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Greece CDS Blows Out, Approaches Record Wides Again; Portugal Sells 5 Year Debt At Massive Spread
Markit reporting that Greek Bund Spreads have suddenly exploded by 65 bps to 776, the highest since May 7, and inches away from the all time record of 900 bps, even as CDS blows out to over 900 bps.The reason quoted is that traders have cited forced index selling and the absence of central bank buying: have banks finally left Greece to dry? Or is it just that Greece is once again caught lying, pardon, having to issue a public retraction: apparently German Handelsblatt ran an interview with Greek finance minister George Papaconstantinou, in which the Greek was "misquoted."According to Market News: "Some of the headlines issued earlier Wednesday on
the basis of an interview Greek Finance Minister Giorgos Papaconstantinou gave to German business daily Handelsblatt were based
on an erroneous version of the interview placed by the paper on its
website. Papaconstantinou did not say in the latest interview with
Handelsblatt that Greece would get its deficit-to-GDP ratio below 3% by
mid-2012; that and some other headlines were based on an older interview
the paper accidentally published. In the actual interview, according to the print version of the
newspaper, Papaconstantinou said, "Of course not," when asked if he
expects his fiscally troubled country to go bankrupt." The credibility-deficient minister also noted: "The country will “absolutely” endure the crisis without
restructuring its debt, he vowed, since such a step “would exclude Greece for a long time from the financial markets." The punchline was the conclusion that Spain and Portugal are “in a much better position” than Greece. Which bring us to our next point - Portugal's 5 year auction which came in at 4.657%, almost a full percentage point worse compared to the last auction on May 26, which closed at an average yield of 3.70%. Portugal may be better, but at this rate of collapse it means absolutely nothing.
More on the Portuguese auction from Market News:
Portugal's debt agency, or Instituto de Gestao de Credito Publico (IGCP), allotted E943 million of the 5-year benchmark 3.35% Oct 2015 OT Wednesday, at a bid-to-cover ratio of 1.8 times.
The size allotted came in above the indicative range of E300 million to E800 million and was sold at an average yield 4.657%.
The debt agency said it received total bids of E1.687 billion, with E943 million allotted, resulting in a bid-to-cover ratio of 1.789 times (unrounded).
This compares to the previous 5-year auction on May 26 for E1.0 billion, which was then sold at an average yield 3.70% and covered 1.83 times.
As Greece prepares for bailout #2, gold is once again merrily chugging along.
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Wow. Have to say, while I'm not suprised that Greek CDS is blowing out, the timing caught me a little off guard. It appeared as though the ECB had this under control, at least temporarily. Just when you thought Greece was off the map....BAM! They'rreeee BAAACCCKKKKK!!!!
CDS traders can do whatever they want. THis is just an effort to screw the greeks over a little more before the actual rape sets in. CDS are infinately leveraged OTC derivitive that now serve the purpose driving up bond yields. Yawn! wake me up when something meaningful happens.
You can lie to money losing investors so long. They want their piece of flesh. Greece the European 3rd World nation.
Man. Thanx Tyler for being first on the news - I was watching the EURUSD minute candles wondering WTF was up.
Definite attempt at a selloff got started AND foiled by a definite rescue. Nobody's bought enough to change the market to green (yet) but someone in banksterland is definitely on top of it.
Gonna be an interesting NY session. Soros was up to some mischief with that paper just published - he is evidently short EUR, and NOT happy with their refusal to join the stimulus train.
Got my tinfoil hat back, and on it goes. Hat says: some deep pockets in banksterland discussing political concessions with the administration as we speak - the bargain price for painting the tape green today.
Saw that as well. On the FX front though, seems the harder they try, the worse it gets, as it did for the Swiss balance sheet and for what? To stave off the fall for a few hours? I guess they can have at it, seeing how it worked so well for Swiss. Few FX losses here, few losses there....
Hey, works for short-termers like me. :-D Mice catching the crumbs falling from the Big Wheel table. They spend 10B euros, and I pick up a thousand bucks for our wee account. Awesome.
Although...big picture, I would think all these FX manipulations are going to send the fiats faster and faster down the ol' pike. Wonder how long it will take our various national populations to twig to what the wee banksters have been up to in the FX markets, and how VERY EXPENSIVE that gets, right quick.
SNB resolve has been thoroughly tested and they seem to have taken a leaf from the Asians - if you're gonna intervene, DON'T make it fuckin obvious and blow your whole wad in 2 months with some doomed Shock & Awe. This is the Forex, not freakin Iraq. And get some of your CB buddies to do a little buying too, spread it around some! I notice the selldown on EURCHF has dwindled to, like 20 pips an hour for the last few days, and is forming a bit of a bottom on 1.36.
THAT'S the way to do it....
Greek CDS trading 100bp better than BP debt? Guess it all depends on your definition of disaster....
