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CDS Rerack Or How Deus Ex Machina --> Flop Ex Machina
It took about 2 hours for our prediction of the conversion from Deus Ex to Flop Ex Machine to come true. Here are the latest Eurosov 5 Yr CDS, all whooshing wider in tandem.
- ITALY 507/527 +17
- SPAIN 397/417 +22
- PORTUGAL 1070/1110 0
- IRELAND 690/730 0
- GREECE 68.5/71.5 0
- BELGIUM 307/327 +2
- FRANCE 216/226 0
- AUSTRIA 187/197 0
- UK 96/102 +2.5
- GERMANY 103/108 +0.5
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Circus open!
This market is esquizofrenic.
Lets call Dr. Freud.
You taught me a new word! I never have that problem when on the CNBC site.
Perhaps in addition to calling Dr. Freud, we should also call Dr. Suess. He's bound to make some sense of this.
deprimospastic, eskimoeuphoric, dystopioallergic, rollercoasterfrenic, bungabungagroovic...
The sign of the times is in the rhyme. Have one on me-for tha road, its xmas round the corna.
or "The Road" around the xmas?
"esquizofrenic" LOL
no, it's an illusionary market - the equivalent of pig's lipstick for bank balance sheets
and it's a market with only a few market makers, anyway - one happy day in the future it will be laughed at at EconFrauds 101 courses
BAN CDS (again)
thats just the flip of the carry trade - if you going into sovs, might as well have cover
just two words: "voluntary participation"
your avatar is showing the way to...VP!
This is where the macro and the technicals seem to indicate the market is:
http://i41.tinypic.com/21o8wt2.jpg
which hasn't happened yet........ i wonder why
German triple digits here to stay?
Why buy sovereign debt when your euro is about to lose 25% of its value?
Then you can sell more airbus planes to arabs, brazil n chindia! So your commercial balance improves. And your money regrooves. That's the theory...
the third column : somebody doesn't know how to subtract if that is difference. Just saying.
More to the point : what does that third column mean?
it's not
Ok, so its incremental CDS spread corresponding to swing...TY.
Well then, I feel like singing:
I whoosh you a Merry Christmas
I whoosh you a Merry Christmas
I whoosh you a Merry Christmas
...and a Happy New Year.
on a side note:
Kyle Bass says COMEX can’t deliverAt some point in the near future, those few patrons in the know will quietly put down their drinks and saunter to the nearest exit, while the multitude will continue partying, unaware of the growing conflagration that is about to reach flash over.
Santa Claus has left the building!!
Great numbers are avaiiable whenever it is appropriate. What numbers do you want, which one you like, which one you need.
We can produce any results asked for.
How comes, that there are still idiots in this world looking at numbers presented by the greatest con men ever have lived on earth.
It´s unbelievable.
I still don't understand why, given the UK's debt to GDP ratio is so high, UK CDS are priced relatively low.
future debt to gdp currently forecast to go lower, negative real interest rate on existng debt... markets believe in sustainability
Italy: 6.5% int - 5% inf = +1.5% real int - growth (-1% to +1%.. depending on who you believe ) = Growing DEBT to GDP ratio = unsustainable fundamentals, whichever way you look at it
http://www.bloomberg.com/news/2011-10-06/bank-of-england-reactivates-bond-buying-program-to-stimulate-u-k-economy.html
aHH bs YOUR POSITION ON MADE THE CALL ON THIS SITE yesterday that you could always short at the close of a day such as yestarday with such a big gap up and ramping up all day that the europeans would take profits on it. what drives me batty is how the sand p 500 drove up all day past down dtrend, so you hit your stop losses and today it's down. that is what drive3s me insane about the system. they clearly know exactly how far to drive this to have the shorts covered, but of course that isn't manipulation
thought I had enough slack so things wouldn't close out, but I didn't of course clsed almost axactly at the end of the day. makes me so mad
Are those Greek numbers correct?
points up-front. so its b/a x NN + fixed coupon p/a.
Santa is deflating like my neighbor's crappy yard ornament.
I don't think 3 pips you can say is "whooshing". LOL
So this is the day virtually the system ends. Nothing can save them now.
Well there's a new Earth-sized planet just been discovered...
I've said this before, but I really think people need to be careful using CDS to evaluate credit risk.
CDS may tell you who the locusts are lining up to attack... but it means little else.
Does this mean that I think that the latest 4 letter savior program will work? No. However, I'm certainly not going to read too much into CDS spreads.
What DO I believe? I dunno. On the one hand the LTRO is clearly another can kicking.
On the other hand, IF the ECB doesn't sterilize this then LTRO is actually ECB QE. QE is what the market has been having temper tantrums asking for over the last year or so... thus if the ECB doesn't sterilize then it may buy a significant amount of time for the EU and Euro.
I tihnk it depends on whether or not ECB sterilizes.
Lastly: to many of these banks it doesn't matter if the Euro falls 25% at least not in relation to this program, since they are borrowing in Euros and paying off in Euros. All that matters is the differential. Thus being able to borrow at 1% and lend out at 5% is a boon no matter how you look at it, even though it isn't enough to fix the problem, it's enough for the big bankers to extract their bonuses.
Ah there's that word coming to mind again...pathetic. As you've said a number of times Tyler, the half-life on these seems to decrease on each occasion.
DavidC
how much of that refinancing money provided by ECB to over 500 banks will be used to play carry trade games?
with a few billion euro they can probably keep it afloat for another few weeks, rape shorts, play ping-pong...
So, the new paradigm is about knowing when a bond is going to land on it's face in the manure, right? I'm asking because I might have to tell people to stop pretending about "investing". For as long as I can remember, i've heard horse players call their activities "investing".
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
if LTRO recipients are doing the "Sarkozy" and buying up Sov debt with their new free money they would presumably be trying to hedge, bidding up CDS spreads. no?
who are we kidding here. The euro is definitely going to collapse.