This page has been archived and commenting is disabled.

Greek 30 Year Bond Cash Price: 50 Cents

Tyler Durden's picture




 

For a stunning reminder of just how much of a haircut the market is expecting on Greek debt in actual cash terms, look no further than the country's 30 Year bonds. These are now trading just above 50 cents on the euro. That's a "50% off" blue light special and roughly comparable to the recovery the market is expecting on the paper. Alternatively any "liability management exercise" price on these notably above 50 will result in a Greek revolution.

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 04/21/2011 - 11:57 | 1192597 the mad hatter
the mad hatter's picture

coming soon to a Treasury near you.

Thu, 04/21/2011 - 11:59 | 1192618 Josephine29
Josephine29's picture

In case people are wondering what things were like before the "rescue" of Greece here is an explanation.

As we approach Easter 2011 I thought it was time to look for some perspective and so I looked at the situation on Easter 2010. The Greek two-year goverment bond yield was 5.79% and the ten-year was 6.53% in what was already something of a crisis. Last night they closed at 22.07% and 14.87% respectively and the changes are rather eloquent about what has happened over the past year. When you consider the capital employed by the Euro zone then the inversion of short yield which now way exceed longer ones is analagous to a football goalkeeper catching a shot but then in an attempt to start his own teams attack somehow throwing the ball into his own net.

http://t.co/YiY05AU

 

Perhaps we should call it an anti-rescue....

Thu, 04/21/2011 - 12:03 | 1192624 Doc
Doc's picture

But Leo Kolivakis told me to buy!

Thu, 04/21/2011 - 12:03 | 1192633 hedgeless_horseman
hedgeless_horseman's picture

True, he did.  But you didn't, right? 

Right?

Thu, 04/21/2011 - 12:17 | 1192671 Stormdancer
Stormdancer's picture

I did buy a chinese solar cell phone charger....

Thu, 04/21/2011 - 12:25 | 1192697 Doc
Doc's picture

Hell yeah.

It was between that and gold and well... you know... gold doesn't like yield... and you can't like eat it or anything...

 

Thu, 04/21/2011 - 12:58 | 1192844 EvlTheCat
EvlTheCat's picture

Now you know why he bitches incessantly about pensions.  His financial advice sucks and he needs an end of life bail out when he runs out of his own money.

Thu, 04/21/2011 - 12:25 | 1192706 Doc
Doc's picture

Hell yeah.

It was between that and gold and well... you know... gold doesn't like yield... and you can't like eat it or anything...

 

Thu, 04/21/2011 - 13:34 | 1192998 High Plains Drifter
High Plains Drifter's picture

Leo doesn't believe the hype......

Thu, 04/21/2011 - 15:33 | 1193593 Otherspeoplesmoney
Otherspeoplesmoney's picture

Ah yes the old "i was talking to my family back in Greece and they are still going out for dinner......" investment strategy.  So glad Zero Hedge stopped posting him given the lack of interest in his shallow end commentary..........what he's still posting.......you have a good heart T.D most would have kicked him to the curb.

Thu, 04/21/2011 - 12:01 | 1192628 DoChenRollingBearing
DoChenRollingBearing's picture

Well, if Greece is leading California (Illinois, etc.) by a couple of years, then things could get real ugly here too.  I saw the Keratea video, what, yesterday.

...

NONE of our financial problems have been solved.

NO ONE of significance of those who caused our crisis are in jail.

...

Preparation.  Diversification.  Agility.  <--- Three good words to know.

Mon, 04/25/2011 - 20:13 | 1205969 thames222
thames222's picture

Liking those three words.  Is that a slogan for your company?  You're right, though, virtually none of our problems have been solved, not even since 2008.  there never was any recovery, this just feels like a very long recession. 

 

www.forecastfortomorrow.com

Thu, 04/21/2011 - 12:04 | 1192631 hugovanderbubble
hugovanderbubble's picture

Appreciate Post Tyler.

 

 

Thu, 04/21/2011 - 12:05 | 1192637 Catullus
Catullus's picture

You said so yourself, she kidnapped herself.

Thu, 04/21/2011 - 12:14 | 1192669 redpill
redpill's picture

Nothing is fucked here, dude!

Thu, 04/21/2011 - 12:12 | 1192649 Cleanclog
Cleanclog's picture

When will PIMCO open a yield inversion fund?  

Thu, 04/21/2011 - 12:11 | 1192655 franzpick
franzpick's picture

I traded 30 yr. US bond futures in 1980 when they were below 57.

