Archive - Feb 2010

This latest on Greece, this time from Dow Jones. Why is Obama speaking about windmills as the future of global moral hazard, Larry Summers edition, is being decided in Berlin? From DJ: "Finance Ministry spokesman Michael Offer said EU members wanted to develop further recapitalization measures that calm the markets."

Crazy pill time. More disinformation as we get it. Is Germany merely probing to see the market reaction to leaks? If the Bund collapses can they just call the whole thing off?

• Yields 1.377% vs. Exp. 1.36%
• Bid To Cover 2.83 vs. Avg. 3.01 (Prev. 2.98)
• Indirects 51.2% vs. Avg. 54.12% (Prev. 38.09%)
• Indirect Bid To Cover lower at 1.16
• Allotted at high 26.75%
• Direct take down 10.07%
• Indirect take down 51.18%

Total, utter, complete confusion. The latest from Reuters, quoting a German Government official, is that the Greece bailout rumors are UNFOUNDED.

Now that there is no more risk, anywhere, here are the preliminary thoughts on how kicking the can down the road has just taken on a whole new meaning, courtesy of the FT Deutschland. We are certain that citizens of Germany and France will be ecstatic to see their tax money used to first save Greece, then Spain, the Portugal, then Italy, then Lithuania, then Bulgaria, etc.

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

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

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

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

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.

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."

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.

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

"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