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Forint Slide Accelerates As Hungarian Default Risk Now 14 Wider To 277bps

Tyler Durden's picture




 

Poor, poor Europe. Every room one shines a light in, the cockroaches don't even bother to scurry to safety any more. Yet what is glaringly obvious takes a media-reported soundbite to awake people. So is the case with Hungary today. After opening 7 tighter, Hungarian CDS are now 14 bps wider to 277bps. As the attached chart shows, the Hungarian Forint is now in freefall. Yet if investors are concerned about Hungary, they should take a look at some of its less lucky Eastern European neighbors which, just like Hungary, have been considered to be strong for so long.

 

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Thu, 06/03/2010 - 11:42 | 391913 Crab Cake
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EUR-USD 1.2199

Awaiting the third ramp job of the day..... Wait for it...

Thu, 06/03/2010 - 11:54 | 391948 ZeroPower
ZeroPower's picture

1.2188 looking like s-t low for now

Thu, 06/03/2010 - 12:23 | 392013 jeb3
jeb3's picture

Here comes the 1.2150 retest.  I really think they'll support this level at ANY cost currently.  Only time will tell tho...

Thu, 06/03/2010 - 12:39 | 392039 Rusty_Shackleford
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Come one Gentle Ben.  1.2153!!!!!    Are you sure your keyboard is even plugged in?

Jiggle the cord!!!

Thu, 06/03/2010 - 12:48 | 392083 doolittlegeorge
doolittlegeorge's picture

this really is funny.  What did "Big Helmet" say in the movie Space Balls?  "Did you see me playing with my toys?"  And the response?  "No, sir, I did not see you playing with your toys."  And evil Big Helmet responded, "Goooooooddddddd." 

Thu, 06/03/2010 - 13:30 | 392204 MrTrader
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Hum...I am long EUR/HUF, no idea why ANYONE is playing EUR/USD...????

Thu, 06/03/2010 - 11:43 | 391916 steve from virginia
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Watching this and reading between the lines it seems the IMF- bailout/deflation medicine is backfiring in Hungary, the poster child for austerity in Eastern Europe:

 

http://www.businessweek.com/news/2010-05-29/hungary-s-orban-assumes-powe...

 

So- called 'Growth' in Hungary is hoped to be .5% this year, far insufficient to outpace debt service costs. Rather, IMF enforced austerity pulls debt service farther out of reach.

Thu, 06/03/2010 - 13:21 | 392169 trav7777
trav7777's picture

Ironically, the rate regimes in various nations were intended to INVITE a carry trade to bring credit into their economies.

They welcomed being the new South Seas.

This will be their undoing now as the fictitious capital all sloshes back out.

Thu, 06/03/2010 - 11:57 | 391952 carbonmutant
carbonmutant's picture

Looks like Hungary’s Government Debt Management Agency had to cut their bond auction.

http://www.portfolio.hu/img/upload/2010/06/100603Auction01.jpg

 

Thu, 06/03/2010 - 11:58 | 391955 SDRII
SDRII's picture

Cant be good for Unicredit and or Austria

Thu, 06/03/2010 - 12:04 | 391968 Cyan Lite
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Is 14bps really that much of a difference? 

Thu, 06/03/2010 - 12:25 | 392018 LeBalance
LeBalance's picture

as Dburger says below Yes. lol, just try making a budget or being rational about debt service, or for that matter attracting buyers to your debt service with that level of increased cost, volatility, and therefore uncertainty and lack of ...wait for it... Confidence.

Aka Ka-BOOM!

Thu, 06/03/2010 - 12:05 | 391972 Deflationburger...
Deflationburger with Fleas's picture

Its a 5% move in one day.  Yes it is.

Thu, 06/03/2010 - 12:09 | 391979 Zodiac
Zodiac's picture

Let's all welcome the new grouping of similarly positioned countries -- the PHIIGS.

Eat your heart out Jim O'Neill.

Thu, 06/03/2010 - 12:15 | 391990 firstdivision
firstdivision's picture

You forgot Austria.

 

In other news CNBC says to "buy eastern euro debt".

Thu, 06/03/2010 - 12:34 | 392045 Rusty_Shackleford
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...and private mortgage backed securities.

They've got fantastic cash flow.......

 

I swear to God some guy just said that as I was walking past the TV.

Thu, 06/03/2010 - 12:15 | 391989 PhD
PhD's picture

UP UP AND AWAY!!!

 

TO INFINITY AND BEYOND!

Thu, 06/03/2010 - 12:30 | 392026 bugs_
bugs_'s picture

Soros home plate.

Thu, 06/03/2010 - 12:54 | 392098 doolittlegeorge
doolittlegeorge's picture

It's actually pretty funny.   It was the S Koreans who coined the phrase "I Am Phucked" as the real acronym for IMF.  Needless to say the Euro-phags were pounding the table back in 98 to "throw Asia under the bus" and they used "their" IMF to do it.  Weeellllll isn't turnabout a real phukin' good time!  I know--maybe the world could ask of all those Nancy's over there for some real population growth!  Never have a people been so afraid of the word "family" since probably Ghengis Khan.

Thu, 06/03/2010 - 13:08 | 392125 AnAnonymous
AnAnonymous's picture

Is the IMF the US or Europe? because when the IMF is bailing out the world, that is the US. When the US screws the world, that is Europe.

Thu, 06/03/2010 - 12:58 | 392110 Truth
Truth's picture

Gold $1300 here we come....

Thu, 06/03/2010 - 13:16 | 392159 trav7777
trav7777's picture

yeah, um...gold just fell off a $20 cliff.

 

Thu, 06/03/2010 - 14:24 | 392365 Truth
Truth's picture

if you're day trading, bummer.  longer term however, dollar likely to peak soon and then attention to turn to U.S. and watch the dollar begin/continue it's death walk.  i'll take the two steps forward, one step back price action. 

Thu, 06/03/2010 - 13:19 | 392165 trav7777
trav7777's picture

Debt, as we know it, or "money," take your pick, is retreating from the reaches of the earth to its source.

It's flooding out of developing economies and repatriating to the carry sources, Japan and the US.

Oil at these price levels (reflecting decline in supply) is slowly strangling the last vestiges of marginally economical activity in the BFE countries of the world.

The low-hanging fruit is all gone.

Thu, 06/03/2010 - 13:46 | 392255 carbonmutant
carbonmutant's picture

Squeeze the turnip is next...

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