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How Much Is That Greek Doggy Worth In The PSI Window?
With the Greek government bonds (GGBs) and CDS basis package trading at its highest in six months (over 96% of Par) and GGBs trading below 20% of Par (compared to considerably higher 'expected' PSI-based valuations), it seems the market is much more convinced of an imminent credit trigger and no PSI deal than headlines are crowing about. Combining the new 30Y bond, 2Y EFSF add-on, and GDP warrant, BARCAP arrives at a price of around 26.6% of Par for PSI-able bonds - considerably above the current depressed price of GGBs and together with S&P's negative outlook change to the EFSF this morning, it would appear that market participants are not expecting a deal to get done by March 20th. Perhaps that is why hope is so high this morning for a quadrillion Euro LTRO2 to see them through? That should help oil prices!
The Greek Bond-CDS package - that theoretically pays off par if a credit event is triggered - is trading at its highest in six months - and given the yields/spreads involved, the March 20th maturity of the closest bond AND the fact that this date is also a CDS rollover date, suggests market participants are expecting an 'event' before this (retro CACs?). The closer the value of the basis package gets to 100, the higher probability and/or sooner the credit event is expected to be.
GGBs trade well below the implied PSI valuations levels - implying very little belief in the deal being done as it stands - even with accrueds being paid in full.
BARCAP has created some proxy valuations based on the combined value of the new 30Y GGB, the 2Y EFSF bill, and the GDP warrants. As is clear - the valuations are notably above market (27-9% versus market average of 22%) and yet buyers are not reappearing.
It would appear that GGBs remain very much the bull-dog in the European china-shop and while hope remains high for the PSI deal to be done, market prices do not reflect this hope.
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CDS trigger bitches let the banks eat their own shit
The credit event technically should of already occured, if not for the politicians fudging around. This is going to crush the banking system if / when it occurs.
http://ericsprott.blogspot.com/
Ever see the composition of the ISDA credit event committee? It answers a lot of QEstions as to why a credit event declaration isn't coming anytime soon:
http://www.isda.org/credit/
When will the people revolt against these inflationist?
As soon as they are organized and unified, which will be....it won't.
My revolt is to tranform fiat into stuff of value and wait for these chumps to make all that stuff more valuable.
"the people" are preoccupied. They're still in a credit infused daze. They will wake up one morning and not be able to participate. Their jobs will be gone. Their offices of employment will be closed. They will not be able to access the "money" that they thought they had in their bank accounts. Their entitlement payments will not be paid out. They will start talking to neighbours and they will collectively learn the truth and understand what happened.
The issue is not so much diluted paper currency, or peak oil or fraud.
SUSTAINABILITY
Societies at this level are not indefinitely sustainable. Credit has allowed societies to consume above and beyond what they normally would. Credit has increased the depletion of resources and an increase in population.
YIELD
The very one thing that credit and the dilution of money CANNOT CHEAT is YIELD.
Yield like gravity is defined by laws of nature. It just IS the way it is.
COMMON SENSE
The money changers can maybe delude themselves into believing that what they are doing is actually helping the society. I would go so far and say that they really do believe these figments of their imaginations.
But good common sense is NOT lost. It will come back very quickly as the events unfold and "the people" who have been cuddled into their illusion of stability and a comfortable life will collectively experience this "aha" moment. At that time "the people" will also quickly remember what being a human is all about.
Humans need to drink, eat, breathe and rest. Maybe some expression of art and culture. Whatever else we think we need is bullshit and NOT SUSTAINABLE.
Like I've always said, how can you force a party who bought via contract a CDS on a bond to not claim that a credit event did happen. When a bond isn't paying out the amount that was guaranteed and/or not paying it's percentage at the time quoted, it's essentially in default and the CDS's come into being. If not then the insurance companies would have to pay back the money that was being paid on those CDS's on those bonds but it won't go that far because they would have to declare a credit event. If the committe doesn't declare a credit event they are screwed, because the next thing that will be pushed is a definition of what is considered a credit event, and this is what will catch them.
