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Greek 1 Year Bond Yield: 111.7%

Tyler Durden's picture





 


In the chart below, for all intents and purposes, green means red. Also, the probability of Greek default according to at least one data service is a little over 100%.

 


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Mon, 09/12/2011 - 07:43 | Link to Comment bania
bania's picture

2x my money in 1 year? I'm in!

Mon, 09/12/2011 - 07:45 | Link to Comment Sudden Debt
Sudden Debt's picture

what would cramer do...?....

Mon, 09/12/2011 - 07:47 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

"what would cramer do...?...."

Put a buy reccommendation on all piigs paper... especially that returning over 100%... What could possibly go wrong?

Mon, 09/12/2011 - 07:48 | Link to Comment bania
bania's picture

he'd talk to brian boitano

Mon, 09/12/2011 - 08:57 | Link to Comment MFL8240
MFL8240's picture

Strong buy!

Mon, 09/12/2011 - 10:50 | Link to Comment markmotive
markmotive's picture

To paraphrase Homer, the two greatest words in the world are Dee Fault.

Dee Fault, Dee Fault, Dee Fault!

Mon, 09/12/2011 - 08:09 | Link to Comment GoldBricker
GoldBricker's picture

Securitize the expected revenue and sell shares in the market. Buy a AAA rating and a plug on the financial telemarketing channel. Take the proceeds (minus a big bonus for you) and repeat until you're too big to fail.

Mon, 09/12/2011 - 08:30 | Link to Comment tmosley
tmosley's picture

Buying physical silver, are we?

That stuff doesn't default.

Mon, 09/12/2011 - 09:20 | Link to Comment how to trade ar...
how to trade armageddon's picture

You could have doubled your money already shorting this crap. But go ahead, go long. We need somebody on the other side of the trade.

Mon, 09/12/2011 - 07:43 | Link to Comment Tense INDIAN
Tense INDIAN's picture

default now assholes

Mon, 09/12/2011 - 07:44 | Link to Comment bania
bania's picture

btw... first!

Mon, 09/12/2011 - 07:44 | Link to Comment Silverhog
Silverhog's picture

Good as Gold...oh wrong chart

Mon, 09/12/2011 - 07:47 | Link to Comment freethinker4now
freethinker4now's picture

Or Gold as good as Greek one year! Go parabolic already!

Mon, 09/12/2011 - 07:45 | Link to Comment Sudden Debt
Sudden Debt's picture

If only it had a AAA rating....

 

Mon, 09/12/2011 - 08:11 | Link to Comment malikai
malikai's picture

Kramer: "Greece will NEVER default! Put your money in Greek bonds! You can't lose! Just look at those Yields!"

Mon, 09/12/2011 - 07:45 | Link to Comment doomandbloom
doomandbloom's picture

Wonder what that Norwegian fund manager is going through at this moment..if he hasnt lept of the building already..

Norway Buys Greek Debt as Sovereign Wealth Fund Sees No Default
http://www.bloomberg.com/news/2010-09-08/norway-buys-greek-debt-as-sover...

Mon, 09/12/2011 - 07:49 | Link to Comment Sudden Debt
Sudden Debt's picture

:)

He's invited at a big BBQ this weekend, his invitation says Dresscode: "Apple in mouth" + bring family.

 

Mon, 09/12/2011 - 07:45 | Link to Comment unky
unky's picture

actually it could go to infinity. It still would not mean a default. Just if you cant pay on maturity. So lets see 4 digits percentage in greek bonds ;- )

Mon, 09/12/2011 - 07:46 | Link to Comment Altan311
Altan311's picture

What did Argentina hit, 120ish % before things blew up? Getting close now...

Mon, 09/12/2011 - 07:46 | Link to Comment Sequitur
Sequitur's picture

"Um, I thought graphs going 'up' means 'good.'" -- Carly Fiorina.

Mon, 09/12/2011 - 07:47 | Link to Comment Cassandra Syndrome
Cassandra Syndrome's picture

Nice return for a year. Where can I buy these yokes?

Mon, 09/12/2011 - 07:47 | Link to Comment Rastadamus
Rastadamus's picture

Sheeeeeeeit! 111%???????

Mon, 09/12/2011 - 07:58 | Link to Comment bmwm395
bmwm395's picture

I gladly give you two hamburgers on Tuesday for a hamburger today.

Mon, 09/12/2011 - 08:11 | Link to Comment GoldBricker
GoldBricker's picture

The problem with that, Wimpy, is that by Tuesday they'll have reduced the burger to half the size it is today.

Mon, 09/12/2011 - 08:00 | Link to Comment ivars
ivars's picture

This February 6th forecast graph was not so bad as well:

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&p=34034#p34034

As was the gold bubble forecast graph made on May 4th:

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&st=0&sk=t&sd=a&sta...

