Irish-German 2 Year Spread Hits Lifetime High On Rumor Of Missed Irish Coupon Payment

Tyler Durden's picture

The 2 Year Ireland-Bund spread has just hit an all time record wide of 835 bps, following unconfirmed rumors that either Ireland or Allied Irish Bank has missed a coupon payment. Since the latter is backstopped by the former it is rather difficult to see where one ends and the other begins. And confirming that Europe can no longer use MENA or Japan as a smokescreen, Greek 10 year spread to Bunds widens 16 bps to 935 bps. Since pretty much all curves are inverted, we expect Ireland to approach Greek default risk within days. This is especially true since nothing in Europe's fiscal situation has changed and the dire funding requirements for debt rolling and deficit funding, are, well, dire.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Careless Whisper's picture

wher i come from, that would be new york, a missed payment is called a deeeeefault.

Thorlyx's picture

and that is bullish, right ?

Sudden Debt's picture

It's bullish for Apple.

The Irish clearly have a malfunctioning planning calendar.

The Ipad has a good one, so if they all bought one, they would never forget to pay coupons anymore.




Sudden Debt's picture

Where I come from, a missed payment costs you a finger ;)

2 missed payments your wife



eigenvalue's picture

Then it's a good opportunity to chuck your wife for a new one! :)

Sudden Debt's picture

not if you like to iron your clothes and do the cleaning yourself...


Harlequin001's picture

I could pay someone to do that...

IQ 145's picture

 Well, I hope this kind of doubt causes people to sell Euros and buy dollars to participate in our glorious stock market; otherwise my short EUR/USD position may cost me a finger.

Bob's picture

Now that was a breath of fresh air: Wankin' bankers.  Greed, greed, and fawkin' greed. 

I didn't know Michael Flatley is from Chicago!  That's one funny video. 

X. Kurt OSis's picture

pog ma thoin, you fawkin wankin bankers!!!  Full of shite, the lot of them.

kris's picture

how long before they admit the emperor is naked?

Thorlyx's picture

he is only naked because his clothes were a little contamined by the fukushima shit.

EscapeKey's picture

Naked? The emperor has entered a physical short clothes position at this point in time.

A Man without Qualities's picture

Tyler - check this out, could become a massive problem for the evil empire that is the Deutsche Bank toxic derivative sales machine...

Josh Randall's picture

Great link - lets hope this is the beginning of a funny mad scramble by these DBags.

From the story I thought this was ironic: "Ille Papier, based in Altenstadt, Germany, sells toilet paper, paper towels and disposal systems for bathrooms..."

I thought they were talking about the Bernank and The Fed for a second

A Man without Qualities's picture

I've actually got some history with this as I have worked on a couple of projects trying to help save companies with toxic structures sold by DB.  It is simply astonishing just how aggressive DB has been in this market and how inappropriate the products that they sell are.  I am familiar with most of the banks in this market, and DB are a different league when it comes to how badly they fuck small businesses and local governments in Europe.  As for the sales teams, I think the DB people are the scum of the earth, who live in a totally amoral vacuum.  Street corner crack dealers have more business ethics than these guys.  I know people hear thing Goldman Sachs is evil, but compared to these guys, they had a high standard of ethics.

The irony is the German government, and even the senior DB management in Frankfurt were unaware of what was going on, though they appreciated the earnings.  I hope it's a long, painful and expensive process for them.

Josh Randall's picture

++1 -- Enlightening A-Man - had a buddy that worked at DB, lets just say he wasnt there long, sounds like a soul-less place for sure

John McCloy's picture

So the Euro should go up on this news in our current markets right?

Harlequin001's picture

Up or down I think we're going to get more of 'em...

Lord Welligton's picture

"following unconfirmed rumors that either Ireland or Allied Irish Bank has missed a coupon payment"

I cannot imagine that the State would have missed a coupon payment.

And I cannot imagine that the State would allow AIB to miss a coupon.

If either has happened it is gross incompetence.


RockyRacoon's picture

Perhaps a confirmed event should have occurred before the posting of the article?   Welcome to the rumor-mill.

