Another Tough Morning in Europe

Dialogue with a New York trader, 7:20 a.m.

Occupy Wall Street Protests
Leslie Gersing for
Occupy Wall Street Protests

"Pisani, where you been?"

"Outside in front of Zuccotti Park."

"Zuccotti Park? What are you doing there?"

"There's a protest planned for the NYSE this morning. There's about 200 people outside the park, but it seems like most of them are people taking pictures of other people. The police are everywhere. I had to show my ID to get through. Never have so many covered so few."

"Pisani, the damn world is collapsing, and you're covering a few people in a park."

"Well, there's more than a few..."

"Pisani, have you seen what's going on this morning? The Spanish auction didn't sell. French bonds are blowing out...I go to bed at night and I wake up with a whole new portfolio."

"I know, it's frustrating."

"Frustrating? It's a f***ing disaster every damn day. We got correlation risk, headline risk, we gap down every morning..."

This is what my days are like for the past four months...angry traders yelling at me and sending four exclamation point (!!!!) emails.

Spain did indeed sell 3.6 billion euros ($4.8 billion) of 10-year bonds at a yield of 6.98 percent; a similar maturity last month sold at a yield of 5.43 percent (ouch!). France sold 7 billion euros ($9.5 billion) of two-year and four-year debt at an average yield of 1.85 percent for the two-year (compared to 1.31 for the last auction a month ago) and 2.44 percent for the four year (compared to 1.96 percent).

France's Sarkozy wants the European Financial Stability Facility to get a banking license, the back door way to turn on the spending spigot; Germany's Merkel is opposed.


1. S&P futures moved about 4 points as initial jobless claims, October housing starts and building permits were all better than expected.

2. Automotive parts maker Delphi (remember them?) priced their initial public offering, 24 million shares at $22, the low end of the $22 to $24 price talk. Sure you remember them. They were spun off from General Motors in 1997, delisted in 2005 after filing for Chapter 11 bankruptcy protection after disclosing irregular accounting practices, sold off large parts of the company, the remainder was bought by private investors (Paulson, Silverpoint, Oaktree, and others). Average insider costs: $0.67 (not a typo). The good news: It was profitable last year.

Fairly decent day for secondaries: outpacing IPOs on a 4-1 basis this year, according to David Menlo at LinkedIn did their first secondary, 8.75 million shares at $71 ($620 million), six months after going public at $45. Dunkin Brands sold 22 million at $25.62, the IPO was four months ago at $18. Cigna ssued 15.2 million shares at $42.75.

3. The NYSE is scheduled to respond to European regulators objections to their merger with the Deutsche Boerse today. Process is opaque: no public documents. There is some hope that by the end of November the regulators will make some kind of ruling on the deal.

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