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Pair Trade Opportunity Of The Year: Long European, Short Chinese Caterers

Tyler Durden's picture





 

It has been a recurrent joke that in addition to Germany (see chart), the only winners out of the slow-motion trainwreck that is the Eurozone, are the Belgian caterers who in 2010, 2011 and 2012 had an absolute record profit year following what was a weekly summit after summit in which we learned, without fail, that Europe is fine, couldn't be finer, and to "believe" Draghi that he would crush and mangle anyone who dared to short the EURUSD (ironic when every other central bank is literally paying FX traders to short their currency). But while caterers were literally swimming in money in the past three years, charging European taxpayers hundreds of thousands of euros per hour for either sturgeon eggs and pâté, or boxed lunches depending on the amount of austerity imposed, so far 2013 has been rather dry. All that of course is about to change, following the epic fiasco with the Cyprus "bail-in", which courtesy of Diesel-BOOM's subsequent clarification, is a unique template that will never be repeated... until the next PIIG finds itself in the same trough, which now that the dominoes are dropping once more, shouldn't be too long. Which is why the best levered derivative trade on the European "positive contagion" mutating back into its "negative" wilde-type is to go long European caterers.

However, to offset as much non-catering risk as possible, it would be ideal to have a pair trade opportunity, whereby to go short an offsetting catering exposure. Luckily, we have found just that. Luckily we have just the trade.

Courtesy of the Goldman chart below, we now know that while European caterers are about to go stratospheric, their Chinese brethren just got the proverbial smackdown.

What happened?

A sharp sequential decline in growth and consumption during Jan-Feb from 4Q12, likely owing to an anti-corruption campaign that is weighing heavily on large sectors, such as catering, as well as liquidity tightening in February after a loose January.

Who would have thought that a business as simple as catering was a proxy for corruption? Of course, that this happens to be the case merely reinforces our conviction in the long leg: if there is one thing Europe will never have a shortage of, it's corruption.

So to all those sick of the manipulated stock market, the ridiculous bond bubble, the "close banged" precious metals space, and every other asset and risk class micromanaged by Bernanke & Co, we suggest the following trade:

  • go long European caterers, short Chinese caterers, delta-hedged and duration neutral

How do you go about procuring such exposure? Don't ask us: we are merely the analysts. For execution speak to your friendly Sigma-X, REDI or Goldman Sachs a la carte securitized, structured deal designated contact (or just leave a Voice Mail for Fabrice Tourre).

 


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Wed, 03/27/2013 - 18:00 | Link to Comment max2205
max2205's picture

Soylet green is very good today sir

Wed, 03/27/2013 - 18:13 | Link to Comment NotApplicable
NotApplicable's picture

+1 Tyler!

Would LOL again.

Thu, 03/28/2013 - 01:54 | Link to Comment old naughty
old naughty's picture

report says floating dead pigs might have something to do with new leaders crackdown on officals free-spending (eh eating)...

chemicals shot into pig can only last so long before 'deflated' (eh, side effects) so pigs had to be 'dumped' (why river near Shanghai, your guess is as good as mine).

Thu, 03/28/2013 - 04:46 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

Europe is find in deep trouble...

 

P - Portugal (95% Debt GDP)

I - Italy (125% Debt GDP)

G - Greece (140% Debt DGP)

S - Spain (85% Debt GDP)

H - Hungary (Private Retirement Saving is Confiscation)

I - Ireland (95% Debt GDP and too much drink warm beer)

T - Turkey?

 

Wed, 03/27/2013 - 18:17 | Link to Comment Sudden Debt
Sudden Debt's picture

Soylet Yellow anyone? Flesh flom oul backneighbouls!

Wed, 03/27/2013 - 18:02 | Link to Comment McMolotov
McMolotov's picture

Stay away from the cream of mushroom soup.

Wed, 03/27/2013 - 18:04 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

I'll stick to hard assets, real hard assets;

http://tinyurl.com/cuo4z3s

Wed, 03/27/2013 - 18:30 | Link to Comment Sudden Debt
Sudden Debt's picture

not every real asset needs to be hard...
http://www.demotivationalposters.org/facebookview.php?id=119639
sometimes I like to squeeze those assets...

Wed, 03/27/2013 - 18:56 | Link to Comment NoClueSneaker
NoClueSneaker's picture

... erm, be sure not to squeeze them on an international flight. You know, if they explode, your next flight by Gitmo Tours ....

Wed, 03/27/2013 - 18:57 | Link to Comment skank
Wed, 03/27/2013 - 18:06 | Link to Comment Cdad
Cdad's picture

lololololooll....that last line....jigglin'....lolololololol....can't write.....loloololololol.

Whew!  I needed that, Tyler!

Wed, 03/27/2013 - 18:09 | Link to Comment Yen Cross
Yen Cross's picture

    That was hilarious Tyler. I can't stop laughing.

Wed, 03/27/2013 - 18:21 | Link to Comment falak pema
falak pema's picture

which euro is dat?

Is dat the Cyprus euro or the ozer euro?

Vee gott tvzoo euros now in eurozone; a union with tvzoo euros, one frei the other kontrolled; siamese twins, only one drinks ouzo and vodka mixed! 

