Tyler Durden's picture

Risk On: With Europe Closed Who Cares About Greece?

Europe is closed, and Greek bankruptcy is out of mind (FTSE at a one month low is victory for the bulls) so risk is on, as seen by the parabolic intraday rise in the EURJPY: The only trade now is to short the Yen and buy everything else, until Europe opens again and Greek yields hit double digits. In the meantime let's sneak a RMBS securitization deal in the form of the Redwood Trust, the first securitization since early 2008: there is no stopping the bubble.

Tyler Durden's picture

Moody's Downgrades Greece To A3, On Review For Further Downgrade (Full Text)

In true fashion Moody's wakes up the day of bankruptcy. The new rating? A whopping A3.

EURUSD drops right back below 1.33.

Tyler Durden's picture

Short Covering Catalyst Du Jour: Bridge (aka DIP) Loan For Greece Primes Existing Debt


Euro shoots above 1.33, as everyone forgets that all 1) this has been tried many times already and 2) this is just a DIP loan and all the existing debt gets primed. Congrats Greece - you are now officially bankrupt

Tyler Durden's picture

The Curious Case Of Greece's Semi-Inverted Yield Curve

Here's one for the history books - this is what a semi-inverted yield curve looks like. The reason for the shaded area, and why the curve isn't inverted off the bat: the IMF has pledged your money, dear Americans, to make sure Greece can at least roll its immediately maturing debt. Americans, via the IMF and Ben Bernanke's Frankensteinian printing press are now guaranteeing the differential between 10% and 5% on Greek <1 year debt. And why? Is it going to prevent a Greek default in the end? Of course not, but at least US taxpayers can enjoy some of the the great moral gratification that being a part of the Komintern provides.

Tyler Durden's picture

Greek 3 Year Bonds Yielding 11.3%, As German Party Member Says Greece Needs Further Austerity Or Should Leave Eurozone

Move along, Greece is still "contained." There's probably 5 corporate names in all of the US that are yielding that much right now. And to add jet fuel to the flames, Handesblatt reports that a German party member says Greece should institute "further austerity measures or leave the eurozone." Goodbye euro.

Tyler Durden's picture

In Addition To Greece, EuroStat Report Catches Portugal Lying About Its Budget Deficit As Well

All hell is breaking loose in Europe on the just released EuroStat report which presents an "objective" look at various countries' realistic debt and budget deficit pictures sans governmental propaganda and lies. And while Greece is getting pounded for good reason, another country where the discrepancy between estimates and reality was even worse is Portgual, whose deficit EuroStat disclosed at -9.4%, on expectations of a -8% number. In the meantime Goldman is reaping a veritable bonanza trading 1 Year Greek CDS (which is at 900 bps) which now has a 200 bps bid/ask spread! Other entities getting bushwhacked as a result include Ireland, which is 23 wider at 173 bps (nothing flattering about the Irish in the EuroStat report either), and Banco Comercial Portugues SA which is 38 bps wider to 297. PIIGS are officially in freefall after the truth has finally set them free.

Tyler Durden's picture

Game Over: EuroStat News Blows Up Greece - 3 Year Spread At Ridiculous 870 bps, 5 Year CDS Hits Record 565

We warned you (here and here). EuroStat reports that the Greek budget was really 13.6% of GDP and the Debt/GDP is more like 115.1%. Greek bond spreads explode to a ridiculous 562 bps on the news, 3 years are at 870, and 5 Year CDS is at 565.

Reggie Middleton's picture

As I Explicitly Forwarned, Greece Is Well On Its Way To Default, and Previously Published Numbers Were Waaaayyy Too Optimistic!

As I warned, Greece is ever closer to default (a default that is damn near guaranteed) while Ireland is probably in worse shape!!! Financial contagion begets economic contagion which breeds more financial contagion...

Tyler Durden's picture

Greece Welcomes Its New IMF Overlords With Day Of Rioting And National Strikes

What do you do when you are the prime minister of a bankrupt country and your only recourse is to get the Washington D.C.-based IMF to come in and tell you you have to cut wages by about 120% and fire 75% of the country (especially after the same Germans you recently demanded WWII reparations from, mysteriously have decided in the eleventh hour to have their last laugh at your expense). Why, you send in the national guard, armed with fake six-pack ridged bulletproof vests and gas masks, to repeat the miracle of Thermopylae against the marauding population which has suddenly realized that the past 10 years of chimeric happiness were a one-time miracle thanks to Mr Goldman and fat, and somewhat stupid, uncle Almunia. The next thing you do, once you realize you are about to have a [revolution|uprising|civil war] is to declare a moratorium on your €300 billion of debt, make your people happy and stick it precisely to the same bankers that you complain about every single day for "speculating" against you. Tomorrow Greece will face the trifecta of a much delayed hangover as 1) its bonds hit 9% as the hedge funds who have been buying up in expectations of a snapback capitulate, 2) EuroStat declares its deficit was officially 14%, and 3) a Greek civil servant strike in their fourth national walkout this year.

