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One Year Ago, These Bonds Were Eight Times Oversubscribed
Almost exactly one year ago, Greece returned "triumphally" to the bond markets when it issued its first 5 Year bond post-bailout at the lowest yield since 2009. This was trumpeted by business media...
Congrats to Greece on its triumphant return.
— Joseph Weisenthal (@TheStalwart) April 10, 2014
... who especially clung of the fact it was eight times oversubscribed, more than the demand for Facebook IPO shares, as 'proof' that Greece was fixed, the crisis was behind Europe, and everything should be bought.
There were countless comedic punchlines, such as the following:
Greek bondholder Hans Humes, chief investment officer at Greylock Capital, said costs should be as low as 25 bps above Portugal's, or about 3.25 percent.
"Sure, the costs are a bit higher when coming to the market but the sooner they do it the better," said Humes, who believes Greece's debts to the private sector are so small compared to those owed to the EU and IMF that another haircut imposed on private investors makes little sense. "Selling to a voluntary market on a new issue basis is a game changer," he said.
We were far less sanguine and at the time we noted, "claims that is the best example of positive sentiment and of a new normal are foolish - if nothing else, this is a sign of utter complacency and exuberance."
We were right.
From 8x over-subscribed to 60c on the dollar in a year.
Which however is great news for Mr. Humes: because if he liked the bonds at a yield of 4.95% he should be all-in this morning when they are yielding a record high 20.2%, right!?
"Fear Of Missing Out" - that is the only way one can explain the irrational idiocy with which asset "managers" are scrambling to allocate other people's money into today's "historic" Greek (where unemployment just printed at 26.7%) return to the bond market, and which according to Greek PM Venizelos was eight times oversubscribed, or far more demand than for the Facebook IPO.
It seems, once again, that Greek yields are catching up to the state of collapse in the country, and the only thing that is preventing the rest of Europe from following Greece into an ecnomic singularity is hope and faith that Mario Draghi will continue to monetize everyone else's bonds, ironically the same "catalyst" behind the 8x oversubscription.
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Chasing yield.....that has been the game the last few years..and will be in the future.....
Suckers.
Step right up folks
Once market participants realize they have misjudged the safety of bonds, duh, I believe precious metals will take the mantle as the preferred safe asset class. The likelihood of gold and or silver replacing dollars as the medium of exchange is pretty low thus, looking forward, comparisons between gold and silver and the dollar as is often done are not as useful as comparing gold and silver to the current ‘safe’ asset class, bonds. I explain it more thoroughly in the link above.BOHICA, with a side order of deja vu.....
Losing money in stocks is for amateurs. Anyone can do that. But if you want to lose BIGTIME money, you need to be in bonds. Just ask Jon Corzine.
"Gentlemen prefer bonds." -- Andrew Mellon
But if you want to lose BIGTIME money, you need to be in bonds hold until maturity default.
Hold until default. Love it.
Do they own or have control of their own printing press? If yes, you're safe to buy. If not, walk away.
Extreme bullishness
Does the concept of 'debt' really mean anything anymore ?
Not according to the 'markets'...
DavidC
"Debt doesn't matter" is the greatest Keynesian lie ever told. A lie so big most can't even grasp the enormity of it. It's the underlying cause of everything turning to shit across the entire developed world. So if that sort of stuff matters to you, then Yes, debt still means a lot more than just 'something'.
"Debt doesn't matter is the greatest Keynesian lie ever told.."
I gave you a down vote as you are incorrect. Lord Keynes, himself, never said such nonsense. Lord Keynes asserted that government spend money, go into debt, in downturns, however, according to him, governments were to save during boom times.
Modern Neo-Keynesians maintain the nonsense believe in the nonsense that 'debt doesn't matter'.
Ironically a famous book once taught that all credits and debts should be released at the end of 7 years.......there was a reason for this but it has been lost on modern society.
I bet the Greylock Capital Garden Party will be a hoot this year.
Today is the top of the US market....bookmark it.
So noted.
got it
aand yet, nobody is booking losses
what a ku winka dink
Get with the times, loses are so 2000s.
