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Spanish Bond Spreads Hit All-Time Record Highs

Tyler Durden's picture




 

Despite all the pats on the back from fellow EU political members and reassurances that all will be well with political reforms, 10Y Spanish bond spreads (the additional risk over German bunds that investors demand before lending money to Spain) just hit all-time record highs. At over 580bps, we are now we well above the pre-Euro era highs (remember focus on spread not yield since Bund rates were so different back then - though current yields remain above the 7% Maginot Line of unsustainability). Spain 10Y bond spreads are now 40bps wide of pre-Summit peak levels and 130bps wider than post-Summit kneejerk reaction lows. But look at stocks and we know all is fixed in Europe...

Short-term...

Medium-term...

Long-term...

 

Charts: Bloomberg

 

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Thu, 07/19/2012 - 09:36 | 2631504 indianajohns04
indianajohns04's picture

That's bullish!

Thu, 07/19/2012 - 09:39 | 2631513 GetZeeGold
GetZeeGold's picture

 

 

New record......not bad!

 

Thu, 07/19/2012 - 09:49 | 2631559 battle axe
battle axe's picture

Hit the alarm bells, DIVE, DIVE, DIVE....So Germany, please open up your wallet. Now time for the distraction phase of the plan, Israel hit Iran so no one will pay attention to this abortion called the EU.

Thu, 07/19/2012 - 10:34 | 2631800 Svendblaaskaeg
Svendblaaskaeg's picture

"Hit the alarm bells, DIVE, DIVE, DIVE"

Das Boot

http://www.youtube.com/watch?v=Nwc0shJ2aYc

Thu, 07/19/2012 - 09:36 | 2631505 Jlmadyson
Jlmadyson's picture

So BULLISH.

I mean come on.

Thu, 07/19/2012 - 09:48 | 2631557 Nothing To See Here
Nothing To See Here's picture

Look at the chart, it's going up aint it? That's obviously bullish, risk on!

Thu, 07/19/2012 - 09:56 | 2631580 DeadFred
DeadFred's picture

The S&P just bounced off the highs of July5th. If it breaks through that it will go to the top of the trendline, today at about 1396. Unless the missles start flying this won't stop until the shorts are gone or something brings in some volume to swamp out the algos. Enjoy it, they're giving you a much more lucrative place to short and we know the bears win in the end.

Thu, 07/19/2012 - 09:37 | 2631507 HellZero
HellZero's picture

If only algos could trade Spanish bonds, it would be a whole different story.

Thu, 07/19/2012 - 09:39 | 2631511 Peter K
Peter K's picture

Interesting developments with the MoU between Spain and the EFSF: This from the DT:

14.04 Open Europe has also been reading the dossier on the Spanish bank bailout referred to at 11.41. The 139-page document was interpreted by some to suggest that any amount not used for bank recapitalisation out of the up to €100bn could be used to buy public debt.

But, the European Commission said the €100bn was only for the recapitalisation of the country's banks and not for any other possible use like bond market intervention.

However, Open Europe write:

This seems to be only a half-truth, though. In fact, the draft agreement does indeed specify that, for the moment, the entire amount is being provided in the form of a "Bank Recapitalisation Facility". However, the document also establishes that Spain can make an official request to move part of the money to another facility, provided that the combined total does not exceed €100 billion.

In any case, the bailout agreement will be wrapped up by eurozone finance ministers in their conference call tomorrow

If the remainder of the funds can be used to buy ESP debt, this would mean that the EFSF is directly funding a member state, i.e. Eurobonds. And this is very against the German constitution, and I mean very :)

 


Thu, 07/19/2012 - 09:39 | 2631512 Beastmanager
Beastmanager's picture

What a mess, fire some politicians all over Europe, fast!

Thu, 07/19/2012 - 10:18 | 2631702 odatruf
odatruf's picture

And replace them with whom?

It's not elections have done any good recently.

 

Thu, 07/19/2012 - 09:39 | 2631516 Doubleguns
Doubleguns's picture

Wait till next week.

