Anyone Who Bought 10Y Spanish Bonds This Year Is Now Underwater

Tyler Durden's picture

Via Peter Tchir of TF Market Advisors,

Anyone who bought the 10 year Spanish bond this year is now down money.  It does have a 5.85% coupon, so if you bought the prior lows on Jan. 6th, you have earned 1.6% of carry.  Anyone else has lost more and not earned as much interest.


This year matters because 1) a lot of funds were light on risk into year end, so even if they bought into the LTRO argument they waited until this year to buy, and 2) some funds may not focus on monthly returns, but all of them focus on YTD returns.


This bond is bouncing up and down today on no volume, but I think we are very close to levels that could see a mass exodus of stop loss trading on levered positions.


As we noted earlier, this also raises the very notable concerns regarding ECB margin calls - set to be announced tomorrow as it is entirely evident that any bank that actually took LTRO loans and used it to buy Spanish debt is now underwater by more than the de minimus haircut the ECB set at initiation. How this will impact bank capital is unclear as they seem strapped at best and on the margin desperate at worst.

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battle axe's picture

No Way...Way. Bummer. People who buy this shit deserve to get their face torn off. 

Ahmeexnal's picture

And while the hispanic serfs are starving and rioting, the sociopath emperor goes hunting for elephants:

"Let them eat elephant"?
Seems like the serfs of Hispania will soon hang the sociopath and its family.

Ghordius's picture

If you read the Spanish comments, you'll see a different picture. The Spaniards hanging Juan Carlos? No way, José.

And I have no clue why you think he is a sociopath, you should read up on the transition from dictatorship to constitutional monarchy in Spain and Juan Carlos' role in it.

Ahmeexnal's picture

Hey G:
Maybe the real story about sociopath emperor Juan Carlos should be known by all. He is a puppet monarch, placed by the angloamerican elite (which you so much denounce).
You (and probably 99% of spaniards) do not know that the much celebrated "rey Juan Carlos" went into a room with a gun with his only brother in 1956. He was the only one to come out of that room alive.

Of course the "official" story is that it was an accident.
Juan Carlos was 18 at the time and had plenty of experience with guns.

And the fact that he goes elephant hunting (this trip is not the only one he has taken) means nothing to you?
Cognitive dissonance?

Spain has just received a major swing with a baseball bat right on its head: ARGENTINA HAS NATIONALIZED YPF (formerly owned by hispanic REPSOL).

Global Hunter's picture

You tell 'em Ahmeexnal, the girl who replied to your post is a slobbering pro euro, pro statist, pro government weenie.

Ahmeexnal's picture

Sociopath murderer Juan Carlos poses with an shot elephant:

To add insult to injury, Juan Carlos is the head of the WWF in Spain.

Spaniards are now urging him to abdicate.

Notice his gay hunting buddy (guess where the king's other hand is). Maybe that's the real reason queen Sofia gets really pissed off when Juanito goes "hunting".

Ghordius's picture

hunting and WWF are not incompatible - How many Spaniards are urging him to abdicate?

that gay hunting buddy is dressed the way quite tough gun-toting Afrikaans are dressed - so careful.

Ahmeexnal's picture

"How many spaniards are urging him to abdicate?"

Why do you care how many? It's not a democracy. How many spaniards want austerity/unemployment/suicide?


tough gun-toting and gay are not incompatible

I'll give you credit in stating something that might not be so obvious: the fact that hunting and WWF are not incompatible.
After all, WWF is just a front sham operation by none other than.... Royal Dutch Shell!

Ghordius's picture

yup - the WWF not defending the King of Spain - even though his hunting is benign - are you now surprised? nice timing, eh?

i-dog's picture

One wonders if he'd still go "hunting" elephants if the elephants were also armed with hand cannons? LOL.

During a previous "hunting expedition" in 2006, this inbred buffoon ... err, sorry, "great white hunter" ... "hunted" a russian bear:

"the hunted animal was a “kind and cheerful bear named Mitrofan,” who had been part of a tourist attraction in the town of Noviens.


According to this version of events, Mitrofan was put in a cage and taken to the hunt, where he was given “vodka mixed with honey.” The king is said to have “taken him down with one shot.”"

Ghordius's picture

ehhhm... wrong.

1. I do not "denounce" the angloamerican elite, I just give reminders (during media storms over foreing elites) about who is really calling the shots.

2. In Spain a lot of people know that he had this accident with a gun that should have been unloaded with the younger brother, over 50 years ago - a Nation usually notices things like a missing Prince.

