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Greek 2 Year Bond Yield Passes 20%

Tyler Durden's picture




 

Following the S&P news, oddly enough, one is not seeing a flight to safety away from US paper and into Greek. In fact, observing the absolutely record 20% yield print on the 2 Year Greek bond, one may be excused to speculate that the inverse is happening. Also, with the cash price of the 2 Year now at 20% and the prices of longer duration bonds in the 60s, there is now no reason to actually restructure the country: bonds have it pretty much fully priced in. After all, the Santorini liquidation value should be worth at least 20-30 cents on the bond dollar, er, euro.

 

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Mon, 04/18/2011 - 10:08 | 1180191 Theta_Burn
Theta_Burn's picture

LOL

Mon, 04/18/2011 - 11:08 | 1180474 IQ 145
IQ 145's picture

 Shocked! Shocked I say !

Mon, 04/18/2011 - 10:10 | 1180198 firstdivision
firstdivision's picture

"One day Alice, to the moon"!

Mon, 04/18/2011 - 10:11 | 1180201 tallen
tallen's picture

How long till it passes 100% Hahaha.

Mon, 04/18/2011 - 10:11 | 1180202 silvertrain
silvertrain's picture

Just wait a second and Moody's will make a statement that all is ok......

Mon, 04/18/2011 - 10:15 | 1180207 Drag Racer
Drag Racer's picture

I wonder what I could get if I issued bonds....doh

Mon, 04/18/2011 - 10:15 | 1180213 Dick Darlington
Dick Darlington's picture

Also, with the cash price of the 2 Year now at 20% and the prices of longer duration bonds in the 60s, there is now no reason to actually restructure the country: bonds have it pretty much fully priced in.

 

Yield on the 2yr is @ 20% but cash price is not.

Mon, 04/18/2011 - 10:13 | 1180214 Thomas
Thomas's picture

Just BTFDs. (On the other hand, it could be TEOTWAWKI)

Mon, 04/18/2011 - 11:08 | 1180466 CrashisOptimistic
CrashisOptimistic's picture

Rationale:

There is NO WAY IN HELL Germany would talk about haircuts or restructuring in Greece unless Merkel had FINALLY been successful in forcing her banks to divest themselves of Greek SWAP exposure.  If she has . . . if there are no Greek Swap holdings at German banks, then fuck the EU (she's losing elections, she has to maneuver) and let Greece default.

Oh wait, that means French banks that didn't swap divest get crushed?  Angela will just shrug and offer to help France, at 8% over prime.

Mon, 04/18/2011 - 12:07 | 1180712 Printfaster
Printfaster's picture

I wonder how the Parthenon would look displayed inside the Pergamon?

Mon, 04/18/2011 - 10:15 | 1180215 Josephine29
Josephine29's picture

I saw some of the maths explained earlier for the Greek government bond which expires in 3 years time.

Where real relief comes in the shorter term is if the same system is applied to bonds which are to be renewed sooner than 2020. If we look at one of these the 4.5% bond expiring in May 2014 then Greece’s financial position in 2014 would be improved by not repaying it until 2020 by some 8.5 billion Euros.

 

The catch is what would happen to investors in these bonds. The price of the bond expiring in 2014 closed at 68.15 on Friday. This is quite chilling when you consider that not only does Greece promise you 100 in May 2014 but she also has the EU/ECB/IMF backing her up. The markets are saying, we don’t believe you! An investors buying now would expect 100 in May 2014 as the capital component of the 19% redemption yield. Moving the return of the prinicipal to 2020 would accordingly be quite a punishment compared with getting it in 2014.

http://www.mindfulmoney.co.uk/wp/author/shaun-richards/

 

So a bond which pays you back 100 in 3 years has a price of 68 and falling...

Mon, 04/18/2011 - 10:16 | 1180218 RagnarDanneskjold
RagnarDanneskjold's picture

S&P just rang the bell. The dollar move is exhausted.

