Hope Fades In European Financials

90 minutes after rumors of forced mergers and recaps and an easing of collateral requirements by the ECB, SocGen (among other French banks) has retraced more than 75% of the gains and senior financial credit spreads have weakened to their widest levels intraday. It certainly feels like any strength is being used to reduce exposure further - even as we wait for Bernanke's Bonanza this afternoon...

SocGen Stock Price

and Senior Financial Credit Spreads are widening...

ES has also just lost overnight lows.

Charts: Bloomberg

UPDATE: SocGen now trades lower than pre-rumor levels