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Ukraine CDS Explode; Bonds, Stocks, & FX Tumble On Referendum Vote

Tyler Durden's picture




 

While US equity markets could not be more excited at the prospect of more bloodshed, more sanctions, and more WWIII, it seems the Ukrainian markets are not amused. Short-dated CDS are spiking, bond yields surging, stock prices tumbling, and the Hyrvnia is back at one-month lows. Ukrainian stocks are now the worst-performing market in the world and with 10Y bond yields back over 10% (and 5Y near 14%), it seems the exuberance for risk in Western markets is not spilling out into a nation that is 'saved' by the IMF loans and western confidence.

CDS markets are not happy

 

and Bonds, stocks, and the currency are also in trouble...

 

So BTFWWIII!

 

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Mon, 05/12/2014 - 10:09 | 4750583 LawsofPhysics
LawsofPhysics's picture

Name the last time a "CDS credit event" was declared.

 

Well over 800 trillion in the global CDS market.  Total bullshit, CDS, where fiat money goes to fucking die at this point.

Mon, 05/12/2014 - 10:11 | 4750589 wallstreetapost...
wallstreetaposteriori's picture

Cyprus march 2013

Mon, 05/12/2014 - 10:21 | 4750617 LawsofPhysics
LawsofPhysics's picture

A big non-event (no default declared).  Before that Greece, another big non-event (again no default was ever declared), thanks for helping.

Mon, 05/12/2014 - 10:32 | 4750654 negative rates
negative rates's picture

Be patient for the up and coming constitutional convention, plenty of defaults to be had then.

Mon, 05/12/2014 - 13:37 | 4751385 eatthebanksters
eatthebanksters's picture

Didn't the banks that ran the organization ath oversees derivatives change the rules last time there was a threat there was a potential default...

Mon, 05/12/2014 - 10:27 | 4750637 bobby02
bobby02's picture

NEW YORK, April 30, 2014 – The International Swaps and Derivatives Association, Inc. (ISDA) today announced that its Americas Credit Derivatives Determinations Committee resolved that a bankruptcy credit event occurred in respect of four Energy Future Holdings entities:

1. Energy Future Holdings Corp.
2. Texas Competitive Electric Holdings Company LLC
3. Energy Future Intermediate Holding Company LLC
4. EFIH Finance Inc.

Mon, 05/12/2014 - 10:53 | 4750728 LawsofPhysics
LawsofPhysics's picture

Yes, because the debt of soveriegns like Greece were "better investments" and "never defaulted".

What a fucking joke.

Mon, 05/12/2014 - 11:44 | 4750954 bobby02
bobby02's picture

That's not correct. The ISDA Determinations Committee unanimously decided that a credit event indeed occured in Greece. http://www.isda.org/dc/docs/EMEA_Determinations_Committee_Decision_09032...

The wrinkle was that the event occured after the old bonds were exchanged for new bonds, but in the end it made no difference: Buyers of CDS protection were made whole. It actually worked out well, all the more so considering that it was only the 2nd major Sovereign CDS credit event.

Corporate credit events aren't as common now as they were in 2009, but they happen from time to time. You can find a list on isda.org. Auction results are posted on creditfixings.com, among other places.

Mon, 05/12/2014 - 10:34 | 4750660 ZH Snob
ZH Snob's picture

will the yeild-seekers be tempted with the 10 and 14% Ukrainian bonds are offering?  why should high risk stop them?  they have no problem with the american stock market.

Mon, 05/12/2014 - 10:14 | 4750588 JustObserving
JustObserving's picture

Quick, ready the Fed's HFT computers for Ukraine.  The VIX has been slammed, the Dow is at all time highs so there is spare HFT capacity to aid Ukraine and slam gold and silver.

Free and fair markets is a concept that exists only in old textbooks and in the lies of the SEC, CFTC and the Fed.

Besides, manipulated markets make you some so much more money. What could possibly go wrong?

Forward.

Mon, 05/12/2014 - 10:11 | 4750590 Winston Churchill
Winston Churchill's picture

Last one out of Kiev, please turn off the lights.
Oh wait.....

