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Greek 1 Year Bond Yields Pass 150% For The First Time Ever; Presenting The Hyperbolic Bond Curve

Tyler Durden's picture


Today, all is good in Europe... Except for the festering wound at the center of the contagion of course. It appears someone forgot to tell Greece all is well - it must be that Columbus day holiday or something.


And this is what a hyperbolic bond curve looks like:

Source: Bloomberg


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Mon, 10/10/2011 - 11:52 | 1757697 Mr Lennon Hendrix
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Merkle will buy them....tomorrow.....

Or maybe Wednesday.......

Just give her a minute she wants to make sure she BTFD.

Mon, 10/10/2011 - 11:58 | 1757733 slaughterer
slaughterer's picture

This optimism about the EU is entirely the product of excitement about a small man (Sark and his Napoleon complex) and a small woman (despite physical corpulence): quarter man, quarter woman, the rest hot air, light gas making the market rise, just like the Hindenburg blimp.     

Mon, 10/10/2011 - 12:08 | 1757775 gojam
gojam's picture

Yes, the Hyperbolic Bond Curve mirrors the Hyper-Bollocks rise in markets.

Mon, 10/10/2011 - 13:10 | 1758039 trav7777
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Mon, 10/10/2011 - 12:10 | 1757785 espirit
espirit's picture

Gangrene, bitchez.  Time to amputate the limb.

Mon, 10/10/2011 - 12:11 | 1757791 Mr Lennon Hendrix
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No, the optimism of the EU is, the optimism of the Euro is based on a "flight to safety", like the dollar trade once was, and still is in fits of desperation.

Of course, the real flight to satey is and has been, for the last decade, gold.

All fiat is worth nothing.  People want to play the game of which will last longer?  Fine.  Why?  When you can get P for prices that will NEVER be seen again, I don't know.

Mon, 10/10/2011 - 12:15 | 1757810 Manthong
Manthong's picture

What's the symbol for the European Bond Volatility Index?

Mon, 10/10/2011 - 12:25 | 1757848 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Buy gold

Mon, 10/10/2011 - 11:59 | 1757736 DormRoom
DormRoom's picture

how is Germany going to fund all those Greek pension liabilities.  You take them away, and Greeks will blame zee Germans.

Mon, 10/10/2011 - 12:15 | 1757808 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I am pretty sure either people realize that "unfunded liabilites" means you will not receive something that was an IOU, and you should never have counted on an IOU, because it is an IOU, or civil wars break out all over the globe, from Europe to China to America.

Reality is beautiful if you realize that sitting on a couch all day watching TV is a waste of time, and farming and doing physical labor is way more fun.

Mon, 10/10/2011 - 12:12 | 1757795 MillionDollarBonus_
MillionDollarBonus_'s picture

This is a direct result of the completely irresponsible grand-standing by Slovakian politicians against the European Financial Stability Facility. Eastern European countries like Slovakia are known for being bullies and trouble makers, and I believe it's time for the ECB and other compliant EU states to take the initiative and show that they are not going to be intimidated by far-right extremists and nasty nationalists. I believe it's high time we created a European super-committee which with its OWN constitution, and powers of direct taxation. This fund will be able to carry out large, bold and courageous fiscal operations without constant political ramblings and tedious referendums. This will restore peace, stability and freedom across the region once and for all.

Mon, 10/10/2011 - 12:13 | 1757803 doomz78
doomz78's picture

and allow for more debt...tool.  lol

Mon, 10/10/2011 - 12:16 | 1757813 SheepDog-One
SheepDog-One's picture

I cant wait for this evening! I hope and pray the 1 little guy pulls the rug out! Go Slovakia GO!

Mon, 10/10/2011 - 12:17 | 1757816 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You must be the new Harry Wanger

Mon, 10/10/2011 - 13:05 | 1758017 BurningFuld
BurningFuld's picture

I actually kinda liked that. Give it a 7 out of 10 on the sarcasm scale.

Mon, 10/10/2011 - 16:59 | 1759057 JPM Hater001
JPM Hater001's picture



I'm going to give myself a green arrow for that one. 

