Spain CDS Surges Just Shy Of Record As Spanish Bank ECB Borrowings Go Parabolic

Tyler Durden's picture


On Easter Friday we presented the parabolic egg that Italy laid in March in the form of Italian bank borrowings from the ECB, which had surged by a record €75 billion to €270 billion from €195 in one month. Of course, since the US market was closed and everyone was preoccupied with the ugly NFP report, nobody paid much attention. Today, however, everyone is paying attention as Italy's counterpart in the unsalvageable periphery - Spain, just posted its monthly consolidated Eurosystem borrowings update for March. And if last week's Italian data was the Easter egg, today's parabola is the Friday the 13th funny, because Spain bank borrowings from the ECB in March soared by... €75 billion, or precisely the same amount as Italy, to €227.6 billion, the highest ever, and a 50% increase over the €152 billion in February. The result: Spain CDS touching 491 bps according to CMA, just 2 bps shy of the November all time wides. Other securities impacted: 10 Year Spanish yield + 10 bps to 5.92%, and a spread over bunds now well into the 400 bps, or 418 bps to be precise. Italy is also catching the contagious bug, with its own 10 year starting to grind wider yet again, now at 5.47%. We have the feeling as more wake up this morning, that this latest glaring confirmation that the PIIGS banks now exist solely courtesy of the ECB, will not be liked by many.

Spain bank borrowings from ECB:

And Spain and Italy bank borrowings from ECB:

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Fri, 04/13/2012 - 07:02 | 2341021 Ghordius
Ghordius's picture

The eurosystem at work, which includes shadowing and matching the dollarsystem.

Translation: price stability.

buy gold, bitchez, it's fantastically undervalued, IMHO.


I nearly forgot: ban those demonic derivatives like CDSs, or at least force the now fully political-economy banks to split into their previous denominations. It's our money they are gambling with. CDSs are not insurance, they are bets, funded by you.

Fri, 04/13/2012 - 07:19 | 2341033 GeneMarchbanks
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'I nearly forgot: ban those demonic derivatives like CDSs, or at least force the now fully political-economy banks to split into their previous denominations.'

How many times do we have to go over this? You can't ban them. They are the entire reason why we can have the media complex spew this 'Spain is next' narrative. It is next, not because of underlying economic factors, but because it has been decided. The hit was planned and is chronologically on schedule.

Fri, 04/13/2012 - 07:25 | 2341040 Ghordius
Ghordius's picture

No, I still refuse to believe this. In my worldview, the road to Hell is paved with good intentions and walked by greedy little selfish steps, not planned by the devil.

You ask for a great babylonian reset or biblical debt-forgiveness. I might be just asking for a way to do it gradually and without too much bloodshed.

In an interview I can't find at the moment even the "doing God's work" Squiddie-in-Chief was wondering if CDSs should not be banned.

Fact is, someone should take the toyz away from the boyz, and this kind of grown-up attitude can't be expected by the Masters of the Universe.

They are human - terribly so - too. Expecting that Daddy or Mommy has a plan is what children do - and sometimes grownups (no personal offence meant, just a general farting in the direction of the Grand Conspiracy theorists).

Fri, 04/13/2012 - 07:26 | 2341048 Oh regional Indian
Oh regional Indian's picture

I say it's the vile plan according to my theory..... the Cross of Evil...



It is as per plan. And it will be spain.

Italy is safe, it "houses" the Vatican.


Fri, 04/13/2012 - 07:37 | 2341064 Ghordius
Ghordius's picture

I very humbly (and respectfully versus you personally) fart in the general direction of you axis-of-evil theory.

Knowing the Vatican a bit and having personally experienced a few mishaps with the Vatican's skeletons-in-the-closet petty corruption I am very impressed by how powerful this very old and strange organisation seems to be. Sorry, they are not. There are pockets of organized Catholic "mafia-like" power in Spain and in those strange American Catholic circles, but they are quite irrelevant in the Grand Scheme of Things.

The "Nexus of Power" is not located in Rome, it's devided between New York and the City of London.

Fri, 04/13/2012 - 08:00 | 2341098 Oh regional Indian
Oh regional Indian's picture

No nooooooo Ghordius. The Church, she is the heart of it.

Global Pedopheila, no convictions? Globally? You are saying this beast has no power?

Representatives in EVERY NATION ON EARTH, tithing, tax free.

They could write on and off the Knights Templar, which is...well, let's say fairy powerful to say the least.

Every one in the western world that matters has been seen kissing the pope's ring.

Not powerful?


I place a reflective concavity in your general direction, so you may wallow in your own arial performance ;-)


Fri, 04/13/2012 - 08:58 | 2341210 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

ORI, the Knights Templar have not been in existence for about 700 years.

Fri, 04/13/2012 - 09:20 | 2341247 hedgeless_horseman
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There is no reason to panic, friends.  European banks have a 1% reserve ratio.


In India, they are looking to drop to 0.75%.

Nothing instills confidence like a sub-one percent reserve!

Fri, 04/13/2012 - 07:44 | 2341063 GeneMarchbanks
GeneMarchbanks's picture

someone should take the toyz away from the boyz

They are the Apex, there is no someone unless you speak of yourself.

It's not about conspiracy, it's about exploitation and manipulation. Human? That is funny, look around, I bet you can find at least a couple of solipsistic infrahumans without even trying. Especially if you're at 'work'...

