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The CDS Traders' Verdict Is In - UK In Deep Shit... As Are France And Deutschland
Portugal... Spain...Greece...these are all last week's news based on CDS trading patterns. Indeed, this week saw the biggest trade unwinds of all top 1000 CDS entities (including all corporates) precisely in these three names. As the PIIGS implosion is finally being appreciated by everyone and their grandmother, the "speculators" are booking massive profits: the net cover/rerisking in Portugal and Spain was a massive $500 million net notional unwinds in each in the week ended April 30. Also known as taking profits. Greece and Ireland were also in the top 5, so as we have repeatedly claimed, the market will no longer make the news in Club Med. So where will it? No surprise there - the UK, France and Germany. The smartest money in the world is now actively betting the core of the eurozone is where the next CDS blow up will take place. With a stunning $630 million, $558 million and $370 million in net notional derisking, France, UK and Germany are the top three most active recipients in negative bets in the prior week, not just in sovereigns but in all names. The greatest non-sovereign derisker in the last week? Goldman Sachs, with $175 million. Nuff said. Yet a tangent on the UK: last week the UK saw $443 million in net notional derisking. This week the number is even higher: $558 million. There is now over $1 billion in net risky bets made that the UK may not last. And Zero Hedge's outside bet to be the first core country to blow up, thanks to its massive PIIGS exposure, France, finally made the top spot in net derisking, with $629 million in net notional, or 189 contracts. The smart money is now massively betting that Europe's core is done for; as the PIIGS have demonstrated, the blow out in spreads for the core trifecta can not be far behind.
Top 10 deriskers:
Top 10 reriskers:
All sovereign names:
Source: DTCC
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conservatives will get in i'm sure. the brits view the conservatives like the world views the dollar.
ie; the least smelling pile of shit currently available.
Im trying to work out the de-risking re-risking too. it'd be good to see the price effect on bonds and CDS as this is occuring.
Is it simply a case that the PIIGS have collapsed and the bond prices wont blow out much more from here compared to the "fresh meat" in the UK, France and Germany? Or as John Connor suggested they believe a big bailout is about to be rolled out for the PIIGys? Or maybe they're trying to cause a wave of rolling sell-offs that bring each euro member down further and harder?
They shortchanged Greece with their bailout, I don't think there are any big enough bailouts left. If i recall the IMF has $250bn currently available and eventually $500bn (but the full 500 is not yet operational), with $2T of potential PIIGS liabilities (=debt maturities and budget deficits) out there the IMF isn't in much of a position to do anything.
Once they dole out a bit to Portugal and Spain they're gonna be all tapped out.
http://www.zerohedge.com/article/2-trillion-3-year-funding-needs-piigs-imf-helpless-do-anything-sit-back-and-watch
Thanks, good point. They wont be able to fully bail out Greece even if they wanted too as now Spain & Portugal are going to be in imment need of a little boost themselves. Wasnt Spain and Portugal commited to contributing to the Greek bailout? Guess thats over now too.
So from my options that leaves better pickings in the UK, France and Germany or attempting to kickstart a rolling crisis. Maybe they just need to get a bit of cash out of the PIIGS to enter the fresh positions elsewhere.
If you haven't bought gold. You'l have to outbid french people.
ooooohhhhh noooooo:
http://www.youtube.com/watch?v=9V7zbWNznbs
LMAO!
;)
LOL. I was just thinking the french may be afraid to buy gold. After they broke the gentlemen's aggreement to not deliver shortly before world war II they were first on Hitlers stomp list. Or maybe they saved the one they paid so dearly for.
Would you like to buy a golden economic healing chalice?
We've already got one. LOL
Were they not part of a gold based communauty, hinged about the idea that gold retains value, with the consequence of slowing down their armament increase efforts?
Actually, all the countries in this communauty failed to expand their military compared to countries relying on paper money. Was shown later by practical experiment.
I just want to ask this one more time
Who is going to buy the net new US treasury debt issued of $1,000,000,000,000 (1 trillion) per year? This is the debt needed to be issued just for the deficit spending according to Obama himself!!!! And this is most likely a low number because it assumes around 4% GDP growth.
Well Wily, the situation right now is that folks who have a nod and a wink relationship with the FED are buying it and then the FED buys it from them two weeks later and "just no one" notices. C'mon you gonna tell everyone that the Emperor is walked around naked as a jay bird? We are all much too refined and polite to say anything. Golly yes we are. Its much more important to be polite and suffer for hundreds of years than it is to stand up and say, "Please sir, Cover yourself. I can see the Metallica Tattoo on your thigh!"
If Dimon Blankface Rothschild etc are naked Emperors, I'd stand up to point and laugh.
Was it Buffett who said when the tide goes out, you can see who's hung like a gerbil?