Mon, 05/12/2014 - 11:29 | 4750881 Kirk2NCC1701
Kirk2NCC1701's picture

And don't forget to "turn off the gas" before going on a "long vacation".  To Crimea, for example.

How that Ukaranian saying go?  "Sell in Mai, then go away... to Crimea and stay."  Nazdrovye. /sarc

Mon, 05/12/2014 - 10:12 | 4750592 mayhem_korner
mayhem_korner's picture

 

 

How is this possible?  Isn't risk outlawed?

Mon, 05/12/2014 - 10:22 | 4750627 LawsofPhysics
LawsofPhysics's picture

Please all risk is now back by taxpayers (they don't know it of course) and printers...

hedge accordingly.

Mon, 05/12/2014 - 10:20 | 4750595 Dr. Engali
Dr. Engali's picture

CDS will never pay off as a default will never be allowed to happen.

Mon, 05/12/2014 - 10:24 | 4750633 NoDebt
NoDebt's picture

A default will never be DECLARED to have happened.  It will happen just the same, but CDSs are like Lucy yanking the football away just before Charlie Brown tries to kick it.  Falls for it every damned time.

Mon, 05/12/2014 - 10:31 | 4750651 chunga
chunga's picture

LOL! It's just a matter of before or after; either way same thing.

CTRL-P

Mon, 05/12/2014 - 11:52 | 4750994 Bernoulli
Bernoulli's picture

But CDS aren't supposed to pay off, are they? I thought they were just a tool for the book-cookers to show to their CEOs that all risks are taken care of and the regulators are happy. And also, they make for great bets.

Mon, 05/12/2014 - 10:14 | 4750599 disabledvet
disabledvet's picture

Maybe instead of praying for peace we should just have it.

How does one "will" peace again?

Mon, 05/12/2014 - 10:15 | 4750603 Comte d'herblay
Comte d'herblay's picture

I've got a Hyrvnia lower on my left side just above the groin.  But a few stitches should fix it. 

Mon, 05/12/2014 - 11:08 | 4750763 1stepcloser
1stepcloser's picture

hyrvnia hump alot

Mon, 05/12/2014 - 10:16 | 4750606 beegle
beegle's picture

hyrvnia is the new bitcoin

Mon, 05/12/2014 - 10:19 | 4750614 GeorgeSilver
GeorgeSilver's picture

I don't use CDs anymore.   I record direct to my Mac.

Mon, 05/12/2014 - 10:21 | 4750622 Bunga Bunga
Bunga Bunga's picture

Get over it, Muppets, the puppet master decided Ukraine is off, Boko Haram is on now.

Mon, 05/12/2014 - 10:21 | 4750623 Global Hunter
Global Hunter's picture

So is some entity short Ukrainian CDS or is this all make believe too?  I wouldn't be surprised if there really is no counter party haha because who'd be short Ukrainian CDS right now? 

Mon, 05/12/2014 - 10:23 | 4750629 NDXTrader
NDXTrader's picture

The only question you need to ask is how many Spoos did the BOJ buy this morning. After the disastrous trade numbers last night they hed to keep the carnival going

Mon, 05/12/2014 - 10:23 | 4750634 GeorgeSilver
GeorgeSilver's picture

A new virus has hit the World.   It makes people tell the truth.   Watch out.

 

http://www.maxfarquar.com/2014/05/bring-back-our-girls-bringbackourgirls/

Mon, 05/12/2014 - 10:28 | 4750640 Global Hunter
Global Hunter's picture

phone rings: (answers) trading

Me: Uhh good morning Frank its GH over here at Durden and Associates I got a great trade idea for you this morning, we're recommending our hedgies to short Ukraine CDS.  Uhh they spiked up here today great chance to catch it at the top, our government won't recognize their referendum yesterday and declared it illegal so the CDS is mis-priced and the market is due for a big correction here.  What do you say, great way to supplement the low interest yer gettin on those USTs?

Mon, 05/12/2014 - 10:42 | 4750695 Hughing
Hughing's picture

Some how, some way, the Ukrainian debt will be priced at par and sink beneath the waves of grain. Buy this shit.

Mon, 05/12/2014 - 11:01 | 4750767 q99x2
q99x2's picture

FU Goldman Sachs

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