CDS Rerack: What Comes After Bloodbath? Bloodbather?

Tyler Durden's picture

As overnight hopes of global bailouts fade, the reality that the markets are on their own has started to sink in across every asset class but perhaps credit - the life-blood of everything we do economically - is hurting the most. Senior financials are 14bps wider at 317.5bps (record wides), Main is 11bps wider at 209bps, and XOver 36bps wider at 880bps. Yesterday saw sovereign selling focused in the majors but today it has spilled over into everyone else as commodity producers have maintained their relationship with oil and have snapped wider.

IG is notably cheap (wide) of its fair-value and at the same time Seniro Financials are fair - which means that traders are 1) grabbing whatever is cheapest and liquid as a hedge (scramble), and 2) they are grabbing low beta, tight spread names in the index as even lower cost hedges also - so it may pay to look to take advantage of these moves in the higher quality IG names (though catching knives is never fun). Senior Fins are outperforming their index for now which looks more of a function of liquidity than anything else as Sub financials are 30bps wider at 570bps.

While SovX is 'only' 11bps wider at 368bps, CEEMEA is 41bps wider at 390bps overtaking SovX for the first time since June back to its more 'normal' position cheap to Western Europe.

US credit is a little less frantic but nevertheless notably wider with IG +2.5bps at 147.5bps and HY16 at 755 +23bps - while 3Y HY is popping more at 616bps +28bps as the front-end steepness continues to be sucked away as jump risk re-looms its ugly head.

US financials are all notably wider (and flatter) along with insurers who continue to bleed wider with HY. It does appear some discrimination is starting in Europe though as Barclays holds a lonely green line.


Charts: Bloomberg

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??'s picture

This is a must watch - Terrence Keeley of BlackRock

spiral_eyes's picture

CDS is financial cannibalism. It's like letting people take out fire insurance on each others houses. It leads to arson.

Steroid's picture

No, arsonists lead to arson.

Mauibrad's picture

Where's the CDS on the U.S.?

spankthebernank's picture

What...a magic-fucking-wand??  Problems fixed over the weekend??  That fucking pole smoker is a shill among shills.

LawsofPhysics's picture

More useless words from financial shills.  Yeah, that will fix it.

snowball777's picture

What a shifty-eyed 'mo. Fuck BlackRock with their AUM.

He_Who Carried The Sun's picture

He is not sure of himself, that's clear.
This market does not need any "consoling statements" it will soon need some obituary, if they can't get their act together. Merkel said: "there is no one-stroke-solution to this crisis" and that is what we will get: volatility!

GeneMarchbanks's picture

CDS market is now the official pressure gauge of sovereign stress. Forget bond markets.

ZeroPower's picture

While SovX is 'only' 11bps wider at 368bps, CEEMEA is 41bps wider at 390bps overtaking SovX for the first time since June back to its more 'normal' position cheap to Western Europe.


Was watching this all summer - quite strange to see CEEMEA be considered riskier than such strong powerful nations found in WE... except the WE SovX has basically all the PIIGS countries CDS if i recall the weights.

As we see now however, EM is not getting spared one bit... as per currency declines in EM as well as the eventual run-up in CDS spreads.

janus's picture

do think the barclay's anomoly is more an anticipation of the 'priced in' qe that BOE promised in october?

and what might that say about the pound? maybe a clear positive...seems like it.

Mutatto's picture

We should have believed Sarkozy/Merkel! They promised us Greece would never leave the EU. Now we have to watch tiny 2% Greece drag the whole bankrupt continent down the drain behind them!

AAARRRGGGGGG! Why didn't we just believe them?!?!?!?

This is so strange. I'm horrified, but I can't look away! It has some kind of power over me.

....pass the popcorn please.

Wakanda's picture




Blood on the Tracks

Shitters_Full's picture

Top floor!  Men's Wear, Market Crashes, General Pandemonium!

JOYFUL's picture

USD/EUR  = bodas de sangre ...Federico Garcia Lorca

as adapted by Edgar Allan Poe. Blood Wedding...not letting...

beyond scary. maybe scarify ...time to make oneself scarce.



I Got Worms's picture

Obama and Rahm's preferred nomenclature: Bloodbathhouse.

LawsofPhysics's picture

Bloodbath in a silver and gold tub.

PY-129-20's picture

Not only blood in the streets, also the smell of sulphur in the morning.

Katla: Earthquake activity continues, a strong sulphur smell could be noticed around the Múlakvísl river this morning. There was also an usual earthquake at the Skagafjörður rift zone. There are a lot of swarm quakes lately - small magnitude so far. Still there is some excitement in the volcano community about this. To witness so many in such a short time - as if something was brewing. Maybe another black swan...


the not so mighty maximiza's picture

We will see monday , tuesday my friend

snowball777's picture

Nah, they'll grab one of their underlings (or 30,000 of them) and throw them out the 6th floor window instead.

Jendrzejczyk's picture

Breaking windows is good for the economy, right?

HedgeFun's picture

Maybe Buffett's eyesight is going and he has been looking at the BAC CDS uptrend rather than the stock price.  Next buy for Berkshire = MS?

janus's picture

OH SNAP!  I hope i'm the first to post this clip.


here it is, lads/

the moment you've all been waiting for/

plenty for everybody/

that's smell the glove?/

...i think it looks like death/

so black, how much more blacker could this be?


NONE MORE BLACK, bitchez!,


augie's picture

I have an unhealthy obsession with Elizabeth Bathory. If i could sleep with one chick from the 16th century, it would be her.

Mitzibitzi's picture

Are you crazy? Those ain't her nails you're feeling in your back! ;-}

pantheo's picture

Cramer says BedBath&BeyondBloodBath is a good choice right now.....buhahahhahahaha

ivars's picture

Silver is perfoming as predicted here on March 24th chart, down again after short blip. Oscillating:


As is gold as in this May 4th prediction chart-down from the bubble peak:


DosZap's picture

ivars, @ 09:01

Great calls sir!!!.

Will add/reload,on Gold of it gets into the $1,450 range for  sure.


Quadlet's picture

"Many traders and investors in many markets are scared."

LawsofPhysics's picture

I have always wondered what it would look like when excessive debt and usury finally chokes off all productive capital.  Although I was hoping that I wouldn't actually see it during my lifetime.  Oh well, let the system crash.  The sooner we do, the sooner compensation finds it way back to folks who are actually worth a shit.

AvoidingTaxation's picture

Someone knows how much is the CDS for Switzerland? Thanks