You are being quite stubborn. How much closer to the edge do TBTB have to take this to distract you from that question?
we are! We will continue to do so, so long as we're winning the currency war...and we're still winning it so long as no one gets any ideas over oil
Although it would seem logical that US would be net beneficiary of Greek default and Euro pounding, the reality is that you they do not want it.
What they do want is enough panic to warrant interest in treasuries, but not a complete blow out.
Dont be surprised if we get CB intervention here at some point to put the hurt on the spec positions. This EUR/USD has been a no brainer since last year, its just taken this long for it to come to fruition.
CB intervention will be simply a delay of the eventual devaluation of EUR.
And dont forget, all this talk about pension funds being hosed if equity market blows up is a bunch of crap. If need be, they will sacrafice equities to keep financing of treasuries going and who's going to buy them? US citizens as they continue to feel the pain of a BS equity market.
We are in a deflationary death spiral. Dont kid youself. Why else are they considering issuing more TIPS - these guys arent stupid.
The Nikkei has opened down more than 3%. I bet there is no senior officer of a CB that is sleeping right about now. I would love to know what the money markets and the CDS markets in Asia are doing right now.
But it doesn't matter. The CBs can put a band aid on this one again. But this is the beginning of the end. They have run out of string.
Asian markets are sending up the 'risk currencies' right now.
But not very far, very fast, or very convincingly. Just taking a bit of the edge off.
EUR's been green for three hours but moved maybe 30, 40 pips, and that was during the 'hot' trading part of the day. And the AUD just took a swan dive back to square one with the retailers report.
'Fraid it'll have to be Frankfurt (next up) to turn this train around...Tokyo and Sydney aren't really volunteering.
What do you make of it? Double post. Sorry.
What do you make of it?
I'm prolly not the best to ask - I'm just a small-timer, following the lead of the big wheels and not asking Why, just How High if you know what I mean. I just watch the candles and grab a few pips here and few pips there; if I try to predict or analyse I am almost always wrong so I don't do it much.
But, FWIW, here's my best guess:
Tokyo (Sydney) are in dismay but can't change this. We're trying to mitigate the effect a bit but we aren't coming to the rescue. We are steering as clear of the euro as we can without further damaging our markets, able only to interrupt its fall. If pattern holds the 'risk currencies' will continue drifting upward for the next couple of hours, then fall back prior to Frankfurt opening.
Unless a change of direction comes when London opens, or New York, the EUR (and 'risk' or 'resource' currencies) are still toast today. We've halted the fall of the EURUSD and USDJPY (and the rise of the USDCHF), got them into a consolidation area and now its up to the big northern markets to provide a change in direction (a real rise). The MSM will no doubt report this at close as a rise or paring losses or some such, but to me it looks like just a trading consolidation while waiting to see what the Powerz come up with for their next rescue idea. (And Tokyo *can* do a convincing rescue rise, has in the past - believe me, this ain't it.)
I don't know if this is what you meant, but FWIW, my $0.02. From where I sit, absent a cunning plan from the Powerz, the EUR is going to continue its trip down and so will the equity markets...tomorrow, we'll go from whatever direction the northern markets set when they open. But we're not setting any new directions here today.
Thank you very much. I genuinely appreciate your insights. I will be sure to not pay attention to the MSM. Thank you agian.
Thank you very much. I genuinely appreciate your insights. I thought that the Nikki would be the next leg in the meltdown and my surmise was that if Tokyo opened way down and stayed there, it would put tremendous pressure on Europe at its opening. The CBs can only do so much. I noted that Mitsui was down 8% when I last looked- a huge amount for a company that large. I took the opening in Tokyo as a sign that the whole shebang was starting to spin out of the control of TPTB, especially in light of the article above.
I will be sure to not pay attention to the MSM. Thank you again.
Well yes, it is a free site. But ya see that little innocuous post on the left side of the screen. We need to support Tyler and the rest of the gang and site as much as we can. $1.00, $5.00, $100.00 or whatever. By donating what we can we can help maintain the quality and quanity of what is posted.
Free, yes, but to keep our freedom, we need to help. I give what I can, when I can. Zero Hedge is that important to me.
Thank you Zero Hedge!
+1
If England needs mo - money .. simple..
arrest The whole Rothchild family ..confiscate all their money ,
their tax forms are full of fraud .... they are Financial Terrorists .
jimbo you take the lead with a citizens arrest .
confiscate the money.. lol
hard day in la la land when that happens .
I don't know why, but dumpster is one of my favorite posters here at the truly marvelous ZH.
I'm there in the trench with you buddy re gold and ammo. But, a guy living in a condo cannot do much. I will do what I can.
Maybe we should have chosen the "Don't Tread On Me" rattlesnake as our national flag back in those days...
