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Here Is Who The Next Bottleneck In The Euro Bailout Will Be...
From Peter Tchir of TF Market Advisors
The Markets Are Off To A Good Start Today For A Change...
S&P futures have already bounced 2% from their overnight lows (1148 -> 1172). Europe didn't even have the decency to wait until the US woke up to rally. The markets are better, but still broken.
Across the board credit is doing better. Main is back to 183 and 7 tighter on the day. XOVER is back to 750, 20 tighter on the day and almost 70 tighter from YESTERDAY's wide levels of 818.
Even bonds are doing slightly better, but are not showing the same signs of a squeeze that we are seeing in the credit indices. Italian 10 year yields are 7 better on the day, back to 5.62%, but that is still almost 40 bps higher than it was a week ago.
The outperformance of the the CDX indices, or hedge products, indicates that this is a short squeeze and a rush to put risk back on. The "basis" for the indices is also showing an extreme level of bullishness in the indices relative to the underlying markets. IG16 is trading at least 5 rich to fair value, and Main may be trading more than 10 bps rich. So indices are outperforming single name CDS which is outperforming bonds.
I would be careful going long credit for a trade through the indices. That amount of out-performance is almost impossible to sustain and I would expect single names to snap tighter or indices to gap wider fairly soon. I would avoid playing the long end by buying bonds, although they are the cheapest, and theoretically have the biggest upside potential, they have too wide of a bid/offer and if the crisis isn't resolved (and it isn't yet) it will be hard to get out of bond positions. There is almost pent up demand from issuers, so sourcing bonds through the new issue process is a better bet. At least you know the bonds will come with a big concession and the underwriters will be short bonds and have a bid for them, for at least a few days.
HY has done very well. It has started to outperform. HY16 is up to 93 from 90 the other day. The risk/reward is still okay in this, but unlike earlier this week where I was positive on HY vs other assets, I'm now neutral. I would be selling out of HYG and JNK as they never really caught up to CDS and have already priced in more strength to the underlying bond market than there really is.
Europe must be hoping that the Dutch aren't sensitive people. We are all waiting for the outcome of a conference call between Germany, France and Greece. Holland isn't on the call, yet they are the 3rd largest AAA country in Europe and are responsible for 10% of EFSF's AAA rating. Germany has taken the time to mention Finland's demand for collateral. Finland is only 3% of the AAA portion of EFSF, but everyone is paying attention to them, yet Holland seems to be taken for granted. Holland has their own problem bank, ING, and came out yesterday with a statement that the Dutch government considers a Greek default as unavoidable. Today the Ministry is saying they are making all possible efforts, but didn't say that they still think the efforts will fail and a default is inevitable. Look for the next snag in the bailout to come from growing opposition in Holland. If I was them, I would be annoyed that their invaluable contribution seems to be taken for granted and that no one is reaching out to them in spite of their importance.
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Gold and Silver Behatches
Silver shot up 5% with a paltry $300 million buy on the physical market by Eric Sprott. Imagine what will happen when the paper ponzi schemes start their death spiral and everyone tries to get into tangible assets. There isn't enough silver in the solar system at $32/oz for all the funny money out there.
growing opposition in every euro-bound nation. it's all fucked. europe will do nothing meaningful, china and developing market sovereigns won't step in 'til asset prices are severely depreciated, and by then contagion will have blown out of control.
bernanke might want to bail out every over-leveraged euro bank, but chinese won't take any more print print print.
the world is fucked.
http://azizonomics.com/2011/09/12/will-china-bailout-the-world/
The Dutch need to have some Icelanders come on down to smell the tulips and give some advice.
Yes the world is fucked. All because some Wall St exec wants to buy his wifeo a nice big diamond for Christmas with his fat ass bonus- what a motherfucker.
"Look for the next snag in the bailout to come from growing opposition in Holland."
Growing opposition everywhere. Politicians are way out of touch with people.
Credibility gap widens 57 bps every day
PS First post. ;-)
And what a great post it was.
:)
http://www.birthdayowner.com/wp-content/uploads/2011/06/1st-birthday-cakes-for-girls.jpg
marijuana backed euro in 3....2....1....
The Dutch are not sensitive, but stupid, they take their dutch coffee with them on vacations, sleep in their lame euro-caravans, bring bikes so that they dont waste money on fuel, but when it comes to their government, they have no idea where the money goes.
The Dutch are stingiest people in Europe, even more than Germans, but ONLY when its an item they pay from their own money, when it comes to the government and taxes they complain how expensive it is to live in NL, but never really do anything about it.
