dani: good morning, this is "bloomberg daybreak: europe". i'm dani burger in london and these are the stories that set your agenda. a quarter like few others, asian stocks tumble following another rout on wall street, over $2 trillion wiped out in just three months. mary daly says recession is needed to curb inflation. an emergency intervention package, a deal on gas caps. putin is said to proceed with annexation of ukrainian territory. there is financial stress rife throughout and this week it was

greeted by the blowup in pension funds when the boe stepped in. there is thinning liquidity, bond deals being shelved, volatility skyrocketing and yesterday was a great example. the moves in this equity market to close out this quarter have been extremely painful. let me show you what stocks did yesterday. following by some 2%, and the vix remains above 30. it went about 30 on monday the first time since june, and has stayed above their everything obey. -- every single day. since 30 is on the lower side, --

it is more than the tech bubble, so these are big losses building up. s&p futures continue to move lower, we have an unchanged dollar. dollar strength has been driving stress, the fact we don't have a stronger dollar today is helping. sterling at one point this morning went back to levels it was before the mini-budget, we are still at 1.11 so it does show the boe did alleviate some of the stress. bond market little changed but the calmness belies what we have seen, strongest volatility on record since the benchmark was created. let's try to get through all of these markets, take a deeper dive, we will be joined by garfield reynolds and enda curran to wrap up the main market themes. we have seen unprecedented daily

swings in u.s. interest rates, swap markets might be flashing a warning that it is draining from the world financial system. we heard from larry summers likening the array of risk in the global economy to be pre-crisis summer of 2007, and as just one example of potential breakdowns. let's get to bloomberg's rates correspondent, garfield, the things we're seeing from u.k. pensions to the quickly drying up amid higher volatility, to what degree is this more than a typical selloff? >> is definitely more than a selloff. it feels redolent of 2007 and 2008 where a range of different markets are at breaking point. that's what happens when the

quibi finishes, that drives -- liquidity vanishes, that drives extremes. it looks like it is the bond market more than anything else that is cracking at the moment. which is understandable, it has been the focus of massive central bank easing and then extremely rapid tightening. it has been thrown every which way and that is showing up in swap spreads you were talking about, volatility gauges, and liquidity measures show treasury liquidity is the worst since 2020. japan's is the worst since 2011. dani: you have the boj stepping into that bond market, the u.k. stepping into that bond market, will we get to where central

banks will have to step in when credibility is really at risk in this climate? >> the u.s. is a fairway away from that both within the market and in the mind of the federal reserve. they are very interested in pursuing extreme tightening and taking accommodation out. i think the last thing they want to do is what the boe has had to do. boe was about to start selling bonds, and it had to turn around and start buying them again. by the way, we will sell them again once we can. that's not a great look for a central bank. dani: if they will sell again, what will the bond vigilantes continuing to test them? garfield helping navigate through the volatility and then liquidity. -- thin liquidity.

the number of americans filing for initial unemployment dropped unexpectedly under 20,000 last week, we are back below 200,000. that suggests despite economic uncertainty there is still robust demand for workers. the fed says markets now understand the message. the san francisco fed president says deep recession is not needed. >> navigating the economy toward a more sustainable path necessitates higher interest rates and a downshift in the pace of economic activity in the labor market. but for now, inducing a deep recession, the kind we had in the 1980's, or some think of the great recession, that is not warranted, nor is it necessary to achieve our goals. dani: or more, let's bring in our chief asia economics correspondent.

i have to wonder, the risk of the fed going too far, if that will be clear to them if what we see is a very tight labor market, jobless claims hitting a five-month low, is this a risk they will have to break something else before they get there? >> there are no signs of cracks in the labor market yet, that's why they are staying the course. we had hawkish rhetoric from bullard and loretta mester, we all know interest rates are going up but they are saying they have got to get up to restrictive territory. and there was commentary around the market volatility out of the u.k. not being enough to slowdown the fed. they are watching how it will spill over globally, but it won't alarm them just yet. there was chatter about recession, but even though the

fed continues to hope they will manage a soft landing, jobs are such a lagging indicator that nobody can be sure where all of this ends up. that is wiped the fed's conditioning markets, they are sticking to their message, borrowing costs, mortgage rates all have to go up. they will continue to push fire until inflation is under control. and then they will take a step back and see what is happening with underlying growth. but it is all about interest rates going one way, certainly no sign of a pivot despite everything in markets at the moment. dani: certainly true, and we are seeing markets realize that there won't be a pivot. enda, thanks so much as always. e.u. energy ministers gathered in brussels, as the bloc tries