Freddie said it lost $8 billion in the first quarter, requested another $10.6 billion from Uncle Sam, and warned that it would need more in the future.
http://online.wsj.com/article/SB1000142405274870396110457522619238679795...
Things are moving faster now. The lies and fraud are becoming less and less effectual. They are failing to dam the surging river of reality.
The whole thing is not gonna end well.
No matter who you are, rich or poor, there will be a lot of pain.
The super rich will have a much better time, but they will be the most hated people om earth and they will feel the wrath either emotionally or physically.
Banksters will worry about their safety so much that they will not be able to enjoy any of the loot.
S. America anyone?
Buenos Aires will be again the place to be for the super rich and the partiers.
Cuzco will be the place to be for the academics.
Santiago will be the place for the rich and upper middle class
Ascuncion and Montevideo will still be the place for the "wanted" for their ill gains
Twin cities Bogota & Miami will still be the place for the drug lords and their entourage.
Place your bets
+1 The meltdown has started for real this time. The system is falling apart.
Fuck it, its only money. let it burn.
<double post>
Or perhaps Paraguay
http://www.trufax.org/general/bush_family_paraguay_hideaway_up.html
I dont really see why the US is not the selected place.
N.America anyone?
It will never happen,as much as it should--the powers at be will make sure it doesnt---print money,lie,phony stats,whatever it takes--but for the common folk life will never be the same--America included
Rome didn't crash and burn in a day. It took 2 centuries of palladian debauchery and depraved indifference. The currency was debased over and over. The barbarians smashed down the gates but became more Roman than the Romans once they were inside. The rich partied with orgiastic ferocity. Doomsday cults proliferated.
Is this the future of the former globalist union? Very possibly. A quick and decisive decline and fall isn't likely. Too many powerful stakeholders. Too many minnows motivated by greed and fear.
glad they didn't have nuclear weapons..
CE, you sound like you have read Martin Armstrong.
I guess I agree that it will be a slow burn for the USA rather than quick smackdown. That is kind of what Bill Bonner has been saying, he'll just watch with detachment and amusement as the world disintegrates, all the while sipping good wine, etc. because he saved his money in gold and not in stocks (etc.).
But, Rome did not have CDSs and computers to speed things up...
Be nimble!
How long do you need? Currency debasement took place in 1965 when the silver was taken out of the coinage. It has been long enough!
Tricky Dick took us off the gold standard about 40 years ago. I will use that time frame.
Constantine's first move as for the takeover was to have the support of Rome's Treasurers. This before he seiged. So the battle was over before it had started, as "he who controls the money supply..." (I apologize for quoting banksters, it is fitting). Smart man. Evil, but smart man.
Nice propaganda.
The solidus was introduced around 300. Was not debased one time. Solidus was kept the same up to 500 or more (doesnt matter as the Roman empire was down before that date)
The Roman empire expansion scheme was based on injection of new lands. When the rate of injection started to near zero or went negative, a normal consequence was that people saw less interest in joining a legio.
Not really depravation.
Derivatives caused the financial collapse to start with. Then the idiots in national govs bent over backwards to save the derivatives bubble. Now derivatives are being used to destroy the national govs. Of course those that saved the derivatives bubble will get their reward. A few million now, and eternity in hell.
Gold-Silver.us/forum
"United Mexican States" - Perfect, somebody gets it! But we already know this here on the border.
+10^99
Wrote columnist Carlos Loret de Mola for Mexico City’s Excelsior newspaper in 1982.
You cannot give me a similar example of such a large migratory wave by an ant-like multitude, stubborn, unarmed, and carried on in the face of the most powerful and best-armed nation on earth.... [The migrant invasion] seems to be slowly returning [the southwestern United States] to the jurisdiction of Mexico without the firing of a single shot, nor requiring the least diplomatic action, by means of a steady, spontaneous, and uninterrupted occupation.
Similarly, the Mexican writer Elena Poniatowska told the Venezuelan journal El Imparcial on July 3rd, 2001:
The people of the poor, the lice-ridden and the cucarachas are advancing in the United States, a country that wants to speak Spanish because 33.4 million Hispanics impose their culture...Mexico is recovering the territories ceded to the United States with migratory tactics...[This phenomenon] fills me with jubilation, because the Hispanics can have a growing force between Patagonia and Alaska.
The Mexicans, as Poniatowska sees it, have changed from resentful losers—which was the way Octavio Paz saw them in his famous 1960 study, The Labyrinth of Solitude—into winners. What accounts for this change? Their expansion northward into the U.S., as the vanguard of a Hispanic conquest of all of North America—cultural imperialism and national vengeance combined in one great volkish movement.
