Wednesday, November 9, 2011

Italy Sparks Market Bloodbath: Financial Stocks Collapse

So much for the US decoupling. Following 5 days of persistent refusals to deal with reality, the real world finally came back with a bang, and while the overall market tumbled the most in two months, it is really financial stocks that took the brunt of today's beating. As the chart below shows, the XLF has literally collapsed with most major banks on the ropes, and the broker dealer index down 6.45% the most since August 10. The reason? Italy of course, and the fear that once the country is forced to write down its debt, the bank failures will proceed in waves: first Italian banks, then French, and then everyone else, especially those that have already been in the market's crosshairs for their exposure. And if today was ugly, tomorrow promises to be an absolute bloodbath with Italy deciding to proceed with the issuance of €5 billion in 1 year Bills into what may well be a bidless market.



Italy in bond freefall/ Bond yield surpasses 7.3% on 10 yr/Jefferson county files for chapter ll

Good evening Ladies and Gentlemen: Today was a wild day with the stock market falling by close to 400 points due to the continuing bond problems over in Italy.  Late this evening, Jefferson county filed for chapter 11.  I will be going over many stories on this front, plus the MF Global scandal but first let's head  to the comex and see how things fared over there today.   The price of gold held

ROFLMAO - Don't Get MF'd by Blackrock

Dave in Denver at The Golden Truth - 5 hours ago
"Italian Government paper may as well be toilet paper" - unnamed source Gotta love the entertainment being provided by our corrupt system right now. The big money manager - Blackrock (many of you probably have retirment funds being managed by Blackrock) - has been accumulating a giant position in Italian Government bonds. In response to questions about this, here was Blackrock's response: *BLACKROCK'S ROVELLI: ITALY SPREADS DON'T REFLECT FUNDAMENTALS *(source: zerohedge). That is hugely hilarious. Here's the Golden Truth: that statement is correct - the spreads don't reflect ... more » 

HUI holding in relation to the S&P 500

Trader Dan at Trader Dan's Market Views - 6 hours ago
Traders/investors looking to take a defensive posture in the equity markets continue to see the mining sector as a place in which to find some temporary shelter. While the HUI is getting pulled lower today alongside the entirety of the US equity markets, the sector is holding in relation to the broader market. A good trade has been to spread the miners against the S&P, a trade which I mentioned here some time ago would be a winner for the hedge funds instead of the shortsighted spread trade involving the bullion markets and the mining shares. The hedgies were able to play that trade... more » 

Silver whacked along with Copper as Risk trades are taken back off (AGAIN)

Trader Dan at Trader Dan's Market Views - 6 hours ago
Rollercoaster is too tame of a word to describe the kind of insanity being created in our financial markets by the computer algorithms. Yesterday it was "everyone in; the water's fine". Today is, "Get the hell out; a great white is coming at you". Tomorrow, it will probably be time for a nice yacht cruise again. Who knows and at this point, why even bother attempting to figure it out. First the focus was all on Greece. Now it has shifted to Italy. Next it will probably be Spain and if we get to that, it will be the survival of the entire European Monetary Union that will be called i... more » 

CME working to release transferred MF Global accounts for trading

Trader Dan at Trader Dan's Market Views - 7 hours ago
For the sake of those who read this site and whose accounts were impacted by the mess at MF Global, here is the latest news from the CME Group. The advisory was issued this morning. News Release Issued: November 9, 2011 12:50 PM EST CME Group Provides Update on Customer Account Verification Process in Conjunction With Bulk Transfers of MF Global AccountsCHICAGO, Nov. 9, 2011 /PRNewswire/ -- CME Group today provided an update regarding the process it announced November 4, 2011 to verify customer collateral transferred to receiving firms through the MF Global bulk transfer process, as ... more » 

Italy at breaking point, Merkel calls for "new Europe"

Eric De Groot at Eric De Groot - 7 hours ago
Once a nation defaults, the wolf pack will find its next victim regardless of the number of emergency meetings and/or suggestions of various official super committees. Germany is the key. If the German people turn inward by withdrawing from the Euro zone, trade barriers will likely reemerge and social tension will rise. There’s far more at stake here than whether or not Greece, Italy, Spain,... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

Stagflation Sets In

Dave in Denver at The Golden Truth - 7 hours ago
"At that point, nothing is left but gold. Now trading at $1790, it could zoom right past $2000 to $3000 an ounce" LINK*"Inventories to result in big hit to Q3 GDP"* - It looks like wheels are falling off the U.S. economy. Of course, those of us who have been paying attention to the details beneath the headlines were expecting that the lipstick that the Government and Wall Street have been putting on the proverbial pig would soon wear off. This was the first inventory decline since September 2009. Here's the report: LINK Recall that the Government has estimated that the 3rd quar... more » 

Game Over? Reuters Says Germany, France Exploring Idea Of Core Euro Zone, End Of Existing Structure

If anyone needed the proper epitaph for the insane stupidity out of Europe, Reuters may have just provided it. In an exclusive article, Reuters stuns us with the following: "German and French officials have discussed plans for a radical overhaul of the European Union that would involve establishing a more integrated and potentially smaller euro zone, EU sources say. French President Nicolas Sarkozy gave some flavour of his thinking during an address to students in the eastern French city of Strasbourg on Tuesday, when he said a two-speed Europe -- the euro zone moving ahead more rapidly than all 27 countries in the EU -- was the only model for the future." It gets much worse: "The discussions among senior policymakers in Paris, Berlin and Brussels go further, raising the possibility of one or more countries leaving the euro zone, while the remaining core pushes on towards deeper economic integration, including on tax and fiscal policy." Not sure how to further clarify this: Europe is preparing for its own end, and the dissolution of the existing structure of the Eurozone, which likely means an end to the EU in its current format, a reshaping of the customs union, and the overhaul of the zEURq.PK in its current form. Ironically, this may end up being favorable for the Euro... and detrimental for Germany. So the question is: will Germany go for it? At this point, it probably has no choice, unless it wants a mutiny on its hands.

Fitch Says Italian Insurers Can Not Pass Sovereign Losses => The Time Of ASSGEN, ALZ CDS Has Come

For once, Fitch took the words right out of our mouth, and in the process reminded us that the time of the stupendously named ASSGEN CDS (357 bps, +41 today) is here (for our previous coverage on Generali, read here, here and here). And just because we like to live dangerously, we believe the time has come to knock on the door of the grand daddy of all: Pimco parent, German uber-insurer Allianz, where the crisis will eventually hit like a ton of anvils if and when things really get out of control. ALZ CDS + 12 at 136. Going much wider. After all, recall that the deus ex machina of the EFSF as a CDO Cubed came from, that's right, Allianz. So now that it has failed, guess who has the most to lose... If we had more time we would attach the recent Credit Sights piece on ALZ here, but we don't: we hope readers can track it down on their own.

Reminder: First Nationwide Emergency Alert System Test At 2:00 PM Eastern

As a reminder in 20 minutes we will have the first ever Nationwide Emergency Alert System Test. Just in case, you know, the internet fails and various websites can not be accessed after the test...

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