Broken Markets Spreading

For those not "lucky" enough to be involved in the CDS market, liquidity is breaking down in Europe. Main was quoted as tight as 1/2 bp markets yeserday, is now being quoted on 2 to 3 bp markets, mostly by traders who seem to wish they had left an hour ago. XOVER, is at least 5 bps wide, and as much as 10 bps wide, but the dealers still brave enough to send something. This is not good, and although wider, it hasn't yet felt like anyone is reaching and paying too much just to get a hedge on, which makes me think this is not yet over.

 

 

Dexia's Sinister Reality

We have long discussed what we suspect will be one of the first European financials to hit the proverbial fan. Given today's anarchic behavior in the US and European markets (credit and equity) and the continued insistence by TPTB (yes you Mr. Greek finance minister) that this is all due to a speculative rumor-mongering attack, we decide to layout some basic facts on one of the banks that was saved by the Fed/FDIC.

 

 

Official Greek Response To Internet "Rumors" Of Imminent Greek Default

Just as to Italy it is suddenly America's fault the "crisis was sparked", so now it is "internet rumors" who are to blame that the market, at least in the form of CDS, estimates that the country's probability of going bankrupt is, oh, 100%.

 

 

 

Things In Europe Go From Bad To Worse As Germany's FDP Party Seeks Referendum Over EFSF

No sooner has the EFSF "passed" the German constitutional court (with large caveats, most notably that the German government will have a much greater say in any and all future European bailouts, assuming such are actually needed and the Euro does not implode), that we learn that yet another hurdle for the Greek bailout presents itself courtesy of primary fund provider, Germany, which is now finally very angry (as suggested first here "The Fatal Flaw In Europe's Second "Bazooka" Bailout: 82 Million Soon To Be Very Angry Germans, Or How Euro Bailout #2 Could Cost Up To 56% Of German GDP" two months ago) at what it realizes is an ongoing transfer without checks and balances (remember: the insolvent PIIGS hold all the trump cards) of capital from Europe's prudent workers to those who are, well, not. To wit, according to the Spiegel, German FDP Party has just announced that it will seek a referendum on the ESM/EFSF. What this means is that while the hurdle is not insurmountable from a legal perspective, it will merely add further uncertainty to the final bailout of a country that according to the market at least is 100% bankrupt in an alternative universe in which fundamentals matters.

 

The Germans, Italians, French... Most Of Western Europe On The Brink Of Bank Collapse! 

Posted by: Reggie Middleton

Post date: 09/09/2011 - 12:23

You know the saying...It's not paranoia if they're really after you. Europe is much, much closer to universal bank collapse than the media is letting on. You, my friends, are getting a distorted...

Please consider making a small donation, to help cover some of the labor and cost for this blog.

Thank You

I'm PayPal Verified
 

Fed's John Williams: "The Global Financial System Is Experiencing Great Stress"

The global financial system is experiencing great stress as it adapts to the new, post-crisis rules of the game.  Those new rules are both explicit and implicit.  They call for more capital, reduced leverage, lower risk appetites, more thorough supervision, and stronger regulation, at both the systemic and individual institution levels.  In this environment, open dialog is all the more important as we collectively reach a common understanding of how the new rules should work in practice.

Yen Flash Crashes... Again

Timber time. Next up: another round of hopeless and very much helpless BOJ intervention. Because after the FX wars come the trade wars, and after the trade wars come the shooting wars.

BAC Triggers Avalanche Of $7.00 Stop Loss Sell Orders

Is that H₂SO₄ that Warren is pouring for his next deeply introspective bath? Or will he double down and throw good money after bad money that was good as recently as 2 weeks ago (and according to Cramer was supposed to trigger a "massive short covering squeeze in the XLF.")

Guest Post: Euribor-Libor Basis Swap Highlights Funding Stress For EU Banks

I can't take credit for finding this graph of Eur Basis Swap [the cross currency basis swap between 3M EURIBOR and 3M LIBOR], but it seems to be a decent indicator of European banks having difficulty funding their USD business.  Maybe I'm reading more into the chart than there is, but that is what I see going on. It makes sense with all the other data that is out there and the anecdotal evidence that US banks are pulling back their lending to European banks.

Swissie Gold and Euro Gold setting all time highs

Trader Dan at Trader Dan's Market Views - 36 minutes ago

US based analysts continue to approach the gold market with blinders on as they focus exclusively on the US Dollar price of Gold and draw all their views of the market from that perspective. An apt comparison would be looking at the Dollar price of RICE and extrapolating future price action for the global price of this international food without even considering its price in Japan or Malaysia for example. This is shortsighted at least and foolish at worst as it betrays a flawed understanding of the role of gold in the international arena and its function as the currency of last resor... more » 

 

Jim Sinclair Discusses Recent Drivers of Gold Price

Eric De Groot at Eric De Groot - 1 hour ago

[[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

 


more »

Stocks Lower on Euro Debt Crisis Fears

Eric De Groot at Eric De Groot - 2 hours ago

Newton once wrote that a body in motion tends to stay in motion until acted on by an external force. This same observation applies to long-term market trends. As long as the stock to bond ratio remains below the red trend line, headlines will explain stocks weakness in terms of worry about the European debt crisis. An external force acting to change the trend will be applied soon. Large Cap... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]