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Emerging Market CDS Blow Out

Tyler Durden's picture


The last time markets scrambled for protection against sovereign defaults was over European country collapse in the summer of 2012 around the time Mario Draghi introduced a non-existent measure to allow Europe's nations to engage in zero reforms while their bond yields plunged. This time it is the emerging markets.

  • Argentina +139bps at 2562.07bps, hit highest since Sept.
  • Venezuela +81bps at 1398.19bps, highest since 2010
  • Turkey +11.6bps at 276.7bps, highest since June 2012
  • South Africa +10bps at 236bps, highest since Sept.

Of course, CDS aren't telling us anything (capital-controlled) FX hasn't already made quite clear.

Source: BBG


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Fri, 01/24/2014 - 08:45 | Link to Comment _ConanTheLibert...
_ConanTheLibertarian_'s picture

Percentages please.

Fri, 01/24/2014 - 08:45 | Link to Comment buzzsaw99
buzzsaw99's picture

jebus back them out yourself

Fri, 01/24/2014 - 08:57 | Link to Comment Headbanger
Headbanger's picture

Because Obama

Fri, 01/24/2014 - 10:32 | Link to Comment Stoploss
Stoploss's picture

"(capital-controlled) FX"


Don't tell Simon.

Fri, 01/24/2014 - 10:35 | Link to Comment economics9698
economics9698's picture

It's Bush's fault.

Fri, 01/24/2014 - 08:57 | Link to Comment Super Marco
Super Marco's picture


Fri, 01/24/2014 - 08:48 | Link to Comment Sudden Debt
Sudden Debt's picture

Trying to play with the big boys and this is what happens...

Fri, 01/24/2014 - 11:38 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Not "trying to".  Being "made to". Thanks to combo of Goldman + DOD + NSA + CIA

Cause that's how the big eat the small:  by injecting them with toxic liquidity.  They weave the web/trap, steer the target into it, inject them with toxic assets, let time do its thing, and then they gobble them up.

It's the neo Neocolonialism of the 21st century.  It's the banker-assisted national suicide.  It's the latest version of Manifest Destiny - gone Global:  "All your asse(t)s belong to US!"

Fri, 01/24/2014 - 09:00 | Link to Comment Johnny Cocknballs
Johnny Cocknballs's picture

What about Hungary?

It appears they are going their own way.

What Would Krugman Say?

Fri, 01/24/2014 - 10:04 | Link to Comment bobert
bobert's picture

Why Krugman?

Churchill would say - Beware the German's and after that the Russian's.

Fri, 01/24/2014 - 12:10 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Hungary is in the EU, so they'll get more slack.  This is about whacking the BRIC Affiliates, and to keep more from joining the "other" camp.

Chinese proverb:  "If you want to discipline your monkey, you must behead your rooster"

Fri, 01/24/2014 - 08:59 | Link to Comment Unknown Poster
Unknown Poster's picture

Taper Tantrum II finds safety in the yen?

Fri, 01/24/2014 - 10:06 | Link to Comment bobert
bobert's picture

Nuclear yen.

Fri, 01/24/2014 - 09:02 | Link to Comment Quinvarius
Quinvarius's picture

If they can't stop gold, it must be serious.  Protecting their no gold ponzi scheme is really all they care about.

Fri, 01/24/2014 - 09:15 | Link to Comment debtor of last ...
debtor of last resort's picture

They can stop gold. Only phyz shortages can stop the scam, so maybe it IS phyz shortage. But like i've read several times in the comments: "something" changed a few weeks ago, or "it feels different". I have the same feeling.

Fri, 01/24/2014 - 09:03 | Link to Comment reload
reload's picture

Has a  sovereign CDS ever paid out?

with the ISDA commitee members massive net writers of these `insurance pollicies` they tend not to be worth the paper they are written on - even when bond holders take haircuts.

just another derivative to sell to muppets who hope to find another muppet etc etc before the music stops.

Fri, 01/24/2014 - 09:08 | Link to Comment youngman
youngman's picture

Remember in Greece where the ISDA kept saying that it was never a default....remember the IDSA is made up of the bankers that sell this the fix is in...its not a default when you are never going to get paid new definition....never

Fri, 01/24/2014 - 11:09 | Link to Comment Urban Redneck
Urban Redneck's picture

And bankers regularly reject vast offers of free OPM, and banks prefer to realize their paper losses and represent them on their balance sheets, and bankers never eat their own, particularly when there's blood in the water...