Tyler Durden's picture

All Shall Be Well - Goldman's Latest Perspectives On Greece

Delegations from the IMF, European Commission and ECB – a reported total of 20 people – are arriving in Athens today to start negotiations on the macro conditionality of the rescue package. Its been indicated that the IMF loan could be a 3-year Stand-by worth up to €12-15bn, co-financed by a €30bn package of bilateral loans from the other 15 Euro-zone members disbursed during the next 12 months. Meanwhile, markets are reacting very negatively although– to my knowledge – there are no new news. - Erik Nielsen, GS

Tyler Durden's picture

Tomorrow EuroStat Reports European Government Deficits: Expect More Pain For Greece On "Downside Surprise"

Tomorrow, the European Commission's EuroStat agency, which recently was proven to be merely yet another totally incompetent European bureaucracy after the disclosure of how Goldman hid various countries' debt through assorted swaps and fooled everyone and especially EuroStat, will release its 1st notification of General government deficit and debt. The issue here is that this will be the first glimpse into the Greek situation from outside Greece. And the differential should prove to be simply hilarious... not to GGB holders though. The last thing Greece needs as it scrambles to prevent bankruptcy (or to accelerate it... who knows - Goldman may have taught them well) is for the world to uncover that its ~13% deficit was really double that.

Tyler Durden's picture

Closed Door Meeting Discloses The Obvious: "Greece No Longer Able To Borrow From The Markets Nor The Banks"

Headlines from Looks like its IMF-go time. The same source states that the "market situation will be aggravated by Greece's usage of the bailout mechanism 10-12 days from today."

Tyler Durden's picture

Greece Update: Another Day, Another Record: 10 Year Hits 484 bps

Today's 13 week Bill auction has done exactly nothing to tame Greek default spirits: case in point, the 10 Year has just surged to another all time record high of 484 bps spread to Bunds.Notably, and as we expected, just as the Gold selloff last week was predicated on Paulson concerns, the hedge fund manager's major holding in GGBs may well be the reason for increased volatility in Greek bonds. G-Pap now has no choice but to activate the US taxpayer bailout. We are confident this will be spun favorably by the media. We only wonder if as soon-to-be DIP lenders, Americans will now have first dibs on the best rooms at Athens hotels. We are awaiting to get confirmation from bondholders whether or not Greece will enter some sovereign "grace period" on its maturity of over €8 billion in 10 year notes due today.

Tyler Durden's picture

Greece Places €1.95 Billion In 3 Month Bills At A Record 3.65% Rate

Greece today managed to place €1.95 billion in 13 month Bills, slightly more than the €1.5 billion planned. The number is trivial as today Greece sees an outflow of €8.22 billion in bond redemptions to be promptly followed by €1.585 billion in Bill redemptions on the 23rd. What is non-trivial is the interest rate this 3 month Bill came at, which was at 3.65%, more than double the 1.67% yield when the country issued 3 month Bills last on January 19. Compare that with Germany's 3.11% rate on the 10 Year. The bid to cover on the latest auction was 4.61 due to the ridiculously high interest rate. The Greek PDMA debt chief Petros Christodoulou told Market News that he is "very pleased indeed" about the auction. We will see how pleased he is when he has to raise something more than a 6 month tenor.

Tyler Durden's picture

Bundesbank Tells Germany Greece Will Need More Aid

Just like the Hekla eruption caused the Dow to surge in complete disregard of cause and event, or, heaven forbid, logic, so this next news should finally force us to start selling the Dow 36,000 hats. Bloomberg reports that Bundesbank President Axel Weber has told German lawmakers that the €30 billion rescue package promised by the EU and the IMF will not be enough. Just how big will the shortfall be? Well, the recent expansion in the IMF's $50 billion rescue facility to $560 billion should provide some color on the matter. It gets worse: according to Bloomberg, "Weber, citing television footage of Greek demonstrators, expressed concern that sections of the Greek population either don’t care or fail to appreciate the seriousness of the situation their debt-laden country faces, the two people said on condition of anonymity because the briefing in Berlin today was held in private." How quaint - did anyone tell the Greek bureaucrats to look up the definition of the term "austerity" in this whole spectacle? As always, look for the American taxpayers to end up footing an ever greater portion of the Greek bailout bill. That's fine - they won't care: they have the brand new double double KFC burger, a new never to be read book downloaded on the iPad, and the GS witchhunt to keep them distracted, even as their taxes prevent the firesale of Santorini.

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