• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Peripheral Stocks Pump As Spanish Bonds Dump

Tyler Durden's picture


Italy, Spain, and Greece saw their stock markets rally today (with Greece dramatically so - though what exactly is 10% of nothing?). The rest of European stocks are underperforming as equities broadly deteriorate towards credit markets' already less sanguine shifts. In the last hour or so equities and credit did rally modestly into the EU close but investment grade credit remains near one-week wides as stocks remain range-bound. Spanish bonds (cracking over 7% yields) diverged significantly today as Italy managed to rally modestly close to close. Spain's 10Y spread to bunds has risen 90bps from its opening rally on Monday morning and over 55bps from Friday's close (and Italy +22bps on the week).; but Italian stocks are down 3% on the week and Spain up 1.85% on the week. It all makes sense if you blur your eyes and put your fingers in your ears. EURUSD managed to get back over 1.26 (as gold and silver dumped this morning) as we suspect we are seeing more repatriation flows (and TSYs tumbled this morning) but with Swiss 5Y rates almost 5bps negative, Europe remains teetering.

European stocks (blue) are reverting lower to credit's deterioration...

as Spanish bond yields/spreads surged and diverged from Italy for a change...

but Spanish stocks remain notably outperformers relative to Italy...


Charts: Bloomberg

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Thu, 06/14/2012 - 11:44 | 2525880 LULZBank
LULZBank's picture

Pump and Dump Bitchezz!!

Thu, 06/14/2012 - 11:55 | 2525922 whatsinaname
whatsinaname's picture

No wonder Cramer wants you to sell Santander (SAN) and buy SHW, TRV and TD which are near 52 week highs..

Thu, 06/14/2012 - 12:39 | 2526092 tocointhephrase
tocointhephrase's picture

Cramer needs to do himself a favor and shut the fuck up, base jump from the Empire State building and fail to pull the ripcord!


Thu, 06/14/2012 - 12:25 | 2526042 Tiago
Tiago's picture

Now this is what they call a dead cat bounce. As we already know that tomorrow is a risk off day and Monday's Greek stocks will be -10% at their best.

Thu, 06/14/2012 - 13:17 | 2526265 financial apoca...
financial apocalyptic contagion's picture

"It all makes sense if you blur your eyes and put your fingers in your ears."

thats exactly how it can make sense 3 days to D-day

Thu, 06/14/2012 - 11:46 | 2525884 Snakeeyes
Snakeeyes's picture

Pump 'n Dump. Sounds like a cheap gas station in the South.

Thu, 06/14/2012 - 11:51 | 2525912 CommunityStandard
CommunityStandard's picture

Or a cheap hooker.

Thu, 06/14/2012 - 11:46 | 2525887 GMadScientist
GMadScientist's picture


Thu, 06/14/2012 - 11:47 | 2525892 Ted Baker
Ted Baker's picture


Thu, 06/14/2012 - 11:51 | 2525910 the 300000000th...
the 300000000th percent's picture

seems like there is always more pumping than dumping but than again maybe thats just inflation as well

Thu, 06/14/2012 - 11:58 | 2525931 the 300000000th...
the 300000000th percent's picture

volume seems low today

Thu, 06/14/2012 - 11:59 | 2525934 Al Huxley
Al Huxley's picture

... and gold moves from slump to jump, and Benny gives the 30 year a little bump, while the taxpayer takes it in the rump...

Thu, 06/14/2012 - 12:05 | 2525958 Mark123
Mark123's picture

Great inspirational quotes from the financial war:


"Dear God....must....save....European.....markets....by....close...."


"Hang in there boys, if we can hold the market at the 25 day we may just win this battle yet!"


"Release the HFT drones!"


"In honor of your gallant front running to achieve a short term rise in our companies stock, I hereby award you this massive year end bonus"


"We are doing God's work"

Thu, 06/14/2012 - 12:14 | 2525999 GreatUncle
GreatUncle's picture

"what exactly is 10% of nothing"

First a concept what is nothing except a means to measure how much you have.

Now if everything that is "potentially now currently nothing" and then with what we pretend is there added on but never was.

10% of nothing, could be 10% of everything we pretend is there.

Or it could be 100% of absolutely everything if all the pretend everything starts disappearing. 

Sound familiar, trillions is owed globally but how much of that is pretence. Chuck a number in here 200 trillion with lets just say a politician saying the 10% is 20 trillion. What if the pretence 200 trillion is in fact only if the pretence is removed worth 20 trillion then the 10% of nothing just became everything.

There seems to be alot of trying to keep the pretend values up and cannot be expunged from economies because the bailouts being bandied about are actually everything. They do seem limited but do you bet pretence to solve it? So psychologically a politician cannot bet with the pretend stuff yet they struggle muster more than a limited amount hence likely we are gambling the 10% to offset the problem of everything "AND PRAY GOD THE PRETENCE HOLDS UP!"

If the wheel stops, 10% of nothing is everything "game, set and match so long live the game".

Thu, 06/14/2012 - 12:41 | 2526110 GoldbugVariation
GoldbugVariation's picture

The strange action seen in the IGS markets today is due to options and futures expiry tomorrow.

A lot of traders were short and closing positions into the close today (market hours end at 3.40pm European time).  That was good for a 250 point (2%) rally on the MIB, the Italian stock index, for example.  It won't last beyond the morning.

Thu, 06/14/2012 - 14:01 | 2526410 Grand Supercycle
Grand Supercycle's picture

Rally warning continues...

Despite stockbears with their pre-election jitters, SPX choppy bullish daily & USDX bearish daily charts strengthen.

Significant equity / EURUSD upside & USDX retracement ahead.


Thu, 06/14/2012 - 14:02 | 2526421 Wizard of Finance
Wizard of Finance's picture

Spanish ibex35 main companies ( ITX, SAN , TEF, BBVA, ELE, etc..) are truly international and their domestic exposure is limited.

they are the ones that will hold value in case of a total spanish fiasco.

Small cap index (more domestic)  and your favourite towel maker Bankia still going down. 

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