The politicians and FRB staff will be good little field niggers and do WHATEVER Jamie, Lloyd, Warren and the rest of them order, particularly in terms of cutting the big banks even bigger checks to cover substantial losses. And unicorns will continue to happily shit economic recovery skittles through state sanctioned propaganda channels. However...

The instant TBTF goes out the window, all bets are off.

In the meantime the number of slaves who have been effectively conditioned to be terrified of freedom is sickening.

Fri, 01/24/2014 - 13:12 | Link to Comment disabledvet
disabledvet's picture

ummm..."they had bail in's instead." that means they simply took the deposits as a Government Agent...this is in a place with...well, obviously i guess, "no FDIC." The crime? "paying an unacceptably high rate of interest on savings" it would appear.

And of course "the problem is not with any of the third world debt but in fact the 1st debt."

Say what again?

This "thing" is levered to a massive recovery in that has collapsed instead.

Muni debt is having a nice day.

Fri, 01/24/2014 - 09:09 | Link to Comment q99x2
q99x2's picture

Here she come Yellen. There go the Taper.

Fri, 01/24/2014 - 10:08 | Link to Comment bobert
bobert's picture

She's a dove, no?

So what's up with her tapering?

Fri, 01/24/2014 - 09:19 | Link to Comment NoDebt
NoDebt's picture

Ray:  So, wadda you got, Egon?

Egon:  Sorry, Ray, I'm scared beyond the capacity for rational thought.

Fri, 01/24/2014 - 09:25 | Link to Comment q99x2
q99x2's picture

Anyhow, this is a buying opportunity.You have Bloomberg working the fear controls and FED computer software controlling the indexes. Goldman Sachs is pulling the levers.


Fri, 01/24/2014 - 10:13 | Link to Comment bobert
bobert's picture

What dip are you buying.

Stocks, bonds, metals?

Sorry but I'm not ZH enough to know.



Fri, 01/24/2014 - 09:28 | Link to Comment CrimsonAvenger
CrimsonAvenger's picture

Oh come on, those are all loser countries. Wake me when something happens to the United States of Awesome.

Fri, 01/24/2014 - 09:58 | Link to Comment hugovanderbubble
hugovanderbubble's picture

The end is closer in Bond markets.

Fri, 01/24/2014 - 11:06 | Link to Comment ConqueringFools
ConqueringFools's picture

I love how everyone poo pops these countries as if they are some third world shit holes. Turkey is a huge economic player in the region. SA? The economic powerhouse of Africa. Venezuela is one of the biggest oil producers in the world. If that country implodes you don't think it will effect price of oil? Lol...... Let this bitch market tumble! Crash into the $&@: dirt! Maybe then we can focus on a real recovery!

Fri, 01/24/2014 - 11:45 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

It's just Wall St plus the MIC collaborating for mutual benefit (one dirty hand washes the other), to grow the Empire, while slowly encircling their ultimate prey:  Russia and China.

Financial Wars + Military Wars = US (Neo-)Imperialism

Fri, 01/24/2014 - 12:56 | Link to Comment Paracelsus
Paracelsus's picture

The time when countries need credit the most,in extremis,the costs of borrowing skyrocket due to CDS insurance because of risk of default.

The time when refugees need asylum all the countries close their doors (quota filled,so sorry!).

For all the problems in Venezuela,they are energy self sufficient,and they got their gold back.Too bad about the stock market crash that's coming.

Also,at a time that the world is broke,the Defense contracts must be going thru the moon.

Can't be much fun sitting in one of those refugee camps in Syria in the winter time.Get the world media to bang on about those WMD's again,so we will understand the purpose behind their freezing and suffering. 

Fri, 01/24/2014 - 13:15 | Link to Comment disabledvet
disabledvet's picture

they'll be lucky to be paying ten bucks a gallon for gasoline in Venezuela.

They got their gold back?

Interesting Socialist Platform.

Sat, 01/25/2014 - 05:44 | Link to Comment shawnmike
shawnmike's picture

Meanwhile the controlled sell-off in US equities is just that, completely controlled, and ready for the late day ramp. All while they go mad for bonds. Whatever, don't think anyone's jumping from windows on Wall Street just yet

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