Soros now saying Germany could cause Euro collapse
http://finance.yahoo.com/news/Soros-says-Germany-could-rb-896390694.html...
So Portuguese govie bond yields up from 3.7% to 4.7% from May26th to now.
Portugueuse index PSI20 is up from roughly 6700 to 7500, same timescale. Over 10% rally.
Weird. Evidently equities are a safe haven in our fucked up world.
Greek shoots!
portugreek shoots!
How much debt can a debtchuck chuck, if a CDSchuck upchucks debt.
Debtwars. Coming soon to a theatre near you...
jkruffin, can you blame Germany for wanting to dump the EU when their so called partner the Frenchies dumped Greek bonds after the supposed rescue? It is like having a coward, back stabbing coworker undermine everything you do.
All part of the plan to move Europe to an international currency accepted by China and Russia and eventually- The US. This dance is in full swing. Run it all through the BIS.
Say goodbye to currency and hello to electronic credits.
In this regard their performance in Cape Town bears some relevance.
Does anyone know who is buying the majority of this debt?
ECB
Unrelated question.
Have any of you ever read that dirty rag: the new york observer? Craptastic publication don't you think...
Unrelated country news...but BI is reporting via Sydney Morning Herald that Sonray Capital collapsed over night.
"
One of the country's biggest intermediary brokers, Melbourne-based Sonray Capital, collapsed at 11pm yesterday, freezing 3000 client accounts.
Ferrier Hodgson has been appointed as the administrators and will meet the corporate watchdog Australian Securities & Investments Commission to investigate the reason for the collapse.
Sonray is a so-called introduction brokerage, specialising in online and advisory services in global equities, futures, foreign exchange and other investments, according to a statement from Ferrier Hodgson."
http://www.businessinsider.com/major-australian-broker-sonray-collapses-thousands-of-client-accounts-frozen-2010-6#ixzz0rg97FasHAwesome. Fund collapse and now considering that our Prime Minister is about to be deposed tonight, AUD should be tanking right?
HA. Rescue in full force on the AUSUSD, nearly as bad as the battle royal going on over EURUSD. Hoses well & truly employed on every red candle and the pair has barely budged.
Yup. Definitely gonna be interesting times in the NY session.
(I wonder who our new dear leader is going to be come tomorrow morning.)
"I wonder who our new dear leader is going to be come tomorrow morning" - Julia Gillard
http://www.aph.gov.au/house/members/member.asp?id=83L
Yeah, looks like it...could be worse! I have a lot of time for her; doesn't seem to me like your typical playah, seems to have some loyalty. But what do I know.
Here's my question: Why the hell can't Aus and Canada figure it out re: pollies? The US, the UK, no matter how BAD their leader might be, is still their damn leader. They'd practically have to poison someone to be impeached...meanwhile, here and in Canada (where I have family), it's like the seat of leadership has a built-in ejector seat and every PM is surrounded by sharks who can't wait to have a go at their position...alas, I rant. :-)
Anyway. Julia. If she gets the spot I guess I won't be packing up and leaving the country....
Is this for real or just speculation?
I forgot to vote so don't care but interesting anyhow.
No doubt they were following the bearish trading tips bandied about on ZH. Wasn't Team Tyler short the index from about 666 - 1100?
PORTUGUESE BONDS
The market has demanded an interest rate of 4.657% to absorb 943 million euros in Portuguese government bonds to five years.
The value placed surpassed the intended issuance, which ranged between 300 and 800 million euros.
Still, jitters in the debt markets is still visible in the premium demanded by investors. The interest of treasury bonds issued today stood at 4.657%, nearly one percentage point above the equivalent auction held on May 26.
Demand exceeded supply by 1.8 times, the same ratio found in the May issue.
Anybody ever notice that Portugal and Greece have the highest percentages of gold as a share of forex reserves? http://en.wikipedia.org/wiki/Official_gold_reserves Granted, those forex reserves are small compared to most but if gold jumps and fiats sink, it would go a long way to making the first last and the last first. Right now the game is still rigged for USD but all things must pass. Also, it's funny that gold is even a part of forex reserves. I mean, it's not a currency, right?
It is strange, that.
Funny thing - I've read before this gold reserves argument as one of the reasons that EUR is not as doomed as some say.
I think it is, but only b/c I have no doubt that banksters, who dread gold, will push the unpayable debt plan right to the bitter end.
But, should China/Russia/Middle East/Germany put forward some sort of alternative currency plan, EUR may be resurrected although including a much smaller group.
Greece or Portugal could then adapt their own currencies to take advantage of their wealth in gold. Lots of possibilities, but we have to topple the current demented child-kings first...
What really amazes me is the lack of discussion on the likely imminent failure of Greek banks. With the EU-IMF fighting just to keep the Greek government afloat who is going to bail out the Greek banks!? There is no way they are not suffering heavily because of this and these are not petty institutions but banks with combined assets of hundreds of billions of euros.