Broad European stocks are down over 4% in the last few days but that hides the carnage among the most exuberantly excited names on the way up. Portugal, Spain, and Italy have been battered in the last few days (despite everyone explaining how Portugal is so small, contained etc..). Portuguese bond spreads spiked 25bps today as the central-bank-inspired coupling of sovereign-health and banking-system stability drag each other down (Spain and Italy jumped 9bps higher in risk). European bank stocks have cratered and are now negative year-to-date.
European Banks red YTD…
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As the high-beta equity markets collapse…
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Portugal bond spreads blew 25bps higher on the day (despite someone’s best efforts to rescue it in the middle of the day)
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Leaving them at 4-month highs and its biggest 3-day spike in a year…
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Don’t worry though – the people on TV told us that it’s all contained (except that doesn’t explain why Spanish and Italian bonds and stocks are dumping too).