Mon, 10/10/2011 - 12:58 | 1757981 covert
covert's picture

raise the interest rates! hold out for more money!


Mon, 10/10/2011 - 11:51 | 1757700 papaswamp
papaswamp's picture

1st time eva bitchez!

So can we call final default shortly...this dragging on is a drag.

Mon, 10/10/2011 - 11:54 | 1757708 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Speaking of drag, does anyone else think Angela Merkle looks like Hitler in drag?

Mon, 10/10/2011 - 11:52 | 1757702 surf0766
surf0766's picture

When does the giant bullshit flag get thrown on any plan coming out of the EU?

Mon, 10/10/2011 - 11:54 | 1757710 Ronaldo
Ronaldo's picture

Apparently, not until it crashes completely.  Human are such optimists after all.

Mon, 10/10/2011 - 12:20 | 1757830 SheepDog-One
SheepDog-One's picture

Grasping at straws in the quicksand pit...not really optimism.

Mon, 10/10/2011 - 11:53 | 1757705 KlausK
KlausK's picture

Heavy, cold & shiny ... I love delivery days.

Mon, 10/10/2011 - 12:02 | 1757754 Linus2011
Linus2011's picture


Mon, 10/10/2011 - 12:08 | 1757781 KenShabby
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A lot easier than traveling down the Amazon looking for El Dorado no?

I love Aguirre Wrath of God.

Mon, 10/10/2011 - 11:54 | 1757706 Shvanztanz
Shvanztanz's picture

Special guest on CNBC, RuPaulson, to offer some commentary on the potential duration of this drag.

Mon, 10/10/2011 - 11:54 | 1757711 doomz78
doomz78's picture

there will be a rumour of a rumour about a strong plan!!!  Maybe a Euro Bond rumour to absorb all of this..  next month of course.  The markets will surge.  Politicians will disagree over the fine details.  The markets will surge.  awesome!

Mon, 10/10/2011 - 11:54 | 1757712 GeneMarchbanks
GeneMarchbanks's picture

Yay! Confetti in the form of Drachmas!

Mon, 10/10/2011 - 11:54 | 1757713 Conman
Conman's picture

She wont actually buy them, she'll just announce that they are planning on the plan to buy them. Good for a 30 handle on the s&p.

Mon, 10/10/2011 - 11:58 | 1757734 GeneMarchbanks
GeneMarchbanks's picture

funny... cause it's true.

Mon, 10/10/2011 - 11:55 | 1757714 Cassandra Syndrome
Cassandra Syndrome's picture

Easy money, bitchez. Who is selling these yokes?

Mon, 10/10/2011 - 11:55 | 1757717 alien-IQ
alien-IQ's picture

Judging by the market reaction, this is the second most bullish news to come out of Europe in the last week. the most bullish was clearly the Italy downgrade since the market has done nothing but go parabolic ever since.

it makes perfect some bizarro universe.

Mon, 10/10/2011 - 11:59 | 1757742 Dick Darlington
Dick Darlington's picture

Add the 2 notch downgrade of Spain on Friday to the list of bullish things from insolvent Europe. And i guess the insolvency itself is bullish too.

Mon, 10/10/2011 - 12:18 | 1757792 HardlyZero
HardlyZero's picture

Not bizzaro at all (heh)... in the time domain...we now won't need to discuss Spanish or Italian downgrades now for another .... few weeks.  Tha's quintillions of machine cycles.

In the meantime its algo Bunga, Bunga !!

Mon, 10/10/2011 - 13:27 | 1758104 RSloane
RSloane's picture

The only thing that would make this market more bullish is widespread starvation in the EU or perhaps a massive earthquake in the heart of Germany.

Mon, 10/10/2011 - 11:57 | 1757725 AndrewJackson
AndrewJackson's picture

Assuming a 30% return on the bonds, the implied haircut would be (2.5-1.3)/2.5 approximately 50%. Unfortunately for the tbtf banks, that # could be very generous.

Mon, 10/10/2011 - 11:58 | 1757735 Tense INDIAN
Tense INDIAN's picture

does it matter...anymore..