Fri, 04/13/2012 - 07:50 | 2341087 Ghordius
Ghordius's picture

still human. and they feel, even if they might only experience solipsistic feelings devoid of human empathy.

and some of "them" are even realizing that even their lives can be seen as that of rats furiously running on threadmills.

most of them need a scoring board. something to account their achievements. something to show that there is a reason to be driven.

they are not the Apex, they pose as it, but secretly they (yes, IMO) crave Daddy telling them: "Well done, now you can stop, good boy".

And you know what? I have some hope for the (ex-?) squiddies like Monti, Papademos and even Draghi. I believe that if you give them the right job - something that is not measured by a bonus, something that implies some responsibility, they might do wonders.

Up to now, IMO, they are doing a reasonable job. Given the circumstances.

Fri, 04/13/2012 - 07:42 | 2341072 disabledvet
disabledvet's picture

those "toyz" are created by YOUR governments. they allow YOUR governments to "roll over their debts" and continue to function. YOUR governments have now added a BAILOUT regime because YOUR governments refuse to honor the contracts. Whatever you think of the CDS you still have no plan to create NEW PRIVATE SECTOR DEBT. Go ahead..."drive down those interest rates." There are now TWO Europes!

Fri, 04/13/2012 - 07:57 | 2341097 Ghordius
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I don't get your point. The FED sets ZIRP, the world follows. The european construct is a response to the American.

I'm not assigning blame, IMO we are just all still under the shadow of the decisions of Nixon, Reagan and Tatcher.

Fri, 04/13/2012 - 06:59 | 2341022 trampstamp
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The doves will take care of that. There will be a mention of QE again and again... /sarc.

Fri, 04/13/2012 - 07:00 | 2341023 bullmkt
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no reflected in EURUSD i think.

bullish:) just like all doom and gloom from yesterday.Bears are suffering since mid Dec as the market is less than 3% from the top and over 100% from the bottom:) 

Fri, 04/13/2012 - 07:02 | 2341026 Boilermaker
Boilermaker's picture

Looks like the ES every morning.

Fri, 04/13/2012 - 07:03 | 2341027 Boilermaker
Boilermaker's picture

BOOM goes the dynamite!

Fri, 04/13/2012 - 07:10 | 2341029 PaperBear
PaperBear's picture

Why is anyone still buying CDS contracts ? The Greek CDS contracts are being torn up -

Fri, 04/13/2012 - 07:53 | 2341092 tarsubil
tarsubil's picture


Fri, 04/13/2012 - 07:13 | 2341032 tabasco71
tabasco71's picture

C'mon gold!!!!

Fri, 04/13/2012 - 07:15 | 2341034 wang (not verified)
wang's picture

JPM beats (surprise)


and this little note on TBTF

Treasury & Securities Services reported record assets under custody of $17.9 trillion (how big is the US economy?)


Fri, 04/13/2012 - 07:19 | 2341036 Zero Govt
Zero Govt's picture

Sweeties from Central Bankers 

..must be Christmas

...if only everyone ran a business with a CB as back-stop ..banking is such a cushy job and not a regulator or audtior in sight waving red flags on 800+ insolvent banks across Europe

what an 'industry'

Fri, 04/13/2012 - 07:15 | 2341037 firstdivision
firstdivision's picture

WTI surging on this awesome news....

Fri, 04/13/2012 - 07:18 | 2341038 LongSoupLine
LongSoupLine's picture

Euro needs to drop below 131.50 or lower with conviction before I believe pain has begun.

Fri, 04/13/2012 - 07:27 | 2341049 Koffieshop
Koffieshop's picture

You mean EUR/USD? Give me a break.....
They are both circling down the drain. Whichever sinks faster is of secondary importance.
What matters is that petrol is going to go up, up, up, up.........

Fri, 04/13/2012 - 08:37 | 2341161 LongSoupLine
LongSoupLine's picture

yes, eur/usd,  and to further clarify, i mean for a day or swing trade, not so much longer term pain.

Fri, 04/13/2012 - 07:25 | 2341044 writingsonthewall
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Fri, 04/13/2012 - 07:31 | 2341053 PaperBear
PaperBear's picture

The CNBC crew just handed around a gold bar, I think it was 1kg. They had better test that it hasn't been drilled out and replaced with tungsten.

Fri, 04/13/2012 - 07:35 | 2341059 The Axe
The Axe's picture

If they add Chipotle (CMG) to the index they could turn around that

Fri, 04/13/2012 - 07:37 | 2341062 Non Passaran
Non Passaran's picture

Added 3oz today, thank the ECB very much for ze stabilitee

Fri, 04/13/2012 - 08:44 | 2341178 Peter Pan
Peter Pan's picture

The PIIGS are the ECB's best customer, so why don't they make a takeover bid for the ECB so they can print to their heart's content.

A raid on the homes of the previous defence Minister of Greece (accused of money laundering and accepting bribes from foreign entities) came up with a hoard of ten gold bars and sovereigns.

Now conect the above two dots and the straight line should lead you to your local bullion dealer.

Fri, 04/13/2012 - 08:50 | 2341192 virgilcaine
virgilcaine's picture

Liftoff..we have liftoff of the Spain debt disaster.

Fri, 04/13/2012 - 08:52 | 2341200 1835jackson
1835jackson's picture

Game of musical chairs here. Which bank(s) will fall? Depends which politician the chairman of the bank knows I suppose and what his sway is with the ECB.

Fri, 04/13/2012 - 09:00 | 2341221 surf0766
surf0766's picture

Give all the EU countries EBT cards. Problem resolved.

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