place again...
Yeah, politics always muddies the waters. Idol worshipping philistines!
looks like not a bear willl be left to tell the tale.
My Psychic says The Fool tarot card is in play.
The Fool is the cause behind all effects, the power behind all manifestations and the seeds of the end sown in every beginning.
You know, the more convinced I am this market won't go higher once the news settles in that there is no QE on the table at the moment in EU (or the U.S. for that matter), the higher the market goes. This ZH article in laymens terms is talking about how stocks had their biggest run last year BEFORE QE was even implemented....as they seem to be doing now.
This is going to be a practically binary event: either those not long are going to look like the biggest idiots ever know to mankind--especialy since the beginning of Oct.--or those longs will look like the biggest suckers ever shortly. Only time can tell.
Didju all see Angela (Whitest Creamy Inviolate Shaved Smooth Upper Thighs in Europe) Merkel on the News this a.m.? In answering a question essentially of the ilk of "Why a delay of an announcement until Wednesday?"
Her answer was something along the lines of "that there are numerous highly technical issues to be worked out, like how it will work."
Yes!
These people are still enraptured with Pong!
'Yes well the announcement is delayed, because we have no idea what the hell we will say Wednesday to prevent the entire Rube Goldberg-ian contraption from flying into a trillion pieces....we have absolutely no idea what to do.'
'...but at least I was making fun of bunga bunga with my dear friend sackozy!'
Math is hard.
Barbie
The Plan to facilitate the Plan is faltering while The Plan is still in place
If a QE is suddenly announced, and Ron Paul doesn't make the biggest baddest protest ever, he is just one big fucking con job.
If Bernank throws another QE party, then Ron Paul will say he needs more donations, quick!
CNBS- Grasso, "1257 will cause huge buy programs with algos."
Self fullfilling BS to scare shorts to cover (in order to hit 1257). These two-faced fuk's are too predictable.
million billion trillion euro bailout coming bitches
And alas, it will still be far too small. Baked-in cake gets devoured immediately, then all get busy stabbing each other with forks.
what about quardillion bailout?
I'd welcome that...then theyve REALLY got nothing left! Personally I think at present theyve got nothin left already, as whats-his-name mega fund guy was saying in an earlier ZH article this morning....empty tool bag.
you're right. they surfing blind. they cannot even agree on what to disagree about. they just all know that they need to do something, but everything they are comin gup with is just hot air.
in germany, insurers becoming affected. bafin wants to know their exposures. when german insurers feel contagion, shitstorm will come quick and hot.
on wednesday morning german parliament has to vote on details of efsf reform. that will be funny. then we will know more.
So exactly why is the Euro rallying, in fundamental terms (if there are any) -- that policymakers are going to rescue it from the abyss? Or with the new debt issuance, they'll be taking Euros out of circulation as banks buy up the debt?
I'm lost.
it's called irrational exuberance
Personally I think theyre just doing their last 48 hour hurrah....theyve got nothin, even Merkel admitted as much this morning.
We wish we had some insight.. Take the mask off and you will see that the ECB, THE FED, and the IMF are all the same flesh easting disease that has been consuming its citizens from the inside out. One big circle jerk from shore to shore, pumping and dumping like vultures until every last bit of flesh is picked off the carcasses of their helpless victims. Once they have successfully pecked everyone into submission, they will unleash their plan to save us all from distinction..
Whats PrimeX doing these days anyone got a link?
When the euro fails, introduce the dollar in Europe and let Bob play with another continent.
My guess is that everyone thinks it is safe because there won't be any major news involving Greek default and the resulting contagion until Europe has their "grand plan" in place.
yup: "as it is becoming increasingly clear that it is the sovereigns themselves that are the risky assets, while corporates across the board must be saved at all costs by the ECB, the Fed or both."
the banksters are gonna save the TBTF 'corporates' and the 'sovereigns' are gonna 'pay'
same-old-same-old