Mon, 10/10/2011 - 12:01 | 1757746 LawsofPhysics
LawsofPhysics's picture

My god, simply amazing yield, I am all in,  winning!  < snark >

Mon, 10/10/2011 - 12:01 | 1757747 High Plains Drifter
High Plains Drifter's picture

cnbc keeps saying that gold and silver are not the safe places to be like we thought.........fine......


fuck it, i am selling my gold and silver and buying greek bonds........i love that roi........




former gold bug.......


NOT !!!!!!!!!

Mon, 10/10/2011 - 12:02 | 1757750 dasein211
dasein211's picture

Its not over with dexia. Greece hasnt defaulted but will. The china economy is imploding. Efsf looks near dead and even if it lives is not nearly big enough. Japan is collapsing. The us economy is on life support.
Dont fret the short term.
Long term fundamentals matter most. Always have. Always will.

Mon, 10/10/2011 - 12:03 | 1757758 Everybodys All ...
Everybodys All American's picture

AAA ratings apparently no longer matter. If France and Germany are going to support these banks and bond purchases then they better be willing to pay more in interest. Might want to inform the little guy though.

Mon, 10/10/2011 - 12:04 | 1757763 PivotalTrades
PivotalTrades's picture

The Euro banks will be capitalized to allow the Greeks to default.

Mon, 10/10/2011 - 12:08 | 1757776 pufferfish
pufferfish's picture

>In the gold shop.

>Bought gold.

>Transaction compleated, try to open door.

>Gold lady "Oh, sorry that was still locked. It's like fort knox in here!"

>Me "A bit like fort knox, only, you've acctually got gold."

>Hilariy ensued.

>Gold lady "I'll use that one myself"

Mon, 10/10/2011 - 12:08 | 1757782 SheepDog-One
SheepDog-One's picture

Maggot infested gaping wound at the center of Europe, but the periphery is busy in a massive all-is-well euphoria party!

Mon, 10/10/2011 - 12:15 | 1757809 HardlyZero
HardlyZero's picture

Wall Street -- "the happiest place on earth"TM.

Mon, 10/10/2011 - 12:08 | 1757783 jsavage
jsavage's picture

there is a plan to deal with this

Mon, 10/10/2011 - 12:11 | 1757793 baby_BLYTHE
baby_BLYTHE's picture

All they need to do is reissue the drachma and put gold backing behind it to attracted investors. Reissuing the drachma alone wouldn't be enough, as it would devalue immensely against the Euro. At least with gold behind it, there would be discipline in place to prevent a violent decline

Mon, 10/10/2011 - 12:14 | 1757801 SheepDog-One
SheepDog-One's picture

BLYTHE I think at this point they have to hit absolute rock bottom...and they are speeding towards it...we're dealing with depraved addict self destructive personality disorder types here, psychos.

Mon, 10/10/2011 - 12:19 | 1757826 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Reissue the Drachma and back it with Discotheque free drink coupons.

Mon, 10/10/2011 - 12:20 | 1757832 Marigold
Marigold's picture

Die Kakke ist am dampen

Mon, 10/10/2011 - 12:24 | 1757842 Belarus
Belarus's picture

I don't know, the melt-up makes perfect sense to me. Every country has decided to go with the path of least resistence: to print confetti paper to push up against the trillions in collapsing debt--which will, yes I'm very well aware of, make the ultimate crash that much more spectacular as piling on more debt tp paper over debt problems is hardly a winning strategy. It's the same choice politicians have made through centuries---human behavior dictating that doing "something" is better than doing nothing.

With every single European bank not trusting one another as they hold all deposits at the ECB and FED, and Greece ready to default as they run out of money in the next few weeks, Merkel and Sarkozy know that their entire system is on the verge--so of course they forged an agreement to kick the fucking can. Which means a recap of their banks ensures the EU will print at least a trillion and the market being as shortsighted as it is sees this as bullish. The soveigns are in bad enough shape, wait until they load another trillion on top of the debt dung pile, and see how austerity works in every EU member country in that scenario!

U.S. markets of course rally on this as counter-party risk goes bye-bye and MS and any other TBTF's can clean their balance sheets of any EU debt as they will be able to sell back to the soveigns. 

