Greek, Portuguese and Irish CDS All At Record Wides

Tyler Durden's picture

Good morning Europe: do you know where you record wide PIIGS CDS are? From Reuters: "The cost of insuring Greek government debt against default rose to a record high of 1,600 basis points on Monday, hit by concerns that any second rescue of Greece will trigger a credit event or at least multi-notch rating downgrade of its debt. Five-year credit default swaps (CDS) on Greek government debt rose 58 bps on the day to 1,600 bps, according to data monitor Markit.  The Markit iTraxx index of western European sovereign CDS was up 9 bps on the day at 220 bps, near a record high of 221 bps hit on January 10. Portuguese CDS were up 40 bps at 773 bps, while Irish CDS were 33 bps higher at 745 bps, both at record highs. Spanish CDS were up 13 bps at 289 bps." The slow motion European implosion is now accelerating as the reality that there is no spoon, nor rescue plan, is finally appreciated.

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hugovanderbubble's picture

Morning From Spain Tyler,


Belgium is in troubles with hidden non public accounts.

but the worst thing gonna be the IMF visit to Spain - cos our bonds gonna trigger the 7% in the 10yr next months.


Follow next IPO´s (Banca Civica and Bankia) which are gonna be a completly disaster - Real Estate losses are not recognised.


I have a report for ur interest,


Please feel free to contact me at :




Highrev's picture

Nice article in Sunday's Voz de Galicia comparing Spain's autonomous region debt with the German Lander debt (about double the Spanish version in % of GDP terms). Same thing with muni debt. The crux of the article went to the question as to why the huge difference in debt pricing - perhaps explained by historical moral hazard, a huge differencial in current unemployment levels, and a lack of confidence in the current government.

Nevertheless, on a strictly debt to debt level, Germany isn't looking so hot, and when you consider the exposure on their banking sector's books . . .

Eyes may begin to focus on the core more and more.

hugovanderbubble's picture

Exactly Highrev

Government and Subgovernment spanish debt are unaffordable with real unemployment market above 34% and hidden economy spiking above the 44% of disposable net income.

The big falacy in spanish banks and saving banks are the Writedowns regading Collaterals linked to real estate loans specially Land- which may have a real depreciation of 60-90%.

Me as a taxpayer wont add a penny to the system, its time to fight banks abuses.


oogs66's picture

and for all the CDS haters, its not just CDS.  10 year bonds in Portugal and Ireland at all time wides too of 10.3% and 11%

hugovanderbubble's picture

Haircuts inminent

Just track also the massive inflows in CHF deposits accounts from EuroPeriphericals, ...SNB gonna have a tough deal to increase intervention policies.

Greyhat's picture

I love CDS sellers all over the world! :-)

If they have to pay for defaulting Greece bonds its not me, a european tax payer.

BTW: Thats why qe2 money went to europe, its expensive to hold a western empire together.

johngaltfla's picture

Thankfully the crisis is contained. Just like Fukushima.

When this spreads to the Northern European banking system is when it will get interesting because these "credit events" many are anticipating will crush the viability of some of these institutions and a decision will be reached to save or cut loose the PIIGS from the EU.

milanitaly's picture

I don't want to be an I of PIIGS

hugovanderbubble's picture

Calm, Its I from Ivory Coast:)

johngaltfla's picture

No one has even begun to discuss the condition of the Italian financial system which stuns me to this day. It's not much better than Spain or Ireland.

topcallingtroll's picture

People trust the italians are honest and dont have a hidden debt bomb like spain and portugal.

johngaltfla's picture

That trust doesn't mean squat when the banks start to fail en masse.

writingsonthewall's picture

This is a joke right?


The Italians? - them who put about 20% of their GDP down to the black market?


Yeah as honest as the day is long.

hugovanderbubble's picture

The good thing Italy has done and Spain not its the Offshore repatriation funds act.

"Tax Amnisty for those offshore accounts where the big family offices-accounts has been  defrauding during 20 years"...Specially Spain in Lietschestein,Switzerland,Panamá,British Virgin Islands ,Curasao, Holland Antilles,Bahamas and (Andorra)

 which has obtained a mean average of 84.000 Mn Euros for Italian State meanwhile spain 0'...



THE DORK OF CORK's picture

I am more comfortable with Italian debt - given their traditionally high fiscal debt levels the prospects for malinvestment may have been less then Iberia and Ireland since the inception of the EMU

Of course what went on in the south of the country may be somewhat different......

swissinv's picture

at the end it's all about Gold and Italy got a lot of it...

topcallingtroll's picture

Italy was an original pigs from the 1980's when the term first was coined by an anonymous european bond dealer according to legend.

You should be happy now that one of the i's stands for ireland and the focus is off italy.

By the way margaret thatcher was right in that socialism works great until socialists run out of other people's money.

writingsonthewall's picture

...but this is CAPITALISM no SOCIALISM you clown.


You can always tell someone who's not the brightest as they merely repeat what other people (they think are superior to themselves) without actually thinking about it for a second.


This is why most people on dancing with stars talk in metaphors and meaningless catchphrases.


If you can show me any document which refers to 'socialism' (or more accurately communism) with the majority of the means of prouction in PRIVATE hands - then I shall retract this.


Until then I suggest you don't talk about things you don't understand. Strictly speaking 'socialism' doesn't even exist as an ideology in it's own right - it's a transistion to communism, but of course you already knew that - right?