If they define it to not be the worst that is happening in Greece, then other financial institutions in countries and even for companies will sue banks and insurance companies and other countries for credit events that was declared on them when they where no where like Greece. The committe is in a horrible catch 22. This reminds me of a scene from Scar Face, where Tony montana is caught counting money and trying to launder it on federal cameras. His lawyer tells him that he has to do prison time, it doesn't matter how good or connected or bribery he could do, he was caught on camera for hours counting millions and that is a hill that even he can't get up.
The EU and the US are doing everything they can to not feel the pain of this horrible financial problem, but all they are doing is delaying the inevitable. Eventually they will have to take this hit regardless of how they feel.
whats is this quote by stratfor ceo friedman worth? "we are retaining a law firm to create a policy for stratfor on the Foreign Corrupt Practices Act. i don't plan to do the perp walk and i don't anyone here doing it either." wouldn't the Aliens and Sedition Act work just as well? the balls of these ass clowns thinking they can control this shit forever. unbelievable
It's global intervention time: http://www.armadamarkets.com/2012/02/weekly-update-its-global-intervention-time/
The MSM news headlines have been stuffed to the brim with horseshit the past 3 weeks, irt. coverage of the Greece situation. All the news we're read here in ZH has made essentially ZILCH appearence in the regular investment circles and business fishwrap.
But the underlying perception of most sophisticated investors is in tune with ZH more so than ever. These people just need to maintain a cynical exterior, speak out both sides of their mouth, etc. to help their sell side and to trap the maximum amount of euphoric unwitting musical chair dancers. ie. AAPL buyers in mid dance for when the ALGO stop buy moment turns off the music for a good two or three months.
Desensitized, weary and jaded, that's how we like them. Greece defaulted, is in default and will default. They'll stay in the EZ which won't mean much because we are all under MAD indefinitely.
Have you ever seen one of those YouTube videos of some poor sap(s) pouring lighter fluid on an already flaming back yard barbecue?
WHOOSH!
We ain't seen nuttin' yet.
The price of a share of AAPL is equivalent to the price of a 6-month old feeder steer / give or take.
At 6-month old the feeder steer weighs around 400 lbs. After raising to 12/14 months of age the steer weighs 900 to 1000 lbs and will sell for around $1200 on hoof.
AAPL shares are not going to double within 6 months.
Oh, and you CAN eat the meat from steers.
Now, will I continue selling my steer for diluted paper or would I rather accept real currency?
Package sale: Three 6-months old feeder steers for 1 oz gold.
Yeah but those feeder steers are a lot of work. Lot's of early mornings and late evenings. Not to mention the input costs and the potential loss of future feeders in the form of lost calves It's admirable work but not everybody is cut out for it.
Of course not. It's much easier trading worthless shares in a virtual casino and hoping to strike it rich. /sarc
I could go into much more detail. Let's just say that the world as we have gotten to know it will change. The economy of pencil pushing and developing desktop applications will come to an end.
Facebook is not feeding people. Facebook is probably the epidemy of this delusion that some are calling economy. Facebook is the equivalent to chatting, gossiping and plain and simple time wasting. People still think they're covered financially and will have jobs to afford them shelter and food for eternity.
Nothing is safe. There are no guarantees. Especially the public service sector will see drastic cuts and reductions. Where are all these people going to work? What are their skills? Can they shovel shit or rake hay? I might find out.
I'm not disagreeing with you,as a matter of fact it's just the opposite I totally agree with what you are saying. My comments are on the fact that probably 1o% of society understands what you are talking about, and even fewer are cut out for it.
Soon they won't have a choice but to learn and understand. Their LIFE will depend on it.
If there is one thing I take away from chart one it is not the current green arrows up but the missing green arrows on the first 2 spikes and how quickly they skyrocket. I would say an acceleration of the current trend is very likely.
Of course "likely" and 4 Euro will get you a cup of coffee in Greece.
The super weight prize fight of criminal syndicate Wall Street bank bond buyers vs. recently impaired Hedge Fund CDS continues, and recently impaired Hedge Fund CