From #Spailout To #Spanic

Tyler Durden's picture


When US equity futures, Treasury futures, and FX markets opened yesterday to a 'risk-on / reality-off' scenario, we made it clear that we suspected things would look very different by the European close. Sure enough, the markets in Europe (and US) have seen a dramatic shift in sentiment as the realization of the end-game here grows louder. It is evident that any strength, any rip, is to be sold. EURUSD rallied 1.2% at its best near the open last night but is ending 0.2% lower from Friday's close. Europe's broad equity market is closing modestly red after being up almost 2% at the open. Europe's financial credits led the equity market once again as senior spreads swung from a 20bps rally to a 10bps sell-off by the close. Italy was crushed after opened up over 4% to close down over 2.75% as Italian banks were halted all the way down. Spanish banks gave back all their gains (SAN was up almost 6% at the open and closed red). Investment grade credit notably underperformed and high-beta XOver swung from a 35bps tightening to close modestly wider. European sovereign bond spreads all opened notably tighter but were crushed by the close with Spain and Italy underperforming (+60bps and +50bps from their intraday low spreads respectively). Quite simply, Europe has swung from Spanish bailout fantasy to Europe's contagious panic reasserting - and that was after a weekend when Spain (and Spanish banks and every bullish trader out there) got everything they wanted. It would appear that the investing public has become better-educated at what is really going on in Europe and how these interim 'solutions' are all to be faded as Franco-German relations remain tense and Germany stoic. In liquidity/safety land, Swiss 2Y rates plunged 7bps to a new record -35.3bps.

European equities (dark blue) fell led by financials credit (blue and red) - this was your tell...

European Sovereigns were dumped en masse, back near record high yields and CDS levels...

As Spanish equities fell from up nearly 6% to down almost 1%...

as even the 'saved' Spanish banks gave it all back (and were downgraded) as SAN dropped from up almost 10% to down 0.8%...

and overall, Europe ended in a sea of red with DAX managing to hold very modest gains...

and Swiss 2Y rates plunged to new record lows at -35.3bps...

Charts: Bloomberg

Finally, we can only hope we are joking, but Zero Hedge has dibs on #SpankruptcyTM

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Mon, 06/11/2012 - 11:54 | 2514890 VonManstein
VonManstein's picture

the metals are acting strange (as in stranger than usual)

Mon, 06/11/2012 - 11:55 | 2514902 junkyardjack
junkyardjack's picture

Yea gold is going up, the invisible hand will fix that...

Mon, 06/11/2012 - 12:15 | 2515002 Chris Jusset
Chris Jusset's picture

This Spanic is quickly turning into Spandemonium as Spandora's box has been opened, and things are getting Spugly

Mon, 06/11/2012 - 12:17 | 2515031 r00t61
r00t61's picture


Mon, 06/11/2012 - 12:32 | 2515094 Lucky Guesst
Lucky Guesst's picture

Not really... this could get very spainful.

Mon, 06/11/2012 - 12:59 | 2515220 The Monkey
The Monkey's picture

Don't get suckered! Plan B, C and D are all waiting in the wings.

Mon, 06/11/2012 - 14:21 | 2515495 hansg
hansg's picture

They are all variations of "give more money to the banks", right?

Mon, 06/11/2012 - 11:57 | 2514911 YuropeanImbecille
YuropeanImbecille's picture

This is bad. I was hoping that the cardhouse would stay operational until at least September !

I need to make 3 large purchases of Silver between now and then.. so please JPM do some of your magic!

Mon, 06/11/2012 - 12:00 | 2514938 VonManstein
VonManstein's picture

i think they gonna let the paper run up a bit before next smack down. they have to keep paper players interested if they want to weild any power over the price, if everyone stops playing they lose.

plus i think the are losing their grip, deminishing returns on these dumps.

forming another higher low by looks of it..

buy buy buy

Mon, 06/11/2012 - 13:51 | 2515387 brooklynlou
brooklynlou's picture

They'll be lucky to make it to the end of the Euro 2012 tornament ...

