• Reggie Middleton
    02/09/2010 - 05:12
    The levered assets of the banks in many Euro-sovereign nations easily outstrip those nations' GDP's. So when the nations' banks get in trouble from bad banking practices (and a very large swath have), the nations themselves are helpless in attempting to truly save the banks (and instead only institute a bait and switch wherein private default risk/insolvency potential is swapped for public manifestations of the same).
  • madhedgefundtrader
    02/09/2010 - 07:22
    The rug may about to be pulled out from under the market. The onslaught of contradictory news coming out of Washington is wearing the market down. An exclusive interview with Andrew Horowitz of The Disciplined Investor.

Tyler Durden's picture

As Expected, Here Comes The Bund Crash As Almunia's Lies Are Exposed





We have been vocal opponents of the long Bund trade for well over a month. Today, on news of the Greek bailout, the Bund yield is surging as the 10 year Bund plunges to session lows. Sorry Pimco, you lose this one. And here are some more headlines to rub salt in the wounds of all those idiots who bought Almunia's blatant lies about no Greece "Plan B."

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




Tyler Durden's picture

Citi Breaks Secondary Price, As News Of Big Fat Greek Bailout "In Broad Sense Of The Word" Skyrockets Market, Bunds Crash





Citi just broke the $3.15 secondary follow-on price after, as we disclosed first, S&P stated there was no longer a guarantee that TBTFs would have perpetual government support. And at precisely the moment when everything seemed like we were about to head into the red, here comes a rumor from Reuters that governments have decided "in the broad sense of the word" to help Greece, according to a senior German ruling coalition source. How this translates in Euro strength is unknown. How this jives with Greece's earlier statement that a call for aid would be the worst signal is also unknown. Yet look at the jump in EUR-JPY pair - the surge in the market as a result is a side-effect. Moral hazard is now global.

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




Tyler Durden's picture

Sigh, More Almunia Headlines





10:44 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




Tyler Durden's picture

More Posturing Or Actual Threat? Iran Warns It Will Deliver A "Punch" To Stun The West On February 11





While 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.



Tyler Durden's picture

S&P Revises Outlooks on Citigroup, Bank Of America To Negative From Stable





Standard 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."



Tyler Durden's picture

First Greece, Now Spain: Moore Capital, Brevan Howard, Paulson As Well As JPM And Goldman Implicated In Spanish CDS Rout





Yesterday 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.



Tyler Durden's picture

Yes, Credit Traders Have A Sense Of Humor Too





 

 




Tyler Durden's picture

More EU Schizophrenia: Almunia About To Admit It's "Plan B" Time





Headlines 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




Tyler Durden's picture

Time For Another Truthfest From Bob Janjuah





"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



Tyler Durden's picture

Frontrunning: February 9





  • 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)



Tyler Durden's picture

Early Napkin And Other Thoughts From Art Cashin





"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



Tyler Durden's picture

Daily Highlights: 2.9.10





  • 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.



Tyler Durden's picture

Uh, What Greek Bailout? 8:25 AM ECB NOWOTNY: ECB HAS A CLEAR NO-BAILOUT CLAUSE





07:46 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




Tyler Durden's picture

RANsquawk 9th February Morning Briefing - Stocks, Bonds, FX etc.





RANsquawk 9th February Morning Briefing - Stocks, Bonds, FX etc.



Tyler Durden's picture

The Ever Increasing Parallels Between AIG And Greece... And The CDS Puppetmaster Behind It All





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.




Syndicate content