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Spanish CDS Over 600bps Sends S&P Under 1300
There is little doubt what the world's pivot security is for now - Spanish sovereign debt. 5Y Spanish CDS just broke above 600bps for the first time ever and S&P 500 e-mini futures reacted by breaking below 1300. Lots of moving parts in Europe's sovereign markets - Spanish bonds were modestly bid today even as CDS was gapping wider - but if one steps back and looks at the basis (the spread between bonds and CDS) this makes sense as it had reached almost 100bps offering basis traders the opportunity to buy bonds and buy protection. We suspect few are outright shorting Spanish bonds here now and the marginal offer is a long-seller but with basis traders still active, do not focus entirely on bonds as evidence of anything until the basis contracts.
European Sovereign CDS...
European Sovereign CDS-Cash Basis...
note the bounce in Spain's basis today (light blue line -red oval)
Finally recall what we warned, citing Citi, two weeks ago:
"Our impression is that markets will need to act as the proverbial 'attack dog', forcing the issue on the political agenda. We can't escape the sense that it is probably politically easier to let the markets run loose for the time being to make it apparent that further intervention is needed. But 1000bp on Crossover is much closer than you imagine." In other words, Citi just gave the green light for the bottom to fall from the market just so Europe's increasingly impotent political elite does something, anything. Look for many more banks to sign off on the same letter.
We still have a way to go...
Facebook now at a $26 handle...9 days after reaching $45 on the IPO release...
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Spain would gladly pay you 600 burgers tomorrow for one today. Winning.
Geeeeee.... I wonder why rumors of a "bank holiday" are circulating? LMAO
Let's see. Bond prices in the US are skyrocketing. At these levels, you'd think the US just hit the 2nd greatest depression... with QE4 certain now, something smells rotten in Harlem...
Pass the EuroBONG buddy!
Gold is back to Green again, nice try though!
Yes, and bond yields are crashing. This will allow the government to steal even more and loan itself even more (I mean there is no real cost for captial right? especially once rates go negative - FAIL). hence, an infaltionary orgy in things you need. Do people really expect retirees to become bond-traders in order to survive? FAIL. All paper burning, the "fire" in U.S. paper and the dollar has simply slowed. Get physical assets of real value or kiss your future and that of your children bye-bye. And hey look, gold is green again. Imagine that.
Gold is green, Facebook is red
..and so's Blankfein and Bernankes faces
this market has some teflon in it..with all this bad news the last few weeks the spx should be at 1250 right now.yet it is still hovering at 1300
Article and/or chart needs a time stamp. I show LOD on .SPX at 1300.38
OK, now we've got 1299.57
It's not Teflon. It's a rocket powered pogo stick.
It's tougher than teflon. It's called hope. And when it breaks, watch for the plunge.
Odd we spell it differently. You spell it h o p e and I spell it m a n I p u l a t I o n.
Where are those sovereign (S&P, etc.) ratings (downgrades)?
YOU SHALL NOT PASS !!
If they could somehow just borrow some more money this would all be fixed.
why borrow when you can 'Print'
it's the easiest of options, as preferred by bankers and politicians
Wake me when they go below 1200. I'll wake the Fed when they go below 1100.
Hell, they're still green for the year with 1258 as break even and 666 as broken.
Exactly, this is hardly a crisis. US equities better realize they need to go down to go up...
There's a whole lotta air between here and 1075/1050
Down goes Frazier 1300, down goes Frazier 1300.
http://www.youtube.com/watch?v=JZEIMQ42-oU
Too funny! I want Howard Cosell resurrected as a financial play by play announcer.
BTW can we find an industrial strength hairdryer and melt that Faceberg for good?
Is that the shrinking banker bonus pool? Should we start up a "preserve the banker from the global financial meltdown" fund?
NOTHING EVEN CLOSE TO CRISIS UNTIL SP BELOW 800
That looks like fun actually.
What do you mean hardly a crisis?......right now some poor banker is crying because the bonus pool is shrinking.......for crying out loud man think of the bankers!
Bullish!...for Treasuries
$600 trillion in derivatves and $300 trillion in the US. The Fed better act before the whole house of cards collapses. Debts in the world are too large to be maintained let alone paid down. The only solution is more paper. What is taking so long?
"The only solution is more paper" - Wrong, the only solution for the world is to default and clear the bad paper. Not such a good thing for the owners of the Federal reserve bank, but fuck them.
The banks will not agree to clear the bad paper. So they will keep on adding more paper until everything collapses. How many trillions of bad paper will have to be cleared?
No one knows and clearing one bad debt will lead to other bad debts in this interconnected system of $600 trillion in derivatives.
Your solution is the right medicine but it should have been administered decades ago. Now the patient is dead.
The paper games will continue before the final collapse and clearing of bad debts.
That is why they relentlessly attack gold and silver now. Nothing must be allowed to threaten the hegemony of fiat money.
The powers that be (FED, ECB, IMF) did not come this far just to quit now. Ctrl-P.
"the patient is dead."
Festival time for our Financial Maggots.
Exactly. The banks can 'buy' elections for around 0.0000001 of what they hold in derivatives.
Not going to happen.
If it does the very next day the yuan goes gold backed
and becomes the new reserve currency.
That's no solution.
What the hell? More paper? What needs to happen is the bad paper needs to clear. That last thing we need is more paper.
Keep on rockin in the "free" world!
So I wonder if this causes JPM to sweat a little more.
JPM is GREEN and will not break $33 Maginot line, even if SPX goes to 666.
Gold be green now.
Two days in a row where Gold has resisted an (obvious) selloff attempt.
FB at $27: isn't this Wall Street's way of showing how incompetent and idiotic Zuckerberg is?
no it's a 1 fingered salute from investors to the Pump & Dump apes on WS
FB now a $26 handle. What a farce.
And with the USD climbing, the SP500 should continue to fall - SP500 is denominated in USDs as we all know.
http://bullandbearmash.com/index/sp-500/daily/
Have no fear, for Brian Sack is here. Green by 3:15pm!
FB could see $25 handle today if the algos gang rape it.
I am scared. I am scared. I need to buy US Treasuries.
The Troika will need to act soon but it's anyone's guess which rabbit they will attempt to pull out of the hat. A supposedly "big" announcement over the weekend (Sunday night?) should not come as a shock. Regardless, further opportunities to kick this can down the road are becoming slim.
http://bubblesandbusts.blogspot.com/2012/05/spains-cds-going-vertical.html
Dow stick save! Can the bears shove the rebound down the PPT throat?
CAT and JOY don't matter! BTFDNESS!
We've been trading this by buying U.S. Dollar Index futures. Simply the best house in a bad neighborhood.
http://blog.commodityandderivativeadv.com/2012/05/17/greek-default-immin...
RESISTANCE IS FUTILE........
Fuck you Bernanke...!!!
The S&P has no businesss being anywhere close to 1300. It belongs at about 600 based upon fundamentals.