Did he do anything "psychopatic" since then or is this really significant? Ask any boot camp instructor about this "18 and experience with guns", btw.

3. Freaking Dictator Franco (you know, the nearly best friend of Hitler and Mussolini) chose this House for the Throne of Spain - and it was at the time a Spanish internal political issue, look up Carlism, for example. If there is some "angloamerican placement" theory please explain, it's the first time I read about it. And a constitutional monarch of Spain a "puppet"? Come on, pull the other one.

4. Don't get me started on hunting, it's really a long story. In Botswana, they have too many of them. Elephants can be a pest. The country has a very good protectionist stance, but they have to do something - including making money out of it by pointing foreign men with guns to those animals that have to be culled.

Ahmeexnal's picture

You have to be fucking joking. 

Elephants are a protected species!

I assume the murder of a pretender to the throne in Aspen in 1989 was also an "accident" to you:

Hope you enjoy the collapse of your colonialist, sociopath, racist, monarchist, bankster lilly white fag world.


Ghordius's picture

you don't seem to know much about elephants and natural reserves

perhaps a pro-elephant organisation that is trying to give them more habitat is a bit more believable for you, try - very dedicated to not having elephants face bullets anymore. Here a good primer.

Botswana has either too little land for enough elephants or too many elephants for the land

too high density of elephants = elephants destroy habitat

long story, short end: elephants are culled for environmental reasons: to protect their (small) habitat - hence hunting

Usually the pretender kills the king, not the other way round... What should be ever the reason of a reigning monarch to kill his low-in-the-succession-line cousin? who was btw my cousin-many-times-removed? You lack some motive in your thriller, don't you?


i-dog's picture


"Usually the pretender kills the king, not the other way round"

Not so. Ask the Stuart-Jacobite pretenders (who have failed to kill a king of England in 310 years).

q99x2's picture

How bout Carlos Slim then? Will he do? We're mostly into seeing that sociopaths are classified and delegated to being handcuffed and thrown into the virtual prison within these comments. I think Jaun Carlos, Draghi, Monti qualifies; you can throw a Largarde, a Sarkozy and a Merkel in there too if that will make you feel any better.

francis_sawyer's picture

Are those the 'WHITE' hispanics you're talking about?

Ghordius's picture

if it wasn't so stupid it would be funny - can't give you both up and down arrows

trembo slice's picture

People (naive people) don't think their government could possibly by the entity packing sand in their butts for that extra gritty anal rape.  I feel bad for the people that are just getting absolutely fleeced by this system; whose life-savings is evaporating before their very eyes to prolong this charade for one more day, month, year whatever...

lasvegaspersona's picture


"deserve to get their face torn off."

I believe the correct term, as used in the profession is 'face ripped off'.

I believe it is in the employee manual for all the big banks, look under 'customer service'.

trembo slice's picture

Why do people buy bonds these days?  It literally makes zero sense to buy any sovereign bonds.

SheepDog-One's picture

Seems like they have a gun to their head.

Paul Atreides's picture

Bonds are control, as a bond holder central banks can force a countries government into all kinds of austerity and economic turmoil.

Element's picture

Former retirees who are trying to recoup 2008's 40% loss ... so they can retire once more ...


Aaannnnnnd ... ... it's gone.

trembo slice's picture

Do you have any money in this bank?

Citium's picture

Well that's fantastic. A really smart decision, young man. We can put that check in a money market mutual fund, then we'll re-invest the earnings into foreign currency accounts with compounding interest aaaand it's gone.

mayhem_korner's picture



Does this mean no running of the bulls in Pamplona this summer?

Bam_Man's picture

The bulls will be chased by bears this year.

ThatThatcher's picture

'We'll give you 1% 3y cash but you have to tie some of it up in your own countries' don't and we'll let you to hang out on your own'

I think I need to buy a gun's picture

they need Something to stuff into pension plans.........

vote_libertarian_party's picture

Banks and gvt entities buy them TODAY because if they didn't the whole system would collapse TODAY.  The goal is to put off the collapse.

theTribster's picture

In many countries it is a requiremend that state pensions and other investment types MUST purchase a certain percentage of sovereign bonds - regardless of the situation. Great Britain came out or is coming out with 100 year bonds - nobody would buy those, except for every single pension fund in the country because they are forced to by law. Clearly these activiies should be considered criminal.

This round will see pensions start to disappear as they are converted into worthless gubmint bonds. In the USA those funds represent something like 55 TRILLION dollars, you know they want that money and are working diligently to get it - all of it. They will, both here and in Europe. Its so easy to get upset about this shit, instead I decided to take control of all my assets directly. Fuck 401ks and dissappearing pension funds.