On the other hand, it is the missed payments of small bills first that sinks the average household.  The neighbors whisper about it over the backyard fence.

mmlevine's picture

Missed a coupon payment to whom?  ECB?; USA or European Banks?; Federal Reserve?


Harlequin001's picture

Let's just hope it isn't those nice pension funds who've just been forced to bail out Allied Irish and others through some magically wonderful investment deal...

Zina's picture

How many more days until the debt ceiling is reached in the US?

Zina's picture
Treasury's tools to delay hitting debt limit:


Pelosi not sure Boehner has votes to raise debt limit:


If the debt ceiling is reached, THAT will be a nuclear catastrophe... 

Quintus's picture

So - just as the dollar is on its deathbed, waiting to drop into the 74 handle and thence rapidly lower, a 'Rumour' of a vanishingly unlikely event that just happens to carry negative connotations for the Euro (the largest weighting in the Dollar Index) is spread and bingo!  The dollar undergoes a Lazarus-like resurrection.

A missed payment (i.e. Sovereign default) would never be allowed.  Nobody in Europe would pull the plug on all their work to rescue the Euro at this point.  If AIB had no money they'd have called the Irish CB.  If the Irish CB has no money they've have called the ECB.  If the ECB had no money, they'd print it.  No matter what the Core/Peripheral country politics are in the Eurozone, this event would spell catastrophe and the Eurocrats would simply not let it happen at any cost.

This 'Rumour' is pure BS.

Lord Welligton's picture


While the 2yr and 10yr have exploded it simply cannot be based on a coupon having been missed.

Theta_Burn's picture

^ Spot on

Not much longer can these games be played.

The "end game" default distraction slowly bombs & missiles

Larry Darrell's picture

Even with this rumor out there the dollar can't catch a bid

USDX @ 75.4


IQ 145's picture

 There's always tomorrow; says one of the crazy people on the wrong side of the trade. {"Hope"} is good.

ZackAttack's picture

If they're going to default, they're negotiating with the bankers why, exactly?

spanish inquisition's picture

It's time the Irish call on the spirit of St. Patrick to once again rid the island of snakes (bankers).

gwar5's picture

If PIIGS got together to default all at once things could get very interesting.

They could even form their own little union and negotiate.

The Greeks could copy Bernanke and just pay the EU back in fresh Drachmas.

Problem solved.

John Law Lives's picture

Too bad they can't just print up more of their own currency and paper over it.  They need to open their own McBernank.

Harlequin001's picture

They did, but I think Ireland can't print quite so much as the US, and Allied Irish have been a little too enthusiastic for the size of the economy.

I think this will turn out to be just a rumour...


themosmitsos's picture

Ireland playing hardball imHo

unununium's picture

How many coupons have to be missed to trigger the CDS?  Could Ireland blow the derivatives depot and then go back to making payments?

lsbumblebee's picture

Is this the same rumor mill that shot Gaddafi?

ml8ml8's picture

Some grandma in Ireland called into a talk radio show there and said she didn't get her coupon payment in the mail yesterday.

sodbuster's picture

This is bad news, we'll probably only be up 100 points today.

Lord Welligton's picture
"News Headline Summary Latest update on Ireland, market talk that AIB has not missed any coupon payments, as they are not due until the end of the month "

Lord Welligton's picture

Something is definitely happening.

Perhaps insider information on the bank "stress" tests?

oogs66's picture

Finally starting to hit the radar screen again.  Anyone ever see details of EFSF2 or whatever they are calling their ability to buy bonds?  CDS also leaking, it had hung in better than cash for a couple days so strikes me the shorts/hedgers are getting excited/nervous again and will try to push it wider.  Really looking for details of the revised EFSF but I suspect the market will be underwhelmed, much to the chagrine of the politicians (in Germany and France as those in Ireland and Greece no longer seem to care to play kick the can).

Wynn's picture

Is there a no-fly zone over Ireland yet?

americanspirit's picture

I wonder how long before the folks in Ireland decide its time to put the banks under their own very special kind of stress test?

Lord Welligton's picture

Would water-boarding the Directors count as stress?