The Dutch, you just give them cheap coffee and they forget how much they pay for the unemployed fat greek eating feta and have a view on the blue sea while they back in Holland struggle in a rainy weather to make it to work on time (on an old bike, Chinese peasant style....)
just stupid.....
The Dutch are not sensitive, but stupid, they take their dutch coffee with them on vacations, sleep in their lame euro-caravans, bring bikes so that they dont waste money on fuel, but when it comes to their government, they have no idea where the money goes.
The Dutch are stingiest people in Europe, even more than Germans, but ONLY when its an item they pay from their own money, when it comes to the government and taxes they complain how expensive it is to live in NL, but never really do anything about it.
The Dutch, you just give them cheap coffee and they forget how much they pay for the unemployed fat greek eating feta and have a view on the blue sea while they back in Holland struggle in a rainy weather to make it to work on time (on an old bike, Chinese peasant style....)
just stupid.....
It's the 'veet'.
You should ...try some.
Here's what they were doing when your portfolio was evaporating.
Word of the day: Bottleneck
Brother John on the Perth Mint Bottleneck
I recall a dinner conversation while I was in Edinburgh and the Scottish family I was staying with was offended about being portrayed as exceptionally frugal. They pointed to the Dutch to demonstrate their point.
Going Dutch is a term that indicates that each person participating in a group activity pays for himself or herself, rather than any one person paying for anyone else, particularly in a restaurant bill. It is also called Dutch date and Dutch Treat.
In Finland, Sweden, Denmark, Canada, Norway and Australia, the practice of splitting the bill in restaurants is common.
In south European Countries such as Italy, Portugal, Greece it is rather uncommon for locals to have separate bills, sometimes even regarded rude, especially when in larger groups.
http://en.wikipedia.org/wiki/Going_Dutch
yes, its true
i used to live in Haarlem (the original "white" one in Holland) back in 90s and the stupid dutch actually dont like anyone who is not Dutch, especially from Eastern Europe, but would bow/smile at/submit to etc to the 3rd generation unemployed Moroccan imigrants who dont speak Dutch, only arabic, who sells hashish to their dutch daughers and then called them whores (which they are) , who he meets at the sleek social service offices waiting for his monthly hand-out. When I pointed it out, the Dutch would say it just feeeeeeels good to heeeeelp
BUT they would invite their best friend for a coffee AND it would actually but just that...a cup of coffee and you better dont ask for anything more since it costs money....
DUTCH are stupid people and their politicians are taking full advantage of it, just like the soon to be young and strong muslim majority screaming for sharia and the tax on non-muslims :)))
Thanx for the smiley face ro go with that. And you have a nice day too.
You have detracted from my observation.
In south European Countries such as Italy, Portugal, Greece it is rather uncommon for locals to have separate bills, sometimes even regarded rude, especially when in larger groups.
Well of course, why would you pay for anything if you can send the bill to Finland, Sweden, Denmark, Norway,......, and even....uhum even the frugal Dutch.
You just made an astute observation; it's the Euro zone in a nutshell.
If you filter out the daily noise, it all seems so orchestrated. First the Euro, then the Pound, then the Dollar - all shall fall so Keynes' dream of a world currency can become a sad reality. Welcome to the "Bancor" - it's fiat and no escape from it shall be permitted. Got Gold?
greedion.com
As a Dutchman, altough living in Belgium (yes, the country with no government, but we're doing fine, thanks for asking), I would like to make some dep and profoundly moving observations:
1. We don't need to be on that call, since whatever Merkel says is the law for us.
2. We are not stingy, we just don't like giving shit away.
3. Our finance minster Jan-Kees De Jager is everybody's favorite daughter-in-law, if you catch my drift.
Greece is the least of our problems, we have a pension "situation" brewing, out financial sector is 400% of GDP (don't ask), out national index (AEX) is stuffed with "non-financial" financial zombies and therefore at 1996 level, our oversight makes the SEC look good etc etc.
So please forgive us for not bothering too much with our Greek friends.
YOU ARE STINGY, its in your genes, but thats why you save money despite how much your government is asking from...
Dutch are good business people, excellent designers and artists, but when it comes to your government and how much their waste on whatever feeeeeeels good be it the moroccans on benefits, be it all kind of euro waste, then you simply forget about those billions, but the extra cup of coffee for your best friends thats a no no
Enquiring minds have to ask: "So why are the Dutch so dang tall?"