Mon, 09/12/2011 - 09:20 | Link to Comment fiddler_on_the_roof
fiddler_on_the_roof's picture

Kudos to you ivars.
You nailed both Dow and Gold so far. Let us see how it follows thru.

Mon, 09/12/2011 - 08:07 | Link to Comment HoofHearted
HoofHearted's picture

I just figured out the annualized on FAZ from Thursday's 55, where we were buying. Assuming 67 holds, the annualized turns every dollar into...$9 billion. This Greek debt is peanuts compared to FAZ.

The whole banking system is toast. I'll make a lot of fiat, just like everyone else here at ZH, but I think we'd all prefer to be wrong and give our kids a little bit of a chance. Right now everyone is selling gold and silver to meet margin calls. When does this all blow up in true currency crisis and our PMs really take off? Pretty soon in my mind. Weeks, not months. Other opinions???

Mon, 09/12/2011 - 08:08 | Link to Comment ZeroPoint
ZeroPoint's picture

The Greek people should demand the government default. Its more dignified then slowly being run over by a freight train moving at 1 mph.

Time to bury the corpses. Let the fucking recovery begin.

Mon, 09/12/2011 - 08:17 | Link to Comment GoldBricker
GoldBricker's picture

You don't understand. This is not how the game is played. Everyone in Greece knows that default is coming, but if you're one of those who depends on the government in some way (this is most of the adult population), then you want the (borrowed) income stream to continue as long as possible. This is why everyone, from prime minister to retired cabbie, wants to keep those euros coming. The fundamental problem is that the country consumes much more than it produces. They could've had a gradual adjustment but they've chosen to hit the wall instead.

After the default comes, they all know that they won't be able to buy anything, either because they have no money or because it's not worth much. Those will marketable skills will leave. Those will marketable goods or hard currency (parked abroad, natch) will be labeled 'hoarders'.

Mon, 09/12/2011 - 08:43 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

ZeroPoint... beautiful mental picture you paint.

Mon, 09/12/2011 - 08:41 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

"The fundamental problem is that the country consumes much more than it produces."

You don't understand. This is the new Western Economic Model. Only Germany and China are allowed to produce more than they consume.

The West has solved the pesky problem of bankruptcy for banks and soverign nations...

Print more money! and it that doesn't work immediately... Print More Money!

It's so simple I'm amazed someone didn't think of it before... Oh, wait...

Mon, 09/12/2011 - 08:46 | Link to Comment Yamaha
Yamaha's picture

Let uncle Warren buy this away with Obuma....

Mon, 09/12/2011 - 09:26 | Link to Comment how to trade ar...
how to trade armageddon's picture

But wait, there's big big big news:

President Obama to Urge Congress to Pass Jobs Bill

 

Mon, 09/12/2011 - 09:33 | Link to Comment Sgt.Sausage
Sgt.Sausage's picture

Eleventy one is a good number. Where do I buy?

Mon, 09/12/2011 - 10:18 | Link to Comment pmcgoohan
pmcgoohan's picture

This is clearly an outlandish number- but doesn't 111.7% represent a 55.85% probability of a default, not a 111.7% probability?

coin toss  
invest 1  
heads wins me +1 and my stake back  
tails loses me my stake -1  
implied prob of heads 0.5  
  
default  
heads wins me +111.7 plus my stake back  
tails loses me my stake -100  
0.5585 implied prob of tails (default)  

What have I missed?

Mon, 09/12/2011 - 12:36 | Link to Comment mr_sandman
mr_sandman's picture

If you're thinking about it in a single decision binary outcome, you're absolutely right.

 

But if you think about it based upon the buyers at the margins who are determining prices, they believe in a 100% chance of default within a year because of this outrageous situation where they need the coupon to be higher than the principal.

 

Either way, the market is broken--and quantitative probability or risk models are inconsequential to the political reality that Greece is going to default.  All pricing on interest rates is just a bet on what the losses will be.

Mon, 09/12/2011 - 13:45 | Link to Comment mr_sandman
mr_sandman's picture

Another way of thinking about it is that there is an implied subjective bias on your coin because human beings aren't indiscriminate automatons that just throw money (or flip coins) in a market without regard for profit or loss.  The buyer is always trying to gain on the transaction and trying to make the expected return >= 0.  When the probability of one condition needs to be higher than 100% for the expected return to equal 0 (break even), it means that the buyer believes that the probability on the other condition is an exact 0%.

 

I realize the logic might seem a bit backwards but that's what's actually happening here.

Mon, 09/12/2011 - 17:09 | Link to Comment pmcgoohan
pmcgoohan's picture

Thanks for the replies Sandman, that sort of makes sense to me. So when there is >100% probability of a default, the non-default condition effectively ceases to exist and isnt included in any expected return (ie: no one would rationally choose to accept it)

Tue, 09/13/2011 - 22:03 | Link to Comment moxia19
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