Mon, 04/18/2011 - 10:17 | 1180222 writingsonthewall
writingsonthewall's picture

Round and round the money goes...where it stops...nobody knows....

 

GOLD.

Mon, 04/18/2011 - 10:28 | 1180266 Hephasteus
Hephasteus's picture

The bond market.

Did you read about those icelanders not paying nothing back. Putting bankers in jail and kicking McDonald's in the nut sack.

http://www.youtube.com/watch?v=xME2TaiQX0g

Mon, 04/18/2011 - 10:33 | 1180307 High Plains Drifter
High Plains Drifter's picture

tell that the young men dressed in black.............

Mon, 04/18/2011 - 10:40 | 1180332 Sudden Debt
Sudden Debt's picture

2 million insurrance to lend 10 million!! HAHAHAHA

 

AT LEAST THERE ARE NO MORE RATS ON BOARD!!!

 

 

 

 

Mon, 04/18/2011 - 10:46 | 1180360 Herne the Hunter
Herne the Hunter's picture

Bow to Xerxes...

Mon, 04/18/2011 - 11:00 | 1180421 magpie
magpie's picture

It's been a while, but Celtic / Gaul barbarians looted Greece once before as well.

Mon, 04/18/2011 - 11:05 | 1180439 Bam_Man
Bam_Man's picture

The market has only administered "haircuts" to those not willing to hold to maturity.

The Greek govt. still needs to re-structure to lower their actual coupon payments.

Mon, 04/18/2011 - 13:22 | 1180984 topcallingtroll
topcallingtroll's picture

Good point.

Or maybe scare the bond market lower and buy back a few.

I think the greeks will hold out for a 50 percent coupon reduction and a maturity extension to...oh...let's say infinity.

Mon, 04/18/2011 - 11:04 | 1180448 CrashisOptimistic
CrashisOptimistic's picture

BTW Tyler, Santorini is the site of one of the largest volcano explosions in the history of mankind.  Selling it would be very good business for Greece, on the assumption that it's due.  

You could even generate more cash by selling the surrounding islands, which would be wiped out by the tsunami.

Mon, 04/18/2011 - 11:07 | 1180461 johngaltfla
johngaltfla's picture

So much for the PIIGS crisis being resolved. I could have sworn I heard 1000 analysts on the CNBC Informercial Network swearing it was no big deal.

Mon, 04/18/2011 - 11:36 | 1180578 slewie the pi-rat
slewie the pi-rat's picture

haircut almost over.  greek bondholders emerge from chair with telly savalas look. may get waxed during pedi.

Mon, 04/18/2011 - 11:49 | 1180651 huckman
huckman's picture

Its called a global time deposit.

Mon, 04/18/2011 - 12:23 | 1180765 disabledvet
disabledvet's picture

Flight to safety in....treasuries?...on downgrade of USA?  "At least gold is doing well."  As Irwin "Fletch" Fletcher said when confronted by the police chief pointing a gun at his head, "thank God, the police have arrived."

Mon, 04/18/2011 - 12:28 | 1180778 Rodent Freikorps
Rodent Freikorps's picture

What is amazing is just what amazing poofters Greeks have be that Going Greek does not mean defaulting on debt.

Mon, 04/18/2011 - 12:51 | 1180879 blunderdog
blunderdog's picture

20% on the 2 year?  That's a helluva yield.  I'm callin' my broker.

Mon, 04/18/2011 - 13:17 | 1180972 topcallingtroll
topcallingtroll's picture

Dude

Friends dont let friends buy greek bonds.

Mon, 04/18/2011 - 13:24 | 1181003 blunderdog
blunderdog's picture

Well, what else I'ma do after I sold all my silver at $31?

Mon, 04/18/2011 - 13:43 | 1181078 Rodent Freikorps
Rodent Freikorps's picture

.22 magnum rounds are underpriced.

Mon, 04/18/2011 - 14:07 | 1181169 blunderdog
blunderdog's picture

I live in the city.  Only rounds I could possibly be interested in would be high-caliber, low-velocity.

And I couldn't use many of them.

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