They're an auxologist's nightmare . . . . . . . . .
http://cecily-layzell.suite101.com/why-are-the-dutch-so-tall-a55753
Well if it came to a referendum vote, more then 60% would say f*** Greece, cleanup your own shit!!
Anyone remember that the Dutch voted NO to the EU constitution?
Nothing can stop the central planners, we haven't been a democracy since a long time....
I do (remember).
I think the Netherlands is a vassal state, a colony (roman empire style) of the USA.
We have a quite expensive american fighterjet (which up till now is a POS). We changed our liberal (as in "free" not as in "Obama") policy towards a NWO model state. We are the "jumping board" of nefarious enterprises like Monsanto into europe (handing them our agricultural business which was second to none), and allowed our international banking (second only to the Swiss) to be hollowed out like a rotten wood, and sold of accordingly (ABN International). Facial recognition and RFID on every fucking corner in the main cities, and to top it off we paid our dues to the EU, more than we should have.
I've ranted before about the fascist filthy rag that is the Lisbon Treaty and about the Carlyle Group buying our pension funds' money machine (Alpinvest), so I won't go there.
Dutch people work hard, are methodical, and not reliant traditionally on cronyism, however our politicians managed to create a fantasy world of their own, with matching ivory towers.
Up till a month or two ago, there was no threat of any "double dip", recession or anything. Skies were blue and infants smiled for no reason.
It's going to be a very rude awakening for most dutch, when euros will be worth a fraction of what they are now, and the bloated real estate market will downgrade to at least 40% less to be equal to german real estate prices. NO one owns gold or silver, and our central bank didn't bother to ask back our gold from our american overlords, who, no doubt, took good care of it.
Yeah people are going to be surprised, and angry, and they're going to run towards the populist, slightly fascistoïd Geert Wilders, because the rest of the bunch are a herd of snivelling weasels.
In addition, "bend over" is our national pastime. We believe we can change the world for the better and are willing to pay a lot for it. Right now we are in a "police mission" in Afganistan, since military is out of the question after the fuck-ups in Uruzgan (and Screbrenica, remember?). This "police mission" consists of 30 policemen and 420 military personnell not allowed to engage the enemy. They are allowed however to write out speeding tickets to donkeys not obeying the speed limit.
Don't laugh, it sounds funny but is so beyond fucked up it's almost normal again.
maybe the today fag dutchman is just getting his karma from the past when they ruled their colonies worldwide and would skin the locals alive if they objected
spread the wealth (sore ass) around.....
We have a saying for the likes of you: "loop niet te emmeren".
Hint; it's got something to do with your horse.
:-)
i like the Dutch people..big and white....
http://www.youtube.com/watch?v=Bek6nQGw520&feature=related
it places the lotions in the basket
Tulips, Cheese and stick in the spokes in the euro ponzi gears.
Dutchies are alright, they are of German blood, see their national anthem. So they are also governed by the big fat old lady.
But wait, the little asian harry potter who thinks he is the vice-chancellor just said that we can say that a greeek default is not impossible. so did the bavarian giant.
then again, they are not german
I frankly suprised any country worth a shit in the EFSF, like the Dutch, didn't demand the same or better collateral the very minute it became public the Fins decided to "balk".
what can they pledge?
the greed that brought these banks together under the euro underlies their current behavior, which is to try and profit from the other's collapse.
that instinct will basically guarantee that no 'solution' comes forth for the euro. the entertaining part is that there is so much counterparty risk, very few of those institutions buying cds from european banks will get paid when this is all over. and unlike the fed dishing money to goldman at 100 cents of each aig CDS dollar, the ECB will have no ammo to save the biggest german and french banks.
will the FED step in? will europe start using the SDR after this is all over? will the SDR be part of a stealth bailout by russia and china that utilitzes their gold reserves to place the SDR into europe, effectively undoing not only the euro, but the mcarthur plan?
if europe can be turned to the gold-yuan backed SDR at some point in the future, then they are eventually going to be persuaded against allying with the petro-dollar. this is a backdoor against fiat dollar supremacy, perhaps forcing the u.s. to go back on the gold standard in the distant future.
What is Holland? http://www.youtube.com/watch?v=-csGDoSSZyc
The Dutch Ministry of Finance acknowledged yesterday that the Netherlands and other European countries are preparing for a Greek bankruptcy (google trans from Dutch)
Dutch banks are preparing for Greek bankruptcy (google trans from Dutch)
Dutch Rabobank CEO: Greece goes bankrupt (google trans from Dutch)