to tackle the energy crisis. on the agenda is energy security and a potential cap gas prices. this comes after damage to the nord stream pipelines, what nato calls an active sabotage. joining us from brussels is maria tadeo, what is the outlook for energy ministers, how much does the price leave help? maria: when you mention price relief, that is a good point. if you look at wholesale gas prices, they hit a record at the end of august. this promise of verbal intervention from the european authorities did take some of the heat down. so prices have stabilized compared to those highs. but still this is a lot of pressure for countries across europe that continued to say we are paying too much, this is feeding into inflation and could lead to social tension, we still

need more measures. you alluded to the perennial story, and just to remind everyone because this gets complicated, sometimes i get lost in the many caps the european union is flooding. you have a potential wholesale gas cap, for all gas. and the russian oil cap. there is a lot going on here. but overall in brussels, the way i was presented this was that this is another session of brainstorming, they are not expecting a lot of market moving decisions to be made. a lot will depend on the meeting by european leaders next week in prague. dani: and putin is expected to make a speech in moscow. there was that prerecorded speech we waited for, it didn't come, then eventually it came, we have been on our toes, what

are we expecting and what potential reaction from world leaders to it? maria: this will be top of the agenda for european leaders in brussels. what we know is vladimir putin will address the russian people, he will likely sign a decree to confirm the annexation of those four regions where fake referendums were carried out. the west said they will never recognize it, it is illegal, phony, a scandal through think this was a real vote in a country that is still at war. after that, the reaction for the west will be key, is this an escalation? what does it mean in context of the incident around nord stream? you mentioned the european union saying we are going to protect infrastructure. and nato is saying this is sabotage.

so the escalation feels like it has been a week of escalation on every front. dani: escalation feels like the word du jour. thank you so much, maria tadeo there. let's get into some more corporate stories overnight in the u.s. that is adding to this risk off. we heard from strategists from morgan stanley warning of an earnings recession. some of these historians will probably do little to assuage fears that tracks are beginning to emerge. we had meta last night doing its first budget cut since the company was founded. that includes hiring freezes, tech stocks plunging during the session yesterday. after close, there was micron's announcement, the largest maker of memory chips is slashing production.

and apple is cutting back on iphone production. the same issue of weakening demand. it is not just tech, i.t. fell -- nike fell more than 9%. they are having to push through really steep markdowns. at into that a strong dollar and higher rate costs, and it is clear margins are under pressure. now as to what is ahead, some of the data at 7:00 a.m. u.k. time, gdp and nationwide house survey. cpi from france and if the euro area later this morning. 1:30 p.m. u.k. time, u.s. personal income and spending data and then consumer sentiment. finally, lael brainard is due to speak in new york at 2:00 p.m.

u.k. time, a bit in in this atmosphere. we will take a closer look at swings in interest rate swaps and what they indicate about the state of the global financial system. we will take a look at how the u.k. is faring. this is bloomberg. ♪

dani: liquidity appears to be draining from the world financial system. this look at the daily swings in interest rate swaps. this chart is the gap between floating and fixed rate longer dated swaps, and it has flung wildly this week, it is not just

sofr, other swaps showing volatility. to help us get into it is azhar hussain, royal london asset management global head of credit. before the program started, to what degree is thin liquidity a systematic problem for this market? azhar: what we've seen as extreme volatility, and that has translated to a var shock. the bank of england is stepping in, this is something we have not seen in a long time. i think we can overstate some of the issues, but our pension institute really had a problem midweek.

ultimately, that was due to the change of administration and budget. dani: it is also perhaps the past 10 years of the bond market rally, if you focus on u.k. pensions, is that washed out or is there still a risk of outsized physicians that might force margin calls? azhar: there shouldn't be a sovereignty issue, we had a var shock with an extreme move. i don't really see that being repeated. the concern is we have had a long period of low interest rates. the u.k. is unique in you have got between deficits and a

housing market on the front end of interest rates. that sensitivity makes the u.k. prone to interest-rate chocks. -- shocks. dani: a lot of fed officials have asked does it apply to the u.s.? one fed officials saying there is a difference between worrying about volatility and dysfunction, they are trying to draw that line. at one point do we say it is dysfunction? azhar: i think there are significant differences between the u.k. and u.s. the u.s. is still the reserve currency. our administration has learned it has the position of u.k. does not have. the mortgage market is structured at the long end, they have gone up over 7% in the u.s. but the feedthrough to consumers

takes a long time. what you saw in the gfc was a lot more variable-rate mortgages and that cause recession. in the u.k., we are anchored at the front end, over 2 million mortgages are due to be refinanced. dani: the market is pricing 150 basis points by november, can they do that because of this mortgage story? azhar: i think they can't. the gilt market is pricing swaps going up to 5.5%, i can't see that happening without crashing the housing market and the u.k. economy severely. what is the outlook? unfortunately, a weaker currency. it's almost the only outlet. dani: boe steps in and buys long

dated bonds, but they are still going to you qt, what is to stop on vigilantes testing this market? azhar: policy choices can change. what we're going to need is either fiscal reversal, either tax cuts cap reversed. -- get reversed. more likely, this administration doubles down and cuts spending. that will alleviate some pressure but the rate increases the market is pricing cannot be taken by the u.k. economy. dani: if we are talking about cracks in the u.s., one thing that has struck me is difficulty banks have had in packaging market debt for private equity. we had the citrix one that banks struggle to offload. azhar: right now, we have

spreads and yields in the high-yield market moving by 100 basis points very quickly. in these periods, you don't expect these debt packages to get to the market. actually corporate markets aren't in that bad shape, that is because of covid. dani: spreads haven't widened that much considering what equities and public bonds have done? azhar: there is now a bit of a disconnect between investment rate markets and high-yield markets recently. dani: is that just a factor of duration versus credit risk? azhar: that is an important part, the other part is dislocation. what you saw in the u.k., pension funds having to raise liquid assets, but those are not investment grade. funding is emerging in u.k.

markets, the question is where does the story end? i don't think we are at the end yet, but there is value there now. dani: definitely an interesting time to be a global head of credit. that's azhar hussain, royal london asset management global head of credit. deals for house purchases have been collapsing after lenders pole mortgage offers in response to interest rates. we will talk about it later in the program yet again. this is bloomberg. ♪

>> you are watching daybreak europe, i'm juliette saly in singapore with the first word news. hurricane ian is regaining strength and is set to make landfall in south carolina later today. after leaving destruction across

central florida, and leading to an unprecedented flood. power was knocked out to more than 2.6 million homes. abc news reports at least nine have been killed. meta has outlined plans to reorganize teams and reduce headcount. ceo mark zuckerberg is freezing hiring and restructuring units to trim expenses. meta will likely be smaller in 2023 than it was this year, it is the first major budget cut since facebook was founded in 2004. hsbc is considering vacating its global headquarters in london's canary wharf in 2027. the bank is looking to create a more flexible workspace. it may move to new premises in the british capital. the company says it is not

planning to leave london. softbank group has started laying off employees at its lossmaking vision fund, they expect to cut at least 30% of staff from the london unit. the vision fund recently posted a $23 billion loss with most of that coming from a plunge in valuations for portfolio companies. china is allowing some cities to lower mortgage rates for first-time home purchasers to stimulate the housing market. the cities will be allowed to lower or remove the minimum interest rate until the end of the year. global news, 24 hours a day, on air, and on bloomberg quicktake. powered by more than 2700 journalists and analysts in more than 120 countries. coming up, liz truss's conservative party has its annual conference millions have made the switch from the big three to the best kept secret in wireless: xfinity mobile. that means millions are saving hundreds a year

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dani: good morning this is bloomberg daybreak: europe. i'm dani burger. a sea of red, global equity see $32 trillion wiped out and just months. mary daly says a deep recession is not needed to curb rampant inflation, highlighting the risk of over tightening. eu ministers are set to approve an emergency intervention practice to improve a deal. let my put in -- vladimir putin looking to approve the annexation of ukraine territory per what a quarter and has been, $32 trillion to be precise has

been wiped out from global equities. the amount that has been wiped out not just from global equities but corporate bond since the peak is more than the financial crisis, more than the tech bubble, more than what happened during covid. a lot of destruction of this financial market. yesterday the s&p tumbling more than 2%, the vix has stayed above 30% all week. it is the first time it has been above 30% since june, but it's not just equities. there are cracks beneath the surface. we were just talking to azhar hussain about thin liquidity and high volatility behind this bond market. it is signs of that, it is debt offers, it is an unrelenting type -- tight labor market, hawkish fed and high european inflation sending equities and bonds in just one direction. we have a bit of a reprieve, the s&p 500 futures up .1%, the dollar is weaker, allowing us to do better and the sterling

backup, along the levels before we had the mini budget, the 10 year yield moving ever so slightly lower. this week it was at 4%, some extreme moves in the bond market. i mentioned sterling, let's get back to the story because has been quite the week for the u.k. and u.k. assets. market volatility since the chancellor's budget has been compared to an emerging market country undergoing political turmoil, more than just the turmoil, the move in the sterling versus the bond market as well. after all the mayhem for investors, prime minister liz truss had her party conference running this week and. this comes at a time when polls give the opposition labour party a 33 point lead. that's bring in lizzy burden, who was with us. the mood seems pretty grim heading into the conservative party conference. lizzy: grim, awkward, alarming. the pole that you mentioned is going to be worrying. it is the biggest poll lead any

political party has had since the 1990's i think, more than 20 years. but this is because of the physical plan that fiscal plans. you have tory mps that he is pleading with to get them on the side behind them. some of them in fact calling on resignation after than less than a month in office, just to give the political cover to reverse their plans, but it doesn't look like he is going to do that. we have heard from clotting trust -- that they are digging in. they say that it will lead to growth. listen to this on bloomberg tv. >> we have seen markets be volatile before. sometimes these things can become a vicious circle where people unnecessarily when there is change or something unexpected. lizzy: it is an uncomfortable scene setter for the tory

conference. some of the big political heavyweights will sit out the conference in birmingham. i'm heading up, but he will be in his concision as we in yorkshire to give truss some space. dani: we talked about the radio interviews. they were pretty painful, to put it lightly. lizzy: liz truss digging in, not looking like she will reverse her stance. she is in a difficult situation because if she backs out now she will lose credibility, but if she stays the course you are likely to get more turbulence in the financial markets. bank of america strategists so you can call dollar parity by the end of the year, ouch, so one of her options would be to cut spending to balance the books. our economist at bloomberg economics reckon that she would have to go deeper than austerity in 2010, which will not be politically palatable when you have a cost-of-living crisis and

tax cuts for the rich. she is meeting bosses today, as the guardian reports a highly unusual move. a comes back to the words from mark carney, the former boe governor yesterday, he said the u.k. governments have undermined the economic institutions of the u.k.. the u.k. boe road to the rescue, now they have to ungag. dani: it is all about credibility, lizzy thank you so much. lizzy has given some cracking interviews this week, highly recommend them. let's continue with the u.k. and liz truss' sweeping tax cuts may be bad news for u.k. mortgage holders. they fear the bank of england may have to hike rates to compensate. deals for house purchase have been perplexing. there have been soaring rates

and market for the tilly. for more, let's get to jonathan tice from bloomberg intelligence. jonathan, think use much for waking up early with us, we appreciate it. more portly, jonathan, how are banks reacting to the all this uncertainty? jonathan: good morning. well, the one thing that is most striking, banks use the spot rate. the spot rate for two year and five year fixed mortgages has gone through the roof. the middle of september, to your products were priced at 4%. they are 5.7 percent, 5.8% now. bear in mind rates are being inundated with demand. if you were a first-time buyer with a 95% mortgage and you are not able to use the government guarantee, in the middle of august hsbc would have lent you

money at about 3.7%. it is now 6.7%. that gives you an idea how quickly these rates have moved. clearly first-time buyers are a very important group, and that is the area that politically will be most distasteful to see the pain that is coming. dani: jonathan, this gets to the question of will the bank of england be able to hike to the extent markets think because of this. you broke it down, but if you zoom in on this market, what area of the mortgage market do you think is the most concerning? jonathan: if you step back and look at what happened during covid, the leveling out, with the banking market has done because of the guarantee, the rate that you could get for a 75% lender value mortgage was near the night of her percent rate recently, which was good news for first-time buyers.

that gap is going to blow out now. more critically if you look historically, when the amount a first-time buyer has to spend on their mortgage exceeds 50%, the last couple of cycles that has preceded a housing downturn. you think about where rates have to go, unless they intend to buy a guarantee, where are we at? clearly the one thing that we are thing about is if you raise rates too fast, the banks will cut mortgage liquidity, and that will potentially precede a big downturn in the housing market. dani: ok, jonathan, thank you for setting the scene, jonathan tyce there. joining us now is sonali punhani , credit suisse's chief u.k. economist. are you ok after this week? it has been wild. i can only imagine what it has been like in your shoes. this idea of the floating rate mortgages and the u.k., i posed

the question, but it is for you, can the boe hike to the extent the market is pricing in considering what it would do to this housing market? sonali: it is a very difficult spot the bank of england is in this moment. it will be difficult to go after rates like 6.5% that the markets are pricing. i don't think the boe needs to hike that high. i think the inflationary impact of this plan is unlikely to be that much. i think what is happening is markets are demanding an extremely high risk premium and pricing that in because the credibility of the happening in, the government, the bank of england right now is in question. the boe had an opportunity before the budget was announced to preempt this move and hike more aggressively. they didn't do that, they are postponing their assessment until november. that is getting the markets nervous. they need to come out in november with an aggressive hike. if they do that i think they can

reduce the curve and reduce the overall market pricing. i think the option the bank of england at this point has is the least painful. dani: ok, if they cannot hike as much, they try to reduce the risk premium, is there an element that yields need to be high to attract foreign buyers? it feels like they break that chain of trying to find clear value in the bond market. sonali: i agree, this is not the only thing that needs to happen. there needs to be a different stance taken by the government. we have talked about many things that could happen. one of the biggest problems was this budget was released without an independent assessment by the ob are. people are making their own guesses about how unsustainable this will be. what is required is the obr needs to come out with a folk asked -- forecast that hopefully gives the market some comfort. i think the plan has only had one aspect,. which is the tax cuts

we don't know the other side of the story, we don't know if spending cuts have been announced to pay for this. the assumptions they are making. we need more information from the authorities, and i think in the scenario the option the government has is either to go ahead with this plan without compensation or reach a state where maybe the bank of england has to hike just to get the premium, and then you have a housing crash which is not a good political option. dani: certainly not. you wrote in the notes that the boe has a credibility problem. what can they do to solve that? can they do anything, or is it too far, too late? sonali: we can still try to salvage the situation, knowing strong at december at least a 100 basis point hike pretty dani: what is the level of hikes that could do serious damage to

the consumer because of mortgage rates? is 100 ok? what level will have real damage? sonali: it is hard to have a level, but i think it is the speed of hikes that matters. it is not the absolute level. most economists have said going after 6% would be pretty catastrophic. i think if you are at 4%, 4.5%, that is better. you would generate a slowdown because that is what was required to get inflation under control. it is something that potentially could be managed. dani: what do you make of a sterling that collapsed after the mini budget. you mentioned perhaps waiting for the obr budget. is it a degree of a matter of messaging? sonali: it is all a matter of sentiment at this point. we heard the government is potentially speaking to the obr, that the obr may preform their

forecast, giving confidence to the market. the other thing is the boe intervened wednesday with some purchases of long way to avert a pension solvency crisis. it looks like it highlights the dilemma the bank of england is facing. on the one hand they need to tighten policy, on the other they need to step in with opened and -- open-ended qe. dani: they still said it would happen on october 31. sonali: i think the plan is the purchases they are doing are very temporary, that they will be phased out when the market conditions settle. i think this is buying time for them to sort out the issues they are having. i would assume qe still goes on, but this environment it is hard to tell. obviously it was contingent on stable market conditions.

it is hard to call that stable at the moment. dani: thank you so much for joining us. you will be the first person i call if we get some obr forecast to help me sort through them. sonali punhani, credit suisse's chief u.k. economist. coming up, consumer inflation soaring to euro area highs. we will look at the reading later today. this is bloomberg. ♪

>> we will do what we have to do, which is continue hiking interest rates in the next several meetings. >> i think for most of us, all of us, 50 may be the minimum. >> my choice would be 75 basis

points. >> some have asked for 100, but i don't see that going as fast. >> it is also clear for now we are low the neutral rate. >> as long as we don't get to inflation, we will not have a career -- clear path. >> most probably it is somewhere around 2%, but i accept there are different views. >> we could see higher inflation for september for the euro area, 9.1%. >> the distance to the interest rates that will show 2% inflation over the medium-term is still relatively large. >> this is what we have to do. returning inflation to 2% in the medium-term. >> if we go back and forth, this will send mixed signals to the markets, to our citizens. that is bad. dani: from hawkish to dovish, a

range of tones from the ecb governing council members. some key numbers will also be coming this morning. euro area inflation is likely to have reached a record high as food and energy costs continue to soar. we are waiting on cpi numbers from france and italy. germany posted double-digit inflation for the first time since the euro was created. joining us now is yana randolph, making a special guest appearance. we have had big numbers from germany this week. is the euro area likely to see the same thing? >> very likely, yes. germany was a lot faster than expected. acceleration was expected because of temporary relief measures. some have expired at the end of august. a pay cut was expected, but we saw was a lot more than expected. that is putting pressure on the

eurozone forecast. our economists were anticipating a rate of 9.7% ahead of the german reading. with a bit of luck, or not so much luck, depending on how you see this, the numbers have a good chance of been double digits. dani: how much pressure is on the ecb? if we get double-digit numbers on the back of a fed interest rate hike? jana: we have seen from all the ecb governing council members, especially those from the baltic nations where inflation is even higher, rates above 20%, you have to comprehend what that means. those governors are very, very vocal in saying we need another big step, we need another 75 basis points. we have heard some say, even mentioning 100, which when you look back, this is how all those

above expectation rate hikes have started, somebody floating idea. i'm not saying this is the scenario, but 75 feels baked in, very little resistance because inflation is high, expectations are trending upward and it's very dangerous to keep them anchored. dani: we were talking yesterday and somebody said the sky was the limit, but then they said it's too much. it is interesting the language. and we have energy driving this in a week where we have seen nord stream pipelines go down as well. what policy shifts could we see from energy ministers? how does this factor into everything as they meet in brussels? jana: what we have seen over the week obviously adds yet more uncertainty to what is already a very uncertainty -- uncertain environment. we have seen governments taking action. germany was announcing a big

packet yesterday, trying to can the price of gas. which of course is good for the consumer, but at the same time the main concern is we need to reduce usage. we need to reduce consumption, and price caps make that difficult because people don't feel the very urgent need to do so. that i think is the fine balance that we need to somehow find. i don't want to be in their shoes. but something needs to happen. what that is, maybe we will find out today. dani: can't just encourage consumption with price caps. jana, thank you so much, bloomberg's jana randow. coming up, some of the corporate news today. meta the facebookparent freezing hiring and restructuring of some departments. we will get into that next. this is bloomberg. ♪

dani: happy friday, everyone. a lot of philatelic this week, but there are still some events we are following today, the potential for more volatility. eu energy ministers meeting in brussels to discuss the current supply crisis gripping europe. 10:00 a.m. you key a time we are expecting cpi -- 10:00 a.m. u.k. time we are expecting cpi data. alverson is scheduled to speak in amsterdam. then data on u.s. personal income and spending, followed by the university of michigan consumer sentiment survey. that is something that has dictated some of the fed's policy direction. speaking of which, the fed will be speaking at a conference on financial stability in new york at 2 p.m. u.k. time.

definitely have some thoughts on financial stability, but i want to go over some of the more corporate stories that happened in the u.s. late yesterday, really adding to this risk, adding to a quarter of 32 trillion dollars worth of market value wiped off equities. in the background we have had strategist from morgan stanley all over the past two weeks winning of an earnings recession. some of the stories we got overnight will do little to assuage fear the cracks are beginning to emerge. first there is meta. it happened during market hours, it fell after its first ever major budget cut. that includes a hiring freeze and reorganization. after the market closed we had mike rounds announcement, -- micron's announcement, cutting production, sing demand plunging. that follows the bloomberg scoop about apple cutting back on their new iphone production because of demand. it is not just tech that is under pressure. it is also consumer goods. nike shares falling more than 9%

after hours yesterday, then -- for them it was inventory that was too high. they had been stocking up and to clear it they had to push through some pretty steep markdowns. you added to that the strong dollar, higher freight costs and what you get are margins that are severely under pressure. i told you i was worried about market fragility, stability. a lot going on on this chart, but basically what you need to know is dollar swaps spreads in silver have swung wildly. they have seen some of the biggest daily changes on record. are these crack starting to show up in the market? visit signs something is gone wrong, a bigger rupture along the lines what we saw from the u.k. pension funds this week? but it's friday, we can relax until we have to worry about things like that. have a good weekend, folks.

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