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CDS Rerack: All Red On (Negative) Roll Day
Judging by the futures one may be forgiven to assume that sovereign default risk in Europe has moderated today. One would also be 100% wrong. It's contract roll day and Italy downgrade day (first of many: Moody's on deck) not to mention algo ES futures ramp up ignore day, and as a result everything is wider across the board, and Italy 5 Year hit 520 earlier, a new all time record.
- ITALY 502/510 +16
- SPAIN 405/415 +5
- PORTUGAL 1120/1170 +55
- IRELAND 790/830 +10
- GREECE 56/60 +1
- BELGIUM 267/277 +3
- FRANCE 184/187 +6.5
- AUSTRIA 143/149 +4
- UK 82/85 +1
And with half of Europe inverted, it is no surprise that many of the rolls are in fact negative.
- ITALY .5/1.5
- SPAIN 1/2
- PORTUGAL -24/-14
- IRELAND -20/-10
- GREECE 0/.5 (PTS)
- BELGIUM 2/3
- FRANCE 3.5/4
- AUSTRIA 3.25/3.75
- UK 3.25/3.75
- GERMANY 2? /3?
Perhaps most notably, the new series 17 IG and series 16 Main are trading notably wider than their fair-values in early trading - suggesting the desire to roll shorts/hedges is stronger than the ES ramp would suggest:
- IG17 133.75 vs 132.25bps fair-value
- Main16 126 vs 124.75bps fair-value
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So China cuts the money to big banks in Europe and CDS only go up a few percents? Total bs.
Hey but Greeenspan is attending the FOMC meeting.
Two Fed Chairmens must be better than one....right.
BOOYAH.
Lets get Volker in there for the trifecta.
lol.....unfortunately, Paul would probably have a stroke/heart atack with those 2 idiots in the room
Throw in a few nobel lauriets for good measure, just like LTCM
Hey but Greeenspan is attending the FOMC meeting.
New print-o-matic 5T requires two to assemble.
And 300 million to screw.
I certainly hope we receive some clarity from Ben S. regarding, specifically, WHICH "Twist" he and his board will be implementing.
The standard "Twist" is rather tired -- hell, everyone knows this one. I would suggest that this "Twist" has already been discounted by the market.
http://youtu.be/yqVFJNcQ4X0
Now, if Ben truly wants to shake up the house and get this economy moving and grooving in some blue suede shoes, this is the plan, my man. Joey Dee & the Starliters are good for at least 100 bips in GDP.
http://youtu.be/7WIvZu4dPQQ
What a joke the markets have become as algos move markets based upon how big the insider hominids think the next crack pellet be...
Let the bulls run through the E.U. already and then let all the BRICs cleanup the bullshit.
the CDS can keep on going higher ...when does the point come whn it really triggers something??
CDS being expensive triggers nothing. It just means it costs more to buy CDS.
If Greece defaults in such a way that the CDS get triggered then those who own CDS get money rained down upon themselves.
Except most likely those who are supposed to pay them can't pay them.
And the people that sold the CDS get shafted.
If that's enough to detonate the company that sold them then any CDS taken out on them gets activated. If that's enough to detonate the company that sold them then any CDS taken out on them gets activated. If that's enough to detonate the company that sold them then any CDS taken out on them gets activated. If that's enough to detonate the company that sold them then any CDS taken out on them gets activated. If that's enough to detonate the company that sold them then any CDS taken out on them gets activated....ad infinitum.
Ignore those ugly facts behind the curtain. I am the mighty OZ.
This really is confetti. The surprise of course is that we're not getting the intended inflation. Instead we have sovereign defaults and homeless firemen, policemen, etc. "must have bubbles" theology is leading to a total annihilation of the EU. Obviously you can never re-create the last bubble so the best that can be said is "This time is a New Bubble." Apple obviously is the poster child. Once that thing goes to zero then I guess "it's the end game to America" as well. Total insanity.
One can arb the roll - few bp here and there, just dont get stuck with a now OTR issue
This euro-centric doom is boring me. When is the North American doom coming?
I want benefits cut, I want strikes everywhere. I want protests everywhere. I want pissed off people punching their congress critters... I want some action.
The surprising thing is that anyone is still paying for CDS when interpretation of the 'default' event seems to lie with the sellers of CDS. The big bank sellers of derivatives are in the back rooms pulling political strings and will make sure that printing, or redefining terms, will mean that CDS never pay.
Did anyone see Doug Noland's piece this weekend, musing about the 'value' of financial market insurance products. Suspect, to say the least, just another tool for fleecing suckers. At least in this case they would be 'sophisticated' hedge fund suckers, but in the end we all know financial losses and activities are funded by the productive general population one way or another.
Serious woody by Mr. Goldie today
Serious woody by Mr. Goldie today