It really worries me that so many people are quite prepared to gamble on markets with lots of money - but very few of them seem to have the first idea about macroeconomics and more importantly Political economics.

It's a bit like 'learning to drive' in that you can operate the car - but not bothering to learn what all those highway signs mean.

Greyhat's picture

The market begins to realize that Moerkel and Schaeuble are standing back to the cliff. German conservatives are not willing to pay for this socialist bailout crap anymore.

Quintus's picture

Sterling inexplicably strong today too.  Euros pouring across the channel?  

DogSlime's picture

No, it's because our economy is strong and well run... as long as you ignore the 400+% GDP debt on our banks' balance sheets.

topcallingtroll's picture

You guys were fourth in total bank leverage right after iceland ireland switzerland and then UK.

USA has plenty of problems but we were 16.

Forbes article from 2008 before iceland crashed.

I see why your government went austere, but now we have reversed roles. You are following 1930 style usa policy that lengthened our depression and we are following 1930 british policy which shortened yours. You guys were out of it in a couple of years while we spent close to ten years in depression.

xamax's picture

Agree with previous posts

At the same time, have a look on Swiss Franc vs Euro, now just a fraction above 1.20, I konw one idiot named Mr. Hildebrand who must not sleep very well these days. Idiot because he is buying like crazy Euros since 1.43, the losses reach astronomic levels.... but the also idiotic mainstream media here in Switzerland start to argue that a strong Swiss Franc is good after they argued during years that we need a relative soft currency !


DogSlime's picture

The FED will bail them out - never fear :P

topcallingtroll's picture

If I had a Greek CDS to sell I would sure do it now.

Everyone who is anyone in europe has agreed there wont be a credit event.

The german banks have volunteered to voluntarily restructure what they own.

" volunteer" is such an orwellian term nowdays.

John McCloy's picture

How many market rumors will be used to slow the decline in the markets this week?
Rumor # 1 last week: Bailout details
Rumor # 2 last week : Lower reserve rate

topcallingtroll's picture

German banks agreed to voluntarily restructure loans.

The focus then shifts back to the usa and our debt limit vote.

John McCloy's picture

You mean then debt ceiling every soul knows will be raised after theatrics? This is not even a maybe.

chump666's picture

corner trade london. market bulltrap, market is now trying to suck in some suckers

Vampyroteuthis infernalis's picture

This is the end game of the world economy. Too many holes and not enough fingers to plug them.

chump666's picture

yeah doomsday trade counting down.  watching europe pre open = bizarre + cds/spreads blowing up = major f*cking sell off

Chris Jusset's picture

Yeah, the end game will occur when everyone finally realizes that fiat currencies are a total joke ... because the sovereigns that issue the fiat are utterly bankrupt.

Peter K's picture

Socialism es Muerte ;)

Sudden Debt's picture

As long as it doesn't rain... it don't really hurt that much to put your head in the sand.


Damn is saddening to see that 99,99999% of our moron population doesn't have a clue what's coming from behind the corner...


cranky-old-geezer's picture

Like I said earlier, the worldwide paper money and debt ponzi scheme is starting to collapse.

There's just not enough wealth left for nations to maintain their economies and fund huge bailouts of other nations' collapsing economies.

Here in America our economy is in the toilet, getting worse, and Bernanke keeps sucking  wealth out of it bailing out Euro banks seeing their PIIGS bond portfolios collapse, taking them to the brink of insolvency, likely over the brink.

There's not enough wealth left in the world to cover all the collapsing debt paper in the world.

At some point bondholders will have to bear those losses.  That's when huge TBTF banks will start failing, start bankrupting.


honestann's picture

Let's hope so.  Here is what needs to happen.

Anyone who has borrowed gold, silver or even fiat currency from someone who earned it by productive work must pay back the money or default in a way in which up to all their assets become property of the creditor.

Anyone who has borrowed fiat from any bank or financial institution that can create money out of thin air (by pressing keys on a computer and thereby crediting their account) should be given the following deal.  The interest rate becomes ZERO percent, but they must repay in physical gold.  The quantity of physical gold they must repay is computed based upon the current price of gold and never changes.

The fractional reserve system is ABOLISHED FOREVER.  No real of fictitious entity can ever be permitted to create fiat, fake, fraud, fiction, fantasy, fractional-reserve debt toilet-paper out of nothing.  NEVER.  Not for any purpose whatsoever, no matter what.  Period.

Real, physical gold becomes the standard, conventional form of payment, though every individual is free to accumulate any real, physical goods as a means of saving, and individuals are free to exchange anything they want for their goods, not just gold.  However, the standard (as in "conventional") way of pricing goods will be "grams of gold".

This is the only way to save the world economy.  Every other scheme leaves the predators-that-be and predator-class in power, and they will ALWAYS destroy and control and enslave in any system where earnings are not attached to production.  Every other scheme leaves governments free to grow at unlimited rates... until they drive the country or world over the cliff and to catastrophe and collapse.

In this scheme, the purveyors of fractional-reserve practices simply walk away and go find productive work.  They get NOTHING in the future from the repayment of those debts, since they did not produce or earn anything to loan in the first place.

Finally, debt will never again become a huge problem, because the only money available to be loaned is real savings of real goods (gold) accumulated exclusively by production and exchange of real, physical goods.  What will happen is obvious - loans will be difficult to get for anything except expanding already profitable businesses, and the total quantity of gold available will be strictly limited to that portion of actual savings that the owners are willing to risk lending.