Freefall: Greek Bonds Tumble, 3 bps Away From Critical 450 bps Threshold, ASE Index Plunges 5%

Tyler Durden's picture

Panic in Greece as total freefall envelops both the bond and the stock market. The 10 Year is now at an absolute record 447 bps spread to bunds, or in the mid 7's in absolute terms. The stock market has tumbled by about 5% and Greek CDS have surged to a record.

From Bloomberg:

“There is now increasing uncertainty surrounding Greece’s
ability to raise the required amount of funding without recourse
to the emergency lending facility provided by euro member states
and the IMF,” Steven Mansell, a strategist at Citigroup Inc. in
London, wrote in a report. “This raises the question of whether
or not tensions will also rise in other peripheral markets. We
think that some form of contagion is inevitable.”

Finance Minister George Papaconstantinou said Greece
doesn’t need additional austerity measures, after the European
Union and the International Monetary Fund agreed terms for an
emergency support package last month. Europe’s economy
unexpectedly stagnated in the fourth quarter, and Japanese
machinery orders and U.S. consumer credit slumped, adding to
investor concern that the economic rebound may falter.

If Greek spreads move just a little wider by 3 bps, which we expected once Greece gave out the 450 bps bogey of total freefall, it is pretty much game over for Greece. Next up: PIIS

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orange juice's picture

Piis, ha thats about what the other bonds will be worth once Greece sneezes.

-1Delta's picture


you have to inlclude F, UK, US...

jbc77's picture

Yet the U.S futures has barely moved to the downside. What the hell is going on? How do they continue to levitate the markets like this?

Jason T's picture

God only .. I mean, GS only knows.  (massive sarcasm)

LA and Detriot are up on deck.  

Massive coverup in US with tremendous social benefits being spent.





crosey's picture

Just balanced on the head of a pin.  There are still some latecomers to the rally, and the pros are happy to take their money.

But when it goes south, it will be one hell of a ride down.  Will it be consecutive 10% drops?  I don't know because I have never seen a market at this level, with so little volume.

SofaPapa's picture

I agree.  Once upon a time, I used to believe in a "free market".  Same as the Easter Bunny, I guess.  Sigh.  What will they disabuse me of next?  When sites like ZH are shut down as "dangerous speech", it will be too late.

Tethys's picture

Sheesh - that would never happen.  I mean, what reason could they possibly use to justify controlling access to the internet and sites like this...


Gordon Freeman's picture

Seven percent--schmeven percent...

Pshaw!  The real question is why the hell the interest rate is not at infinity--as the bonds will be going to zero.

Greekness, bitches!

Cognitive Dissonance's picture

"Panic in Greece as total freefall envelops both the bond and the stock market."


This certainly was unexpected. A bolt out of the blue by Zeus. I thought they had things all settled in Greece? At least that's what my mainstream media repeatedly assured me was the case. Boy, it looks like the 1000 year flood hit Greece.............again.

Cursive's picture

This certainly was unexpected. A bolt out of the blue by Zeus. 

LOL.  I know.  Should have happened about 2 months ago, so it is almost unbelievable when the reality does come down.  IOW, can you imagine staying in an earthquake zone if God said, a full 2 months in advance of the event, "My people, there will be a cataclysmic earthquake." 

Cognitive Dissonance's picture

I love the comment but didn't we (as in the USA) get the same warning late in 2008? Only the time frame was uncertain and nonspecific. :>)

yabs's picture

yeah what a black swan
I gues when california goes belly up that will be a black swan
Like how could anyone see THAT coming
You just cannot control those random events

Miles Kendig's picture

A tail ensconced in a bight, pastel spandex.  Oh, wait, that's Florida.

ZackAttack's picture

WTF would accessing an 'emergency lending facility' accomplish except wasting others' capital before they default?

ZackAttack's picture

We're all watching Greece, though. By definition, the swan is being hatched somewhere else.

SofaPapa's picture

We were all watching Lehman, too, though.  Sometimes the biggest things are the most obvious, and people just refuse to accept the implications.

SofaPapa's picture

Greece has reached the point of catastrophic inertia.  Each move they make creates a negative feedback from the move before.  The acceleration has reached the point that I doubt that even a bailout is going to do much at this point.  The brakes would be too weak for the weight of this train.  FUBAR.

dickbar's picture

it never got to 447... been watching it all day... 443 is the high

lucky 81's picture

all this negativity. my oh my. where are those among you who see incredible opportunities in olive groves..... as soon as the shooting stops. 

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dickbar's picture

just got this froma  greek broker... Dear all,
Due to massive debit position in HDAT transactions, the Committee of Primary Dealers Supervision and Control decided as of today and until further notice to automatically proceed to repo auctions, at the end of HDAT trading day, in order to cover all transactions with such debit positions.
Best Regards
Greek (HDAT) decision about repo: every short position that is not covered will
be forced to be covered at whatever price (repo auction) at the end of the day.
This definitely means that it is going to be far more difficult to be short
Greek bonds. But this decision will affect more the market-making desks than
anyone else and could lead to a total stop of quotations of Greek bonds.
14:49:50  RICHARD JONES : 4:48:41  RICHARD JONES : what's HDAT??
answer....  Its the Greek bonds market ...electronic trading system

yabs's picture

I guess people are so busy looking at Pigs they miss the swans

poorold's picture

443 vs. 450...


that's beating expectations, isn't it?


buy, buy, buy...

sheeple's picture

Goldman's cooking up some souvlaki, what's next on the menu, Calamares a la romana?

Miles Kendig's picture

As sovereigns discover that whenever they draw a weapon during an economic crisis it will be used and transferring risk from the private to the public sectors only serves to unite target, weapon & firer. Dummies.  And these folks wonder why fires keep cropping up when all three elements to start a fire are consistently drawn together....