Look Out Below: Euro Bank Edition
By Barry Ritholtz - August 18th, 2011, 6:45AM
click for updated Stock Futures:
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A 3-5% collapse in European bank shares is leading to worldwide pressure on equities. US Futures down 2%.
Also, I am out of the office today traveling East for the day — you know what that means!
Markets in Europe opened down 2.5%. Leading the decliners are Banks and Miners, and nearly all sectors are in the red. US regulators are looking into the local operations of Europe’s largest banks concerning possible funding issues (see WSJ).
More in a moment . . .
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August 18th, 2011 at 7:27 am
I noted yesterday afternoon that, after going up til about 11am, 10 year yields started declining markedly. 30 year yields also declined although not quite as steeply. Remarked to a friend that this might signal another flight to quality before a big down day.
10 year yields are about at the same levels as in the depths of 2009. 30′s still have about 100bp to go.
August 18th, 2011 at 7:30 am
Seems like we are adding a new meaning to the term “bank on it.”
August 18th, 2011 at 7:32 am
Hadn’t checked before posting, but it looks like 10 year yields are no below the 2009 lows. 30 years are below the 2010 lows, though nowhere near the 2009 lows. I figured when the 30′s get down that way, we are near the bottom.
August 18th, 2011 at 7:40 am
…and gold is up $19…
August 18th, 2011 at 7:45 am
Euro Banks: The can don’t want to go down the road
August 18th, 2011 at 7:58 am
…now, up $25, indeed a flight to quality
August 18th, 2011 at 8:01 am
Looks like time for the Fed to provide the euro banks with some backdoor funding again…we’ll find out about it when Bloomberg or somebody wins their next FOIL case against FED
http://online.wsj.com/article/SB10001424053111904070604576514431203667092.html?mod=WSJ_hp_LEFTTopStories
August 18th, 2011 at 8:04 am
As long as the dipshit ECB insists on vaporizing precious capital by pegging euro zone sovereign debt at uneconomic price levels, our sacred duty is to pound down every freely-traded asset in sight (starting with equities) until these anti-market fools relent or blow out.
Yeehaw — we gonna break the bank of Europe!
August 18th, 2011 at 8:23 am
Weeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee!!!!!!!!!!!!!!!!!!!!!!!!!
More fun in Euroland.
Just wait til those French farmers start flinging their produce in protest. No one flings produce like a French farmer.
August 18th, 2011 at 8:34 am
Angela may think again about bailing out her banks
they dont call them TBTF fro nothin
August 18th, 2011 at 8:38 am
IMHO U.S. financial stocks also something to monitor closely, as they continue to act poorly…my latest blog post from Tuesday, for those interested:
http://economicgreenfield.blogspot.com/2011/08/financial-stocks-update-concerning-poor.html
August 18th, 2011 at 8:42 am
@machinehead: read something the other day that French farmers have been intercepting and destroying Spanish produce at the border. I suppose it’s an unofficial Smoot-Hawley act.
August 18th, 2011 at 9:03 am
I would submit the main reason futures are falling is because the latest PPI and CPI numbers came in disturbingly high, which decreases the chances the Fed will introduce more reckless monetary stimulus going forward.
And as we all know (or should know), it is this reckless monetary stimulus that has propped up asset prices of all classes so high. Wall Street is behaving like an addict when their crack is taken away.
August 18th, 2011 at 9:05 am
“Angela may think again about bailing out her banks’
not to worry Ben Shalom will reenact the Berlin airlift with a Fedbucks transatlantic airlift
August 18th, 2011 at 9:40 am
DAMN IT BARRY!
August 18th, 2011 at 9:47 am
Lawsy, the 10-year T-note yield has been pounded to a new record low of 0.84%.
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=fvx&insttype=&freq=1&show=&time=4
PANIC ON!
August 18th, 2011 at 9:50 am
@machinehead: think you meant 5 yr. My bond stash would love to see 10 year at that level :)
August 18th, 2011 at 9:52 am
Though it does look like the TNX is at a new low also.
August 18th, 2011 at 9:56 am
”French farmers have been intercepting and destroying Spanish produce at the border. I suppose it’s an unofficial Smoot-Hawley act.” — Mike in NOLA
From yo mouf to Bog’s ear:
09:41 Obama bans imports of Syrian oil — MarketWatch
p.s. You’re right, I meant the five-year T-note. Welcome to Japan!
August 18th, 2011 at 10:10 am
At the rate they are going this morning, what you said about the 10 year may not be far off. It’s broken below 2%
August 18th, 2011 at 10:12 am
nothing like the smell of panic in the morning
August 18th, 2011 at 10:51 am
whskyjack:
. . . smells like capitulation.
August 18th, 2011 at 12:07 pm
Rt rktbrkr
I want my moral hazard
There must be a govt put somewhere
Just ramp up th pain