It's happened here before and someday those prices will return.

Thu, 04/21/2011 - 12:40 | 1192779 Cleanclog
Cleanclog's picture

Same - remember when Money Market instruments hit the usury ceiling and we couldn't trade things yielding more than 22%?  At the time I could never imagine an 8% bond or mortgage rates below 10%.  Now, we've been below 6% for so long people think rates are high.  The current complacency is mind-boggling.  VIX below 15!

Thu, 04/21/2011 - 13:50 | 1193070 NotApplicable
NotApplicable's picture

Of course, back then the Fed had yet to complete construction of the Rube Goldberg Magic Money Machine, which sterilizes any market it enters by occupying both sides of every conceivable trade.

You could call it the VIX fix (for the time being, anyway).

Thu, 04/21/2011 - 20:36 | 1194814 IQ 145
IQ 145's picture

 Ah, so that's why you have that Avatar name. The grand old man of bonds. One of my favorite quotations comes from him; "Bonds are instruments of guaranteed confistication".

Thu, 04/21/2011 - 12:13 | 1192659 Silver Bug
Silver Bug's picture

They should be worth nothing. The only thing making them worth anything, is the fact that people think that the ECB will simply bail them out again. Which they more than likely will. But that can only go on for so long. Not my cup of tea.

 

http://silverliberationarmy.blogspot.com/

Thu, 04/21/2011 - 12:16 | 1192662 Cow
Cow's picture

But "Professor" Jeffrey Sachs (Columbia) said "I don't think we are anywhere close to the worst cases of sovereign default"

http://www.youtube.com/watch?v=3oZtPK6hqLU

Hugh Hendry: "I Would Recommend You Panic"


Thu, 04/21/2011 - 12:15 | 1192670 Lotionboy
Lotionboy's picture

QE5 Bitchez! lol

Nancy Pelosi and Charlie Rangel Debating Their Fate As The Dollar Dies

http://theslipperyslopeinvestor.blogspot.com/2011/04/qe-5-bitchez.html

Thu, 04/21/2011 - 12:25 | 1192694 DrStrangelove
DrStrangelove's picture

Shave and a Greek haircut 2 bits, 30year Greek bond, 4 bits

Thu, 04/21/2011 - 12:25 | 1192707 Lotionboy
Lotionboy's picture

Dr. You are a very busy man..I see you everywhere...God Bless

Thu, 04/21/2011 - 12:32 | 1192729 Dick Darlington
Dick Darlington's picture

30Y Greece has been trading around 55 cash for a long time and lately moved towards 50. It's the short end of the curve which is most exposed when the clippers come to do some "liability management exercise". Can't wait...

Thu, 04/21/2011 - 12:57 | 1192837 HoofHearted
HoofHearted's picture

I was actually only surprised that the prices for the Greek 3 month and 6 month were so high. Who would take a 5-7% yield when you consider the default risk? It's just not worth it. And it's probably why silver is up $4 an ounce in the last couple of days.

Thu, 04/21/2011 - 13:55 | 1193101 NotApplicable
NotApplicable's picture

Who? How about those in the know who are front-running the next bailout, like say, Bill Gross maybe?

Perhaps he knows they (EU/IMF/Uncle Ben) are going to prop them up for a few more months, but two years, no way in Hades.

Thu, 04/21/2011 - 12:34 | 1192749 Miles Kendig
Miles Kendig's picture

Gee, I thought it would take a month for Greek 30s to hit 40c.  I may have been overly kind.  No wonder German banks are going ape shit while France remains silent.

Thu, 04/21/2011 - 12:40 | 1192780 Stormdancer
Stormdancer's picture

France has lots of experience surrendering so they're pretty phlegmatic about it all.  Relatively new experience for Germans....

Thu, 04/21/2011 - 13:04 | 1192857 DrunkenMonkey
DrunkenMonkey's picture

Indeed, my french friends still cringe when I remind them that France capitulated and Paris was occupied 6 weeks after the Wehrmacht crossed the border.

Thu, 04/21/2011 - 13:17 | 1192905 Stormdancer
Stormdancer's picture

Vive la Vichy!  :)  There's always a silver lining though.  It's a trait that makes French military surplus rifles some of the best deals in the world.

 

"Never fired, only dropped once!"

 

I guess if we get tired of these endless military adventures we could make ourselves feel better by invading Quebec :)....close to home and it would be over quickly.

Thu, 04/21/2011 - 15:00 | 1193421 newworldorder
newworldorder's picture

The rest of Canada might have something to say about that.