Politicians echo the same aggressive sentiments. At an International Congress of the Spanish Language in Spain in October 2000, Vicente Fox, soon to become president of Mexico with the support of U.S. conservatives, spoke of the “millions of Mexicans in the United States, who in cities such as Chicago, New York, Los Angeles, Miami or San Francisco, inject the vitality of the Spanish language and of their cultural expression.... To continue speaking Spanish in the United States is to hacer patria”—to do one’s patriotic duty. Fox was thus describing Mexican immigrants in the U.S., not as people who had left Mexico and still had some sentimental connections there, as all immigrants do, but as carriers of the national mission of the Mexican nation into and inside the United States.
At the same conference, the Mexican novelist Carlos Fuentes said: “In the face of the silent reconquista of the United States [emphasis added], we confront a new linguistic phenomenon,” by which he meant that Spanish was conquering English just as it conquered the Aztec language centuries ago. According to El Siglo, Fuentes received “an intense ovation.”
What is the use of this text? Did you write it? If not, you should provide your opinion on it...
I wish Zerohedge would become a ratings agency.
Could you use "deep shit" in a formal downgrade?
How low do you guys think the Euro will go over the next few weeks?
What if The Germans and French just opted to directly prop up their banks, who would take a hit on a Greek default, rather than doing so indirectly by pumping even more money into Greece?
If Greece were to default what would be the direct effect on the Euro?
Don't be silly, Greece isn't going to default, they're going to help bail themselves out with the magic of funny money.
http://www.youtube.com/watch?v=CtvHAqK8P14
Farming the poor, extorting the weak work.
The profitable situation falls in the first category.
France and Germany still top the relative safety level in lending. Greece has gone down.
Meaning France, Germany borrow at 3pc to lend to 5pc.
Getting paid to support your banks is not that a bad deal.
I have been reflective tonight.
Aren't there just two end-game outcomes for the world?
1) The world ends up with one world-wide income level in the next decade or two? And that is not going to be anything near the U.S. standard over the last 50-odd post-WWII level, right? And won't that be right between our monopoly, you-all-stay-poor level and the we-should-have-listened-to-Ross-Perot, but the whole world is equal now level?
OR,
2) We end up in the U.S.-China splits the world and maintains the have's-have not's system?
Reese Booby:
"Hell, did I say that? I was drunk, son. That's the dumbest-ass shit I ever heard."
Backgrounder; Janet Tavakoli's chapter 10 of her book "DEAR MR. BUFFET..."
http://g-ecx.images-amazon.com/images/G/01/wiley-ems/DearMrBuffet_Chap10...
just finished it. Janet is the shit.
Sadly she can't write for shit, I always find her difficult to read. But yes, she knows what she is talking about.
Only 1 thing to add to her account - Buffet's derivatives trades are often uncollateralised - no margin calls, ever. He's Buffet, he makes the rules. He wants to buy railroads, not tie up his cash in bank vaults.
Any Berkshire stock holders should be aware of this - the company could vanish if they have to pay out, as unrealised losses realise.
What were these trades? A typical trade is Berkshire sells at the money puts on major global indices. Trade date was 2006,2007,2008 i believe.... so if the market is much lower in 2019 than in 2007, the great Berkshire Hathaway is toast unless they can find billions in hard cash.
It must be harder for the European central bank to cheat huh?
not deep shit but eat shit is where they are.
Anybody know where I can get the information provided in those charts? Thank you in advance.
Last time France was top of the pops GS was thrown under the bus. What will it be this time Sarkozy? Quick call your brother, find out what The Carlyle Group thinks now!
Yes, we must be careful what we wish for. Fascist governments on their way down...good so far...but who inherits the world? Tell Paul Kkkrugman you do not want a corperate takeover. He will be shocked. Let him.
SYMPATHY FOR THE SHORTS:
http://williambanzai7.blogspot.com/2010/05/sympathy-for-short-revised.html
Remember when idiots like Peter Schiff were screaming "EUROPE IS MUCH BETTER OFF THAN WE ARE". Well the market disagrees. The EUR is toast. Schiff is hiding.
Tyler can you tell me were I can obtain this info, is it from a bloomberg feed ?????
Thanks
Question .. ? Is the Canadian Dollar better / safer to hold
than the US Dollar... ?
The proprietary indicators I use can identify trend changes before they occur and they have been warning of a USD rally since last year.
Just posted a new EURUSD chart: showing long term trendline with important support around 1.2770
http://www.zerohedge.com/forum/latest-market-outlook-0
I anyone need more proof that money is per definition smart and the very smartest of it is in the insurance business, look at these figures. No matter how you study it, flashes of enlightenment and cleverness everywhere.
Anybody look into shorting the euro? There is an ETF, DRR, but it has just made a parabolic move up and now does not seem to be a particularly good moment to buy in. DRR is a double short on the euro.
Perhaps there are also options that can accomplish the same thing with greater leverage and less expense?