This could have been over long ago if the Greeks would just rip off the fucking band aid and defaulted on their debt. But instead, here we are five years later talking about the same shit while the Greek people suffer. When does the populous say enough, and start hanging bankers? WTF does it take?
It's ok to live with parents.
It may have something to do with the Greek government not really giving a shit about the best interests of it's people. Thank God that could never happen in the US.
Hillary Clinton loves you and wants to take care of you. I know this because the teevee told mo so.
The motherly love just oozes out of her pores, doesn't it?
The average Greek doesn't care. They're even more apathetic than Americans, if such a thing is possible.
Funny how these money managers never say “I guarantee it.” I guess that would make them sound too much like a used car salesman, and no one will ever believe they have that kind of credibility.
I believe the financial guru Obama guaranteed the MyRA.
I will never understand why people give their life savings to disinterested third parties.
Sound familiar? Was at Lowes this past weekend and ran into my kid's 66yr old school maintenence guy who then began to divulge why he had to work part-time again. He lost half his retirement savings in the last crash after investing for 30+ yrs.
Cleaning up regurgitated corn dogs may soon be a higly desired retirement plan.
All hail Mario's FOMO.
Poor, poor bond "investors". Will anyone think of the "investors". It's just a damn shame that these patriotic and brave men need to suffer losses while the fat and happy Greeks dine on crusty bread and leasurely hang out under bridges all day.
I cannot believe that these jokers manage money. They should be cleaning tiolets.
Muppets clean toilets.
Good thing that doesn't translate well into Mandarin.
My sweater is not done yet.
lmao.
<sarc>
Debt the new money.. (strike that) new - old money. Honestly I read article after article that debt expansion created growth in the economy. I guess the old Jew Ph.D.s slide ruler brains havn't grocked what happens when loaning money is a guaranteed loss for the loaner. Talk about credit and money destruction. NIRP primed and ready to destroy money. But hey CBs ready to print some more juice for the fear..
Also I have read on growing less occasion the articles here and the stupidity and lack of insight becomes overwhelming. People keep talking about Gold and Silver as a 'store of value'. Anyone looking at what is going on in LENR (Low Energy Nuclear Reactions - aka Cold Fusion) lately? The idea that we may be very close to being able to actually produce gold and silver, and whatever other element we want on demand and maybe get energy doing it blows the idea of 'elements' as a store of any kind of value out of the water. YET NOT ONE article on ZH regarding this enticing possibility for YEARS nor how bigger players might react if this is even a remote possibility (i.e. hedging positions by SELLING)
Now if LENR could give us unlimited energy then guess what that does to carbon based fuels as well. Unlimited energy would also go a long way towards changing how we humans deal with our world and potentially brings us the ability to clean up our environment.
I would be the first to agree we arn't there yet and a lot of work needs to be done. If it's all air then humans are toast. IF LENR is the next game changer it completely transforms everything in our society top to bottom. Unlimited cheap clean energy saves us in one fell swoop. Transmutation of elements as a byproduct of this process completely transforms how business is done. YET NOT ONE ARTICLE on ZH talking about this as even a remote possibility at this point.
End of the world and fear is all that sells.. Seems to me then that ZH is basically the front of another governmental turd being laid out for the populace to snort so they too can 'smell the fear' and 'buy the fear'. Not one solid article on how to take a dying civilization or dying process and how to transform it into something sustainable or positive.
In time the odds of us all being dead go to 100%. Well I'll hazard that ZH will be dead before me and I'm a pretty old Ant...
Unfortunately most of the internet is a bloodly wasteland of 5 year old adults tweating what fruit their farts smelled like, or what new chic is hotter vs. how we can use this medium to get our shit together and grow up collectively as a society and what this means to us as individuals.
Keep droning on with the BS ZH clearly the 5 year olds need more fear since normal media isn't cutting the mustard anymore. Man I'm getting old but I still can recognize a diaper economy and civilization.
Smell the fear. Sorry folks all I smell is shit and felt it was time to add my dump as well. Wipe my ass please my government decided it won't do it for me again until the first of the month when my ass wiper comes by.
Bravo, applause.. </sarc>
OldE_Ant