Wed, 03/27/2013 - 18:41 | Link to Comment Sudden Debt
Sudden Debt's picture

WE GOT THIS!!!!

THE NEW EURO'S ARE MINTED IN ENGLAND AND SHIPPED TO CYPRUS!!!!

http://www.pennyjellies.com/index.php/sweets/chocolate/chocolate-coins/

but euuuhhh....

as a reminder....

they're englsihhh... so they don't really handle the sun all that well....

http://www.flickr.com/photos/mnicolem/2585018163/lightbox/

Wed, 03/27/2013 - 18:18 | Link to Comment Sudden Debt
Sudden Debt's picture

anyone seen my dog?....
it's been strangely missing since those chinese people started moving in at the end of the street....

Wed, 03/27/2013 - 18:58 | Link to Comment NoClueSneaker
NoClueSneaker's picture

It's eastern - rabbits needed ...

Wed, 03/27/2013 - 18:20 | Link to Comment YC2
YC2's picture

Short Chinese caterers is a stereotype, buddy.

Wed, 03/27/2013 - 21:04 | Link to Comment ihedgemyhedges
ihedgemyhedges's picture

+1.  Now, shut up and reave Tyrer arone......

Thu, 03/28/2013 - 02:15 | Link to Comment Manic by Proxy
Manic by Proxy's picture

So that's your slant on it.

Wed, 03/27/2013 - 18:20 | Link to Comment Silver Garbage Man
Silver Garbage Man's picture

My pair trade....Long metal, food, protection....Short any paper.

Wed, 03/27/2013 - 18:36 | Link to Comment Sudden Debt
Sudden Debt's picture

short any... AND HOW WILL YOU BE WIPPING YOU ASS?!?!?

DIDN'T REALLY THINK THAT ONE TROUGH NOW DID YA SON?!?

Remind me to NOT shake your hand... no pun..

Wed, 03/27/2013 - 19:10 | Link to Comment NoClueSneaker
NoClueSneaker's picture

There's an old DDR-joke to resolve that problem:

Walter Ulbricht on the Congress of Est-German Communists:

" We rebuild the country with our Soviet friends, there are the railroads, houses, food, joy, happiness ..... "

>> The voice from the dark :

" How about some toillet paper ...?!?! "

Ignorance.

Second five years plan:

" We have tractors, Trabant, Wartburgs, sewage and Kindergarten for all, we made it with our Soviet friends .... "

>> The voice from the dark :

" How about some toillete paper ....?!?! "

Ignorance.

Honecker :

" We have full employment, we managed into the space with our Soviet friends .... "

>> The voice from the dark :

" How about some toillette paper ...?!?!"

 

Honecker:

LECK MICH DOCH AM ARSCH !!!

>> Voice from the dark:

" Das ist doch eine individuelle Lösung. Was ist mit dem Kollektiv ... ? "

 

 

 

 

 

 

 

 

 

 

 

 

Wed, 03/27/2013 - 19:21 | Link to Comment Sudden Debt
Sudden Debt's picture

I bet if I lived in the DDR in the 90's... I would be laughing my ass of right now...
But I didn't...

so euh.... who's walter? Is that somebody like waldo?

Wed, 03/27/2013 - 19:27 | Link to Comment negative rates
negative rates's picture

No, he was a Chicago taxi driver. Until he joined the undergound dealers holdin cinderella hostage to frankfretters, she swallowed um hole and spit him back on the streets where he thought he was Kansas, but he wasn't. He was sittin at vegas slot machine pumpin nickles tryin to get lucky 7's to come in with an 80% take for the house. Need I say it won't be long before he's broke.

Wed, 03/27/2013 - 20:08 | Link to Comment Silver Garbage Man
Silver Garbage Man's picture

You can shake my hand, my floor joists above my basement ceiling are full of paper towels, toilet paper, and my wife's goodies. It is a great place to store paper products. Enough for a year.

Wed, 03/27/2013 - 18:40 | Link to Comment Miss Expectations
Miss Expectations's picture

This is just snarky enough to be Tyler #1.

The Chinese Catering Calamity may explain the pigs in the Nanhe River...mou shu anyone?

Wed, 03/27/2013 - 18:52 | Link to Comment Frastric
Frastric's picture

Pair trade for 2013 and beyond: short coke, hookers and orgies; buy bibles, booze and 'god'.

Wed, 03/27/2013 - 19:56 | Link to Comment worbsid
worbsid's picture

You must have just got a girlfriend on that Christian Mating Web thingy.

Wed, 03/27/2013 - 19:14 | Link to Comment Itch
Itch's picture

I heard Fabulous Fab got depressed after all that terrible, terrible stress and he started comfort eating, now eveyone is calling him Flabulous Flab.

Thu, 03/28/2013 - 02:12 | Link to Comment Manic by Proxy
Manic by Proxy's picture

Ironically, the word "Europe" is derived from Sanskrit and ancient Hindi-Slavic.

"Eaur" in Sanskrit "land of malfeasance", and "oppa" in Hindi-Slavic meaning

"decaying uncle" or "bastards planning to enslave financially or actually".

So Europe actually means corruption. And corruption means business. And business

means fascism.

 

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