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"English Law; Negative Pledge" - How To Hedge A Spanish Bond Short

Tyler Durden's picture


Now that the Spanish bond market has realized it has just been primed by senrio debt, the next steps are straight from our Subordination 101 walkthru. Which means sell Spanish local low bonds, go long English-law, preferably, those with a negative pledge. Of course, the presence of a negative pledge is precisely the loophole that will allow Finland, and soon others, to demand a security interest in the event of priming (such as an ESM-sourced loan) which at last check, is precisely what they are doing assuming the EFSF is used to temporarily source the loan until the ESM takes over. So here is a good example of a bond, courtesy of the Generalitat de Catalunya Euro Medium Term Note Programme, that one should hedge a general basket of local-law Spanish bond shorts.

Source: Generalitat de Catalunya (Government of Catalonia) EUR 9,000,000,000 Euro Medium Term Note Programme

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Mon, 06/11/2012 - 08:41 | 2513974 insanelysane
insanelysane's picture

Rinse and Repeat with Italian bonds as well. NEXT!

Mon, 06/11/2012 - 09:10 | 2514037 mayhem_korner
mayhem_korner's picture




Mon, 06/11/2012 - 09:17 | 2514072 Tiago
Tiago's picture

Contagion, les amis !

La zone euro, c'est une maladie bien contagieuse.

Mon, 06/11/2012 - 08:45 | 2513983 fonzannoon
fonzannoon's picture

I went to a casino in Pittsburgh hammered at 2am. It was pretty empty and I sat down at a roulette table and made a bet. The dealer spun the wheel abd it barely did a rotation and ended up on black (I had red). I said "what the fk was that?" The dealer looked bored and said "whatever you lose". I got up and left. This whole thing feels like that.

Mon, 06/11/2012 - 08:57 | 2514011 falak pema
falak pema's picture

so it cured u of Pittsburg and its casino, but did it cure you of ALL casinos at large; that is the real moral of the story! 

The day we leave the casino economy by voting out the cabal, we can start cleaning out the shills and the funny dollar bills in one fell sweep.

Mon, 06/11/2012 - 09:04 | 2514031 AnAnonymous
AnAnonymous's picture

Nope because in other casinos, the dealers are US citizens, honest, german bred and all...

Mon, 06/11/2012 - 09:21 | 2514089 magpie
magpie's picture

Hey AnAnonymous, how do you like my business proposition: Crisis torn Europe would sure dig into a Dummies Guide to US citizenism. 

Just think of the translation rights etc. 

Mon, 06/11/2012 - 10:10 | 2514276 Lebensphilosoph
Lebensphilosoph's picture

In Communist China, state runs you.

Mon, 06/11/2012 - 08:51 | 2513993 Ted Baker
Ted Baker's picture



Mon, 06/11/2012 - 08:58 | 2514012 fonzannoon
fonzannoon's picture

where is that gold stored Ted?

Mon, 06/11/2012 - 08:53 | 2513995 crawl
crawl's picture

Didn't the holders of Greek English law bonds get paid full face value when local law bond holders watched their bond value dwindle to about 15 cents of face value?

Thanks for the info.

Mon, 06/11/2012 - 09:05 | 2514030 falak pema
falak pema's picture

english law is for protecting the Oligarchs; Greek law is for sheeple to be sheered. There is a difference. The one is to defend the predator, the other is to offend the victim; they are totally complementary. 

Now you know how the world Oligarchy works in pratical terms. Be a predator in Greece and when you risk to be fleeced as foreign sheeple by the local mafia,  go international Oligarch and buy an English insurance policy. Now you are truly global and even the ZH crowd will applaud your savvy. Money is your God until it goes funny in your hands like fleeting sand.  

Mon, 06/11/2012 - 10:19 | 2514303 slewie the pi-rat
slewie the pi-rat's picture


your core idea is dressed to kill, but is worth a more nudie peek?

the laws;  the different sets/layers of rules;  now, situational ethics and triage has been incorporated into the spectre of spectral laws which change depending on what color somebody feels is appropriate for TPTB that day?

plus the defintion of law itself: law is what is enforced as law

so is our fledgling little zeroHedge ww.speech indicating a ww.legalProblem?

i think so

we can see what the NW0 is up to;  what might be a more reasonable approach than another layer of boilerplate on another 000 worth of debt?  b/c i think that is what we are looking to get if we don't start  thinking more simply, soon about these debt loads and following the money

obviously we need to start a ww.peoples'BANK!  and make some fuking rules of our own!

  • first:  it will be a slush fund for the worthless shit that is clogging up the rothschild arteries and putrifying the cBs' besotted livers
  • second:  you've heard of bigBrother?  this will be bigBiCheZ'BadBank
  • third: it will be a pure ponzi;  they will give us the shit and we will issue them a thanks4zero one-finger salute
  • fourth:  we'll issue gold&silver PM coins with avatars!  and rules that they are legal tender and can't be taxed or stopped from moving freely anywhere a zeroHead goes, anytime (wow, what fun!)
  • fifth:  near-free minting for your bullion

for example, in the US, we will start by taking fanny and freddie and shirley and squirley and the FDIC off the asswipes' books

then, well stop the fuking payments and use the income saved to buy up the shit that we're defaulting on!

nothing to it, but to do it!

Mon, 06/11/2012 - 08:54 | 2514001 XtraBullish
XtraBullish's picture

I went to a casino in Niagara Falls and decided to drink five double vodkas; went to the crap table and bet the Don't Pass for two hours while all the suckers crapped out and made $5,000 betting WITH THE HOUSE. Always bet with those that control the lawcourts.

Mon, 06/11/2012 - 08:54 | 2514004 asteroids
asteroids's picture

If the banks were smart, they would cram this through overnight. The longer this drags out, the more time the "evil" hedge funds will have to take positions. Of course, this deal could destroy the bond market for a long time for everyone. This "deal" could start interest rates rising and once it starts the Central Bankers will have a really hard time stopping it.

Mon, 06/11/2012 - 08:58 | 2514017 francis_sawyer
francis_sawyer's picture

short, sweet & to the point... Thanks Tyler(s)...

Mon, 06/11/2012 - 09:04 | 2514028 mayhem_korner
mayhem_korner's picture



So EuroDisney just printed Fast Passes for its new ride, Collateral Damage

Mon, 06/11/2012 - 09:16 | 2514066 francis_sawyer
francis_sawyer's picture

 "Law don't go around here LAWDOG"



Mon, 06/11/2012 - 09:38 | 2514143 slewie the pi-rat
slewie the pi-rat's picture

catalonian bonds, BiCheZ!


tyler, this is fast & furious but you are doin it right, imo;  if i ever get any money, i will buy a hat;  i promise

Mon, 06/11/2012 - 10:53 | 2514569 Grand Supercycle
Grand Supercycle's picture

Rally Warning from last week:

'Daily chart now gives bullish warning and significant
SPX rally & USDX retracement should commence in a week or so'


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