This market goes into crash mode again once we realize we've go an unfunded defict hole in the great USA as there is no way to plug it: yields rising, stocks climbing, and not enough money around the world to fund our deficits means iat goes well until it doesn't, which is when our Treasury will go bidless. And so the printers will only be turned up yet again.....

In other words, it's just gonna be print, print, print and destroy every fiat currency until this fucking game is over. 

Mon, 10/10/2011 - 14:29 | 1758378 Money 4 Nothing
Money 4 Nothing's picture


         May I borrow your above commentary to add to our site? That is one of the best explainations I have read in a long time!


Mon, 10/10/2011 - 12:25 | 1757846 defn8Dog
defn8Dog's picture

Sarmerky hoodoo voodoo and a Cameron bazooka win the day. 

Mon, 10/10/2011 - 12:25 | 1757847 chindit13
chindit13's picture

The Fiat Nazi says “No money for you, Greece”.

Europe has decided the cheapest route is to cover all the losses from Greek debt at the bank level. Banks will be saved at any cost, Greece, not so much. Bag your CDSs, forget they exist, and you will be covered. Damage contained. Riot all you want, Greece; you’ve been made irrelevant. Try not to hurt each other.

Whatever I might have thought, and written, the other day is wrong. Greece is like an aged Eskimo, put on a piece of ice and left to float off into the cold night to die without stinking up the igloo.

Mon, 10/10/2011 - 12:34 | 1757875 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Eskimos choose when they leave their family.  Their family does not just send them off unwilling. 

Mon, 10/10/2011 - 13:21 | 1758079 chindit13
chindit13's picture

For Chrissakes I'm making an analogy.

A heartfelt apology to all the Eskimoes on Zerohedge.

Goddam political correctness.

Mon, 10/10/2011 - 13:30 | 1758101 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Like I care about PR; I was pointing out that your analogy sucked.  If Greece chose to leave the Euro Zone, then your analogy would make sense. 

Mon, 10/10/2011 - 13:30 | 1758113 RSloane
RSloane's picture

Srsly. You wounded thousands. Bully!

Mon, 10/10/2011 - 15:17 | 1758631 kaiserhoff
kaiserhoff's picture

The PC term is INUIT.  Now ask me if I give a shit;)

Mon, 10/10/2011 - 14:54 | 1758482 Big Ben
Big Ben's picture

Greece is just the tip of the iceberg. (Sorry for the mixed metaphor). The real danger is from Spain and Italy. Will Germany also pay to recapitalize Spanish and Italian banks? Or are France and Germany just planning a way to bail out their own banks and let the weaker countries sink or swim on their own?

Merkel has made comments that Eurobonds are absolutely the wrong way to go. Beyond bailing out Greece (for tactical reasons and because it is small), I haven't heard anything that suggests that the Germans are willing to do anything for Italy and Spain.

Perhaps a better analogy might be the Titanic. When it sank a lot of lifeboats were lowered that were only partially full. After it went down, the people in the lifeboats could hear the screams of other passengers in the freezing water. But very few of the lifeboats went back to pick up people in the water for fear of being overturned by masses of desperate freezing people.

Mon, 10/10/2011 - 12:35 | 1757877 rambler6421
rambler6421's picture

Money printing bitchez!

Mon, 10/10/2011 - 12:42 | 1757905 Comrade de Chaos
Comrade de Chaos's picture

Damn speculators. (sarc.)

Mon, 10/10/2011 - 13:20 | 1758072 Money 4 Nothing
Money 4 Nothing's picture

It's thoses damn ZH bloggers again!

Mon, 10/10/2011 - 12:47 | 1757933 freethinker4now
freethinker4now's picture

Someones please wake me up when this is ready, I'm jolly well tired of this never ending story

Mon, 10/10/2011 - 12:48 | 1757942 DavosSherman
DavosSherman's picture

What could possibley go wrong?

Mon, 10/10/2011 - 13:57 | 1758251 Zola
Zola's picture

What is amusing is the back and forth of money between stocks and bonds... no escape hehe ... both destined to go lower ! that is unless you actually focus on the real safe havens

Mon, 10/10/2011 - 17:01 | 1759066 jm
jm's picture

30Y looks cheap to the curve. 


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