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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 | 1658905 bania
bania's picture

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

Mon, 09/12/2011 - 07:45 | 1658917 Sudden Debt
Sudden Debt's picture

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

Mon, 09/12/2011 - 07:47 | 1658928 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 | 1658932 bania
bania's picture

he'd talk to brian boitano

Mon, 09/12/2011 - 08:57 | 1659129 MFL8240
MFL8240's picture

Strong buy!

Mon, 09/12/2011 - 10:50 | 1659542 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 | 1659013 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 | 1659062 tmosley
tmosley's picture

Buying physical silver, are we?

That stuff doesn't default.

Mon, 09/12/2011 - 09:20 | 1659219 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 | 1658906 Tense INDIAN
Tense INDIAN's picture

default now assholes

Mon, 09/12/2011 - 07:44 | 1658910 bania
bania's picture

btw... first!

Mon, 09/12/2011 - 07:44 | 1658909 Silverhog
Silverhog's picture

Good as Gold...oh wrong chart

Mon, 09/12/2011 - 07:47 | 1658924 freethinker4now
freethinker4now's picture

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

Mon, 09/12/2011 - 07:45 | 1658911 Sudden Debt
Sudden Debt's picture

If only it had a AAA rating....

 

Mon, 09/12/2011 - 08:11 | 1659020 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 | 1658913 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 | 1658937 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 | 1658914 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 | 1658918 Altan311
Altan311's picture

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

Mon, 09/12/2011 - 07:46 | 1658921 Sequitur
Sequitur's picture

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

Mon, 09/12/2011 - 07:47 | 1658925 Cassandra Syndrome
Cassandra Syndrome's picture

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

Mon, 09/12/2011 - 07:47 | 1658926 Rastadamus
Rastadamus's picture

Sheeeeeeeit! 111%???????

Mon, 09/12/2011 - 07:58 | 1658968 bmwm395
bmwm395's picture

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

Mon, 09/12/2011 - 08:11 | 1659022 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 | 1658982 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 | 1659216 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 | 1659007 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 | 1659008 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 | 1659032 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 | 1659084 Snidley Whipsnae
Snidley Whipsnae's picture

ZeroPoint... beautiful mental picture you paint.

Mon, 09/12/2011 - 08:41 | 1659079 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 | 1659093 Yamaha
Yamaha's picture

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

Mon, 09/12/2011 - 09:26 | 1659251 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 | 1659276 Sgt.Sausage
Sgt.Sausage's picture

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

Mon, 09/12/2011 - 10:18 | 1659415 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 | 1659975 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 | 1660107 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 | 1661361 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 | 1665999 moxia19
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