Financial, Real Estate, Stock Markets Trends and Current Affairs

The headlines of the MSM and the financial pop media are all ablaze with lines such as:

1. Next Crisis? Why Markets Are So Worried About Italy Now (CNBC)
2. Italy leads surge in sovereign debt risk (Financial Post)
3. Gold Climbs to Six-Week High as Greek, Italian Risk Stokes Haven (Bloomberg)
4. Spain and Italy risk being sucked in (FT.com)

I invite those who have not already done so to look at things the BoomBustBlog way, thus stay ahead of the curve. Italy's funding issues are a foregoen conclusion! Taking a look at a financial cynics (second) favorite blog on the topic...

10 Year BTP = 6.66%; Italian Treasury Cancels November 10 Bill Auction

Save this one for the archive files: The Italian 10 Year yield is now at precisely 6.66%. Alas, we doubt it will stay here for long: the Italian Treasury just announced it was cancelling its November 10 3 Month BOT auction due to, wait for it, "lack of specific cash requirements." Stick a fork in it.

Is 6% The Point Of No Return?

With Italian 10 year bonds crossing the 6% yield threshold, it is worth seeing how other bonds behaved. It is too early to tell what path Italy will follow, but at least for the other countries, they traded similarly prior to the breach, and followed similar paths after the breach.  Italy is too big, that I don’t think it can turn like Ireland did.  If Italy moves much further, I think it will follow Portugal and Greece.  They don’t have months to fix this, they have weeks, and they have been squandering them.

Italian Cash 5s10s Curve Inverts For First Time Since 1995 and Five Times Is Not The Charm For ECB BTP Intervention Today:

UPDATE: BTP +483 over Bunds now as Px drops below EUR 87.5 as all ECB buys are now underwater

As 10Y BTP spreads to Bunds hover around 25bps wider on the day, the ECB's bluff has not only been called but they have been the sucker at the table no less than five times already today. With the spread between 2Y and 10Y BTPs also having dropped (yield curve flattened) over 30bps, the Italian bond complex is sending some rather disturbing messages. And for all those who feel the need to blame speculators - CDS is actually outperforming bonds as real money leaves Berlusconi's Bonds in a hurry.

These headlines are from JUST THIS MORNING. I warned that Italy's funding situation was just that much biscotti in 2010. Subscribers reference Italy public finances projection. Over the summer I made it clear that Italy was simply a contagion transmission mechanism, to much, much bigger fish. As we reminisce...

Wednesday, 03 August 2011 France, As Most Susceptble To Contagion, Will See Its Banks Suffer

In case the hint was strong enough, I explicitly state that although the sell side and the media are looking at Greece sparking Italy, it is France and french banks in particular that risk bringing the Franco-Italia make-believe capitalism session, aka the French leveraged Italian sector of the Euro ponzi scheme down, on its head.

I then provide a deep dive of the French bank we feel is most at risk. Let it be known that every banked remotely referenced by this research has been halved (at a mininal) in share price! Most are down ~10% of more today, alone!

•  French Bank Run Forensic Thoughts - Retail Valuation Note - For retail subscribers
•  Bank Run Liquidity Candidate Forensic Opinion - A full forensic note for professional and institutional subscribers

I also provided a very informative document for public consumption which clearly detailed exactly how this French bank collapse thing is likely to go down:  French Bank Run Forensic Thoughts - pubic preview for Blog - A freebie, to illustrate what all of you non-subscribers are missing!

For those who claim I may be Euro bashing, rest assured - I am not. Just a week or two later, I released research on a big US bank that will quite possibly catch Franco-Italiano Ponzi Collapse fever, with the pro document contianing all types of juicy details...

• Contagion Forensic Review - Retail
• Contagion Forensic Review - Professional