Mon, 06/11/2012 - 12:07 | 2514986 stocktivity
stocktivity's picture

The Greek election uncertainty coming up  Sunday will put a ceiling on the markets this week.

Mon, 06/11/2012 - 12:17 | 2515035 financial apoca...
financial apocalyptic contagion's picture

Next time you wanna explain "exponential curves" to some Obama-infatuated socialist or Romney-is-our-savior conservative, explain the half-life of these bailouts.
Ireland- 9-10 months Portugal: 8-9 Greece- 2-3 Spain 2 days!!! Cyprus (ZH rumors rarely wrong): A minutes of CNBC hooplah Italy: Market says fuck you and tanks

Mon, 06/11/2012 - 11:55 | 2514895 junkyardjack
junkyardjack's picture

Those damn shorts just won't cover....

Mon, 06/11/2012 - 12:58 | 2515211 slaughterer
slaughterer's picture

We shorts will not cover because we are correct in our assessment of the situation.  EU = FUBAR

Mon, 06/11/2012 - 11:58 | 2514920 Whoa Dammit
Whoa Dammit's picture

Music to accompany these charts-Elvis Costello Waiting For The End of The World.

Mon, 06/11/2012 - 12:34 | 2515075 ebworthen
ebworthen's picture



Elvis Costello and the Imposters - "American Gangster Time", from "Momofuku"


Next week there'll be some fashionable new sin
For each harlot and each Puritan
Pull off their wings stick them on a pin
And just watch the money roll in

It's a drag
Saluting that starry rag
I’d rather go blind
For speaking my mind
Or use it just like a gag
So raise it in anger
Just let it hang
American Gangster Time


Mon, 06/11/2012 - 14:02 | 2515414 brooklynlou
brooklynlou's picture

Prefer Pink Floyds 'Great Gig in the Sky" with video of asteroid hit ...

(Its in HD Bitchez ...)

Mon, 06/11/2012 - 12:00 | 2514932 Spitzer
Spitzer's picture

Gold stocks performing worse then the dow fuck

Mon, 06/11/2012 - 12:03 | 2514944 VonManstein
VonManstein's picture

not by the close.. reversal coming up

Mon, 06/11/2012 - 12:28 | 2515077 geminiRX
geminiRX's picture

Historically, I have never seen gold stocks behave in such a manner (with gold at such a high price). It is like algo's have been programmed to crush them. Putting back on my tin foil hat now:). I am thinking of buying a couple hundred shares of Newmount mining in the next couple days. 

Mon, 06/11/2012 - 12:57 | 2515203 Spitzer
Spitzer's picture

Im too far in. I cant keep buying gold stocks. Only physical for me from now on.

Mon, 06/11/2012 - 14:34 | 2515551 walküre
walküre's picture

Only physical is key.

Mon, 06/11/2012 - 12:01 | 2514940 Stackers
Stackers's picture

Seal all hatches, and DIVE DIVE DIVE. Make your depth 1 trillion feet

Mon, 06/11/2012 - 12:02 | 2514948 HaroldWang
HaroldWang's picture

Yes market is off the Spain hopium high but remember we just had the best week of the year last week. In reality, AAPL is a much bigger deal today. When it sells off, as it always does on the keynote, the market will really tank.

Mon, 06/11/2012 - 12:04 | 2514966 gojam
gojam's picture

Swiss Francs look good.

That peg isn't going to hold forever.

Mon, 06/11/2012 - 12:12 | 2515012 Ghordius
Ghordius's picture

nothing holds forever. though that floor is cast in concrete, at the moment

Mon, 06/11/2012 - 13:32 | 2515311 gojam
gojam's picture

"at the moment"

If Greece exits, the Euro will rise and Switzerland might take that opportunity to decouple.

But the the Euro will fall again once the contagion risk has been properly considered.

Obviously, that's just a personal view.

 I think you're right for now but how long will 'now' last ?

