As Expected, Here Comes The Bund Crash As Almunia's Lies Are Exposed
Submitted by Tyler Durden on 02/09/2010 12:02 -0500
11:56 02/09 PRESS: TALK OF BOTH BI-LATERAL,INTERNATIONAL HELP FOR GREECE
11:55 02/09 PRESS: GERMAN GOVT PREPARING SUPPORT PACKAGE FOR GREECE
Citi Breaks Secondary Price, As News Of Big Fat Greek Bailout "In Broad Sense Of The Word" Skyrockets Market, Bunds Crash
Submitted by Tyler Durden on 02/09/2010 11:49 -0500
11:35 02/09 RTRS:GERMAN GOVT SOURCES:EMU IN PRINCIPLE READY TO HELP GREECE
11:36 02/09 RTRS:GERMAN SOURCES:CBANKS,GOVTS NOW STUDYING SUPPORT SCHEMES
11:37 02/09 RTRS:GERMAN SOURCES:AS YET NO DECISION ON CONCRETE AID MEASURS
Sigh, More Almunia Headlines
Submitted by Tyler Durden on 02/09/2010 10:48 -050010:44 02/09 EU ALMUNIA: SUPPORT SHOULD BE IN RETURN FOR GREEK EFFORTS
10:43 02/09 EU ALMUNIA: WANTS EU LEADERS TO SAY THEY WILL SUPPORT GREECE
10:41 02/09 EU ALMUNIA: CURRENT SITUATION MOST DIFFICULT SINCE EMU START
10:41 02/09 EU ALMUNIA: EU SPECIAL SUMMIT THURSDAY V IMPORTANT
10:40 02/09 EU ALMUNIA: NEED TO REESTABLISH CONFIDENCE IN EMU, EURO
10:34 02/09 EU ALMUNIA: NEED TO INCREASE COORDINATION IN EURO ZONE
10:36 02/09 EU ALMUNIA: EMU CAN AND SHOULD SOLVE GREECE BY OURSELVES
More Posturing Or Actual Threat? Iran Warns It Will Deliver A "Punch" To Stun The West On February 11
Submitted by Tyler Durden on 02/09/2010 10:45 -0500While Iran is second in posturing only to North Korea, adding a geopolitical threat to an already simmering liquidity fire is certainly never a good thing to a market engrossed by yet another short squeeze. The Telegraph reports that Iran's supreme leader, Ayatollah Ali Khamenei, has said that the country was set to deliver a "punch" that will stun world powers during this week's 31st anniversary of the Islamic revolution.
S&P Revises Outlooks on Citigroup, Bank Of America To Negative From Stable
Submitted by Tyler Durden on 02/09/2010 10:07 -0500Standard and Poor's whacks Citi and Bank of America, revising its outlook on both firms from Stable to Negative, cites "increased uncertainty about the U.S. government's willingness to provide additional extraordinary support to highly systemically important financial institutions in a way that will benefit debt holders."
First Greece, Now Spain: Moore Capital, Brevan Howard, Paulson As Well As JPM And Goldman Implicated In Spanish CDS Rout
Submitted by Tyler Durden on 02/09/2010 09:47 -0500Yesterday we reported on "concerted hedge fund attacks" rumors involving Greece. Today, via Alphaville, it appears that the mysterious hedge fund cabal strikes again, this time in Spain, and, more relevantly, this time there are names associated. If indeed these are the actors set on setting the world ablaze, they are more than likely the same ones who are involved in Greece, Portugal, Dubai, and elsewhere. Presenting: Moore Capital, Brevan Howard and Paulson & Co... Oh and JP Morgan and, ahem, Goldman Sachs.
More EU Schizophrenia: Almunia About To Admit It's "Plan B" Time
Submitted by Tyler Durden on 02/09/2010 09:19 -0500Headlines only so far:
09:11 02/09 EU ALMUNIA: SERIOUS RISK OF GREEK SPILLOVER ELSEWHERE IN EMU
09:10 02/09 EU ALMUNIA: SITUATION IN GREECE MATTER OF COMMON CONCERN
09:13 02/09 EU ALMUNIA: GREECE MAY NEED TO TAKE MORE MEASURES
09:12 02/09 EU ALMUNIA: SOME SIGNS MARKETS BELIEVE GREECE CAN SOLVE PROBS
09:11 02/09 EU ALMUNIA: COMMISSION FULLY SUPPORTS GREECE
Time For Another Truthfest From Bob Janjuah
Submitted by Tyler Durden on 02/09/2010 09:14 -0500"After not having written at all since early Nov, I am now onto my 3rd note in less than a mth. Apologies for this. But no doubt you will all have figured out that I don't have much value to add whenever the whole world is busy gorging on yet another phase of policymaker sponsored & excess liquidity enabled 'buy fest', which is YET AGAIN designed to fool us into mistaking YET ANOTHER Ponzi Bubble for a real, genuine, sustainable and broad-based economic recovery." Bob Janjuah
Frontrunning: February 9
Submitted by Tyler Durden on 02/09/2010 09:10 -0500- Traders make $8 billion bet against euro (FT, h/t Daedal)
- Greece says call for aid would send "worst signal" (Bloomberg)
- ECB says Trichet travel change due to logistics (CNBC)
- Portugal plans 10 year Euro-denominated benchmark bond issue (MarketWatch)
- Judge promises to rule on SEC, BofA settlement (Yahoo, h/t Daedal)
- US Losing AAA is way to rein in Pelosi, Reid (Bloomberg)
- Death knell? UBS reports higher client outflows, return to profit (UBS)
- Overbought conditions: Junk Bonds show ebbing distress on record sales (Bloomberg)
Early Napkin And Other Thoughts From Art Cashin
Submitted by Tyler Durden on 02/09/2010 08:53 -0500"Hark! Do I Hear A Bugle? Is That The Cavalry Coming? – The Euro is rallying this morning and, thus, so are U.S. stock futures. The catalyst appears to be an announcement that ECB President, Jean-Claude Trichet, is leaving a meeting in Sydney early to return to Europe. The presumption is that he is returning to help set up some kind of rescue package for Greece. Since it’s a long plane ride, we don’t expect any hard news soon. That could keep the rumor alive." Art Cashin
Daily Highlights: 2.9.10
Submitted by Tyler Durden on 02/09/2010 08:41 -0500- Abu Dhabi is set to award almost $2B in onshore oil service contracts.
- Most Asian stocks decline as European deficit concerns increase.
- China's January surge in lending probably exceeded fourth quarter's total.
- Copper imports by China may halve from last year’s record.
- Dow closes below 10,000 for first time in 3 months.
- ECB may be forced to delay exit of emergency lending measures amid Greece concern.
Uh, What Greek Bailout? 8:25 AM ECB NOWOTNY: ECB HAS A CLEAR NO-BAILOUT CLAUSE
Submitted by Tyler Durden on 02/09/2010 08:26 -050007:46 02/09 GREECE SPREAD MOVE FOLLOWS MARKET SPECULATION EU BAILOUT TALK
07:46 02/09 GREECE 10-YEAR VS BUND SPREAD TIGHTENS 18BPS TO +345BPS
and yet
08:22 02/09 ECB NOWOTNY: GREECE HAS TO SOLVE ITS PROBLEMS ITSELF
08:23 02/09 ECB NOWOTNY: NUMBER WAYS COOPERATE ON GREECE USING STRUC FUNDS
08:23 02/09 ECB NOWOTNY: GREECE HAS CREDIBILITY PROB - DUE STATS MISREPORT
08:20 02/09 FRANCE FINMIN: WILL WATCH GREECE PROCESS VERY CAREFULLY
08:20 02/09 FRANCE FINMIN: CONFIDENT GREECE WILL DELIVER ON DEFICIT PLAN
08:19 02/09 ECB LIIKANEN: DECISIONS ALWAYS BASED ON CURRENT SITUATION
08:17 02/09 GERMANY V-CHANCELLOR:NOBODY KNOWS HOW GREECE SIT. TO EVOLVE
RANsquawk 9th February Morning Briefing - Stocks, Bonds, FX etc.
Submitted by Tyler Durden on 02/09/2010 08:17 -0500RANsquawk 9th February Morning Briefing - Stocks, Bonds, FX etc.
The Ever Increasing Parallels Between AIG And Greece... And The CDS Puppetmaster Behind It All
Submitted by Tyler Durden on 02/08/2010 21:03 -0500- AIG
- American International Group
- American International Group Financial Products Corporation
- Blackrock
- CDO
- Cohen
- Collateralized Debt Obligations
- Counterparties
- Credit Default Swaps
- David Viniar
- Dubai
- Ed Liddy
- Eric Kolchinsky
- Fail
- Federal Reserve
- Goldman Sachs
- Greece
- Hank Paulson
- House Oversight Committee
- Housing Market
- Insurance Companies
- Japan
- Lehman
- Lloyd Blankfein
- Merrill Lynch
- Mortgage Loans
- New York Fed
- New York Times
- Portugal
- Rating Agencies
- ratings
- Ratings Agencies
- Reality
- recovery
- Risk Management
- Sovereign CDS
- Sovereign Debt
- Structured Finance
- Subprime Mortgages
- Tim Geithner
- Trading Strategies
- Warren Buffett
As we look forward, we ask, who now determines the variation margin on Greek CDS (and Portugal, and Dubai, and Spain, and, pretty soon, Japan and the US), the associated recovery rate, and how much collateral should be posted by sellers of Greek protection? If Greek banks, as the rumors goes, indeed sold Greek protection, and, as the rumor also goes, Goldman was the bulk buyer, either in prop or flow capacity, it is precisely Goldman, just like in the AIG case, that can now dictate what the collateral margin that Greek counterparties, and by extension the very nation of Greece, have to post on billions of dollars of Greek insurance. Let's say Goldman thinks Greece's debt recovery is 75 cents and the CDS should be trading at 700 bps, instead of the "prevailing" consensus of a 90 recovery and 450 spread, then it will very likely get its way when demanding extra capital to cover potential shortfalls, since Goldman itself has been instrumental in covering up Greece's catastrophic financial state and continues to be a critical factor in any future refinancing efforts on behalf of Greece. Obviously this incremental margin, which only Goldman will ever see, even if the CDS was purchased on a flow basis, will never be downstreamed on behalf of its clients, and instead will be used to [buy futures|buy steepeners|prepay 2011 bonuses|buy more treasuries for the BONY $60 billion Treasury rainy day fund].
In essence, through its conflict of interest, its unshakable negotiating position, and its facility to determine collateral requirements and variation margin, Goldman can expand its previous position of strength from dictating merely AIG and Federal Reserve decision making, to one which determines sovereign policy! This is unmitigated lunacy and a recipe for financial collapse at the global level.