Thu, 04/21/2011 - 18:01 | 1194356 Canucklehead
Canucklehead's picture

I doubt it.

Thu, 04/21/2011 - 19:44 | 1194650 Miles Kendig
Miles Kendig's picture

Heck, most every western Canadian (that's west of the Ottawa river) I know would gladly give Quebec to us.  No need to invade, unless were looking for more stimulus

Thu, 04/21/2011 - 21:04 | 1194892 Tipo anónimo
Tipo anónimo's picture

Yeah, something like "Now we know what it feels like to be freeeeee" or "remember that time that Uncle Sam drop kicked our wicked step-mother down the stairs?"

 

Thu, 04/21/2011 - 18:02 | 1194355 Canucklehead
Canucklehead's picture

I've got one of those.  A pristine MAS Model 1936.  Just like new.

If the CAD gets any stronger, Quebec may surrender to you rather than wait for an invasion.

Thu, 04/21/2011 - 19:50 | 1194697 Miles Kendig
Miles Kendig's picture

At least French battleships don't have glass bottoms so sailors can wave and say: "Buona vedere gli amici come si passa da".  I hear that Quebec financial battleships do tho.

LOOOOOL

Thu, 04/21/2011 - 13:07 | 1192877 Gordon Freeman
Gordon Freeman's picture

Fiddy cent, bitchez!!

Thu, 04/21/2011 - 14:52 | 1193342 jmc8888
jmc8888's picture

Blue light specials always signified crap, so it's perfect.

But considering that greek debt if fraud, and unpayable (if somehow one would refute the first, one couldn't the 2nd), 50 cents seems a tad too rich to me.

Greek Pension funds should get out now, and since they were screwed, reimbursed.  That's standard procedure for dealing with defrauded pensions...and prosecutions.  Sure it's another country, but the right thing to do is the right thing, and there are obviously similarities, we're not talking about Aboriginees, it's Greece..birthplace of western democracy.

As for everyone else, you know what you got yourself into, or should have. The writing's been on the wall for years. 

Plus those running the pensions, need to be barred from handling public money again.  Plus any potential kickbacks or impropriety should be looked at.

Thu, 04/21/2011 - 15:29 | 1193583 johngaltfla
johngaltfla's picture

Thankfully the ECB has this contained.

To the EU for now.

Thu, 04/21/2011 - 16:14 | 1193832 oogs66
oogs66's picture

all the PIGS were weak today, does it really mean nothing or is the stock market just that much smarter than anyone else? 

Thu, 04/21/2011 - 21:03 | 1194877 Hephasteus
Hephasteus's picture

Buy at half price.

Sell at half price.

Profit.

Thu, 04/21/2011 - 21:20 | 1194919 asteroids
asteroids's picture

I predicted a year ago Greece would take the money. They aren't stupid. Then, they will say "NO" and "fuck you". They have a tradition of doing this and anyone that has studied soverign defaults knows this. The only question is before or after Easter. We know the answer to that. It'll be at least 45 days after Easter. Study your history boys.

Thu, 04/21/2011 - 23:35 | 1195208 Mr Sir
Mr Sir's picture

Rumor is 10yr maturity extensions for all outstanding Greek debt with new 3.5% coupons....if bondholders don't approve then it's an immediate 50% haircut for those not willing to play ball. All of those london hedge fund morons which bought 2013 Greek notes thinking it was money good, see you in 2023, or at your next haircut appoitment next year.

Fri, 04/22/2011 - 04:47 | 1195522 ambrosiac
ambrosiac's picture

 

ΒTW some London hedge fund morons angling to position CDSes just managed

a fine bit of manipulation -- all via a sky-is-falling email that went quasi-viral.

 

Whatever the meek may do, the credulous shall inherit nothing.

Athens prosecutors are on the job. 

 

Fri, 04/22/2011 - 07:41 | 1195616 Mr Sir
Mr Sir's picture

The sky has fallen for Greece, the bailout money will run out by August 20, 2012. They either extend maturities or haircut. They will extend first cause the banks holding paper at par will not have to write down their holdings. After that, Greece will haircut cause the math doesn’t lie….Greek government statistics do.

Mon, 04/25/2011 - 20:12 | 1205974 tomster0126
tomster0126's picture

Poor Greece...is there any light at the end of the tunnel for the country?  their situation is just way to sticky to even touch right now.

 

www.forecastfortomorrow.com

Do NOT follow this link or you will be banned from the site!