Stop contributing, take the penalty, pay the taxes AND get your money now. If you don't I think you'll be very sorry in the several months. It will be the last resort for the gubmints to push on, getting that money is absolutely KEY to their survival - so be smart and get it while you still can. Do you really think the taxes will be lower for older people when you retire? I think not The combination of inflation and iterative market crashes pretty much guarantee very little growth if any.

I have a strong feeling that scheming to get that money is what they are all about, whether it is through forced conversion to treasury bills or just flat out theft like MF Global that money is at extreme risk.

What a terrible situation our gubmint has put us in? Stealing our future and giving it to the banksters! They will pay in the end, history demands it.


ZippyBananaPants's picture

Anyone who bought anything this year thinking the market was going higher is an idiot.

Dr. Engali's picture

That's okay 'm sure they will be money good when the mature   <sarc>

SheepDog-One's picture

Like fine wine...better with favorite is a March 2012 Lafite MD 20/20.

theMAXILOPEZpsycho's picture

Everyone on ZH BS's about drinking lafite, or having cases of it

Personally its all I drink...

Stoploss's picture

The euro mkt has retrenched.

In record time i might add.

midgetrannyporn's picture

don't worry, can't happen in the usa. [/sarcasm]

SheepDog-One's picture

Dont worry, previous article clearly states we have nothing to worry about at all until 2022.

Of course no one saw 2008 collapse coming, but nevermind all that theyve got it all figured out this time for sure.

Dr. Engali's picture

If anybody believes this will last until 2022 they are nuts.

lasvegaspersona's picture


you must realize the public believes without question that we are in some phase of a business cycle. Politicians behave as though that is true whether they believe it or not. There are undoubtedly some who have a clue that the economy is near collapse but they can't say anything or they will be seen to be as crazy as that Ron Paul guy.

In some aspects of life it is better to go down with the lot rather than try to shout the truth. If you shout truth and it does not happen within a few days you will be labeled as nutso.

Snakeeyes's picture

Spain 10 yr Sov yields break through 6% and housing continues to fall!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1


Dick Darlington's picture

Look at the data from Bank of Spain on Spanish gubbmint debt from the link below. On the left hand side of the page You see general gubbmint debt according to "Financial accounts of Spanish economy" and on the right hand side You see the same debt according to EDP (excessive deficit procedure) aka Eurostat criteria. On Q3 2011 the difference between these two statistics was a whopping 172+ billion euros!!!


As a percentage of GDP terms the "official" ratio was 66% at the end of Q3 2011 while the "closer to truth ratio" was 82,2%. Small difference of 16,2 %-points.

mayhem_korner's picture



Farewell and adieu to ya dear Spanish bondies,

Farewell and adieu dear bondies of Spain.

For we've received our orders, we're to sail back to Boston...

(Quint, Jaws)

Out9922's picture

So what.  American Idol is on

slaughterer's picture

It is rumored that what little volume today on the Spanish 10 year was just JPM and the ECB playing ping pong. 

Mr Lennon Hendrix's picture

The ECB bought them, so they ECB is underwater.  Nothing like having the lender of last resort underwater, just ask us Americans.

dumpster's picture

 those who jumped in water with 100 lb lead weights on feet are also underwater

oh but i repeat myself

Dapper Dan's picture

So if your underwater is that bad? your drowning.

or are you protected from the harmful radiation of the sun?  which is good.

The Bank of Spain confirmed bearish sentiment when it stated that a 'contractionary dynamic' continued into Q1 2012. Therefore, Spain appears to have entered its second recession since 2009. The government of Spain is also expecting GDP to contract by 1.7% in 2012 which would equate to a 5.6% GDP reduction since Q1 2008. The most distressing of all the figures released by Spain is its gigantic unemployment rate of 23.3% - the highest in the euro zone.

Contractionary dynamic indeed!

Gigantic =  gigantesco


Scalaris's picture

Wouldn't that be the Spanish banks who have been depositing the larger portion of the LTRO funds into ECB's Deposit Facility via Banco de España, after Eurozone periphery governments were effectively telling their banks to get their 1% 3-year ECB loans and buy their government debt?

lizzy36's picture

What the whole LTRO thing didn't work out?

Lend money to banks, on the cheap, to get them to load up on their soverign mean incentivizing the exact same behavior that caused the crisis, isn't going to cure it........SHOCKING.