Thu, 07/19/2012 - 09:42 | 2631530 Dr. Engali
Dr. Engali's picture

That long term chart pretty much tells the story. Back to pre EURO levels, it sure doesn't look promising.

Thu, 07/19/2012 - 09:43 | 2631537 RobotTrader
RobotTrader's picture

Newmont Mining grinding it out at multi-year lows.

 

These gold companies seem to trade inverse to Spanish bond yields tick for tick.

Meanwhile, industrials like PPG are hitting new highs, consumer stocks like Walgreens up 14% today.

Oh well, still waiting for the apology from Peter Schiff, Eric King, and all the rest to those who followed their advice and saw their accounts vaporized.

Thu, 07/19/2012 - 09:51 | 2631566 disabledvet
disabledvet's picture

If you track the price of gold relative to the alleged price of the debt that countries are pawning off on the world the picture becomes all too clear: there is no worse paper to own that government paper. At some point even a gold miner will find a way to make money "to pay the government bills" as well. Of course we'll probably all be part of the Borg Collective by then so we won't even know what we are at that point...let alone who.

Thu, 07/19/2012 - 09:44 | 2631538 tmosley
tmosley's picture

Marco II, bitchez.

Thu, 07/19/2012 - 09:47 | 2631548 HD
HD's picture

I wish the real human cost of collapse wasn't so high because it needs to happen to clear the system. Of course, none of the bankers or politicians who caused the crisis will feel any significant pain.

Thu, 07/19/2012 - 09:55 | 2631579 Doubleguns
Doubleguns's picture

Of course, none of the bankers or politicians who caused the crisis will feel any significant pain.

 

Get a rope. Problem solved.

Thu, 07/19/2012 - 10:03 | 2631613 HD
HD's picture

Rope? You're a much more kind hearted soul than I.  I'd lock them in with a pack of starving dogs...solve two problems.

Thu, 07/19/2012 - 11:07 | 2632006 graneros
graneros's picture

The Germans used to hang Partisans on meat hooks.  A particularly gruesome way to go.  The unlucky person was hoisted upon the hook placed under his/her jaw.  It could take up to 2 days before their weight would cause the hook to penetrate fully in to the  brain and finally death.  Now I'm not advocating this method but it was rather effective.  The Germans didn't have a huge Partisan problem until late 1944 into 1945 when it was obvious they were going to lose the war.

Thu, 07/19/2012 - 09:47 | 2631553 Meesohaawnee
Meesohaawnee's picture

now you can lock SPY 1400. book it. the worse the news the bigger the fraud the more ben ramps the algos to mask reality from the sheeple

Thu, 07/19/2012 - 09:49 | 2631558 RobotTrader
RobotTrader's picture

European investors in a full fledged panic to buy U.S. stocks.

 

S & P 500 hitting new world record highs in both Euros and Swiss Francs.

http://www.wallstreetbear.com/board/view.php?topic=103547&post=376895

Thu, 07/19/2012 - 09:58 | 2631592 Rainman
Rainman's picture

Europeans obviously have more confidence in our ponzi versus their ponzi ! Winning !! 

Thu, 07/19/2012 - 10:09 | 2631624 Village Smithy
Village Smithy's picture

This is interesting. If these full-retard equity markets start to suck in bond money good-bye EU. If this continues look for a manufactured mini-crisis to take the bid out of equities.

Thu, 07/19/2012 - 09:50 | 2631563 allbetsoff
allbetsoff's picture

Que volvemos a la peseta ya!!!  

Thu, 07/19/2012 - 10:20 | 2631717 Txo
Txo's picture

It s even more worrying when the auction like today s was shite and mkt still doent seem concerned. It s like having a dumb child, he won t disappoint you cos you have no expectations  on him.

Thu, 07/19/2012 - 11:17 | 2632085 The1Ash10
The1Ash10's picture

In.  Feeling bullish about this whole picture. 

Thu, 07/19/2012 - 13:56 | 2632875 lightyear
lightyear's picture

Euro zone bond rates on one page ... updates daily.

http://lightyearlounge.wordpress.com/2011/07/11/euro-zone-two-year-bonds/

 

 

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