Mon, 06/11/2012 - 12:05 | 2514970 slewie the pi-rat
slewie the pi-rat's picture

santander couldn't hold its 10% gains?  Hahahaha! 

put the google on that puppy between scratchin yer curlies,  beer runs, and boisterous bongstering, BiCheZ! 

who do they think they are?  BAC?  L0L!!!

ihow many billion euros will the EU and germany pretend they will cover to extend the half-life of these crooks? 

stay tooned...

Mon, 06/11/2012 - 12:09 | 2514988 l1b3rty
l1b3rty's picture

So Goldman Sachs wanted a piece of Spain now!

Mon, 06/11/2012 - 12:12 | 2515011 LeisureSmith
LeisureSmith's picture

Dont worry, our dear leaders got dis under control.Just apply generous amounts of lube and its all good.

Mon, 06/11/2012 - 12:12 | 2515014 Jason T
Jason T's picture

Laroche may finally end up being right.  Transatlantic monetary system blowout.

Mon, 06/11/2012 - 12:14 | 2515018 carbonmutant
carbonmutant's picture

When is a Spainsh Deal not a deal?

Mon, 06/11/2012 - 12:20 | 2515047 Mark123
Mark123's picture

I'll take door #3.

Mon, 06/11/2012 - 12:16 | 2515025 fuu
fuu's picture


Mon, 06/11/2012 - 12:16 | 2515026 Mark123
Mark123's picture

The market cap of Amzn equals the Spanish "bailout".  Think about it.


The entire world is sitting on the most epic overvalued pile of confidence-assets ever created on this crazy planet of ours.  And it is all managed by the most corrupt bunch of thieves ever assembled by organized crime.


How long can it last before the remaining real wealth (that is not part of the ponzi) leaves the table?

Mon, 06/11/2012 - 14:37 | 2515560 walküre
walküre's picture

stealth exit has commenced and is picking up speed

that is the why this market "bounce" won't last and why the rally tanked within hours of the US open

SELLING is key and all this propaganda and pumping over the weekend was supposed to lure in buyers.

NOTHING is working. It's hillarious how they're squirming and frantically trying to offload their paper. I'm amused.

Mon, 06/11/2012 - 12:16 | 2515027 Cupid Stunt
Cupid Stunt's picture

100 billion. Half-Life of what, 4 hours or so LOL.

Mon, 06/11/2012 - 12:18 | 2515037 stant
stant's picture

spailout to spanic to spamic, spam out of your email and back on your plate

Mon, 06/11/2012 - 12:20 | 2515046 YHC-FTSE
YHC-FTSE's picture

dumb euphoria then dumb horror: Spanistic. 

Mon, 06/11/2012 - 12:27 | 2515081 ebworthen
ebworthen's picture

Ever shortening half-life of rainbows and unicorns.

Mon, 06/11/2012 - 12:50 | 2515163 JackT
JackT's picture

No much left of the unicorns.  They've already carved off their horns, hooves, mane, tails, tongues, eyes, and ears. 



Mon, 06/11/2012 - 12:44 | 2515138 Snakeeyes
Snakeeyes's picture

Ibex tanks, CDS rises, 10 yr sovs up 30bps. Time for a fandango!

Or funeral for the Eurozone.

Mon, 06/11/2012 - 13:00 | 2515227 bnbdnb
bnbdnb's picture

FTSE fell off a cliff. Anyone have ideas why?

Mon, 06/11/2012 - 13:13 | 2515261 Cupid Stunt
Cupid Stunt's picture

 People in the know  suspect there's something big coming down the pipe and it ain't good.

Mon, 06/11/2012 - 13:04 | 2515241 SheepleLOVEched...
SheepleLOVEcheddarbaybiscuits's picture


Mon, 06/11/2012 - 13:26 | 2515319 Grand Supercycle
Grand Supercycle's picture

Rally Warning from last week:

'Daily chart now gives bullish warning and significant
SPX rally & USDX retracement should commence in a week or so'

Mon, 06/11/2012 - 15:01 | 2515624 Bam_Man
Bam_Man's picture

"You're gonna need a bigger bail-out".

Mon, 06/11/2012 - 15:36 | 2515753 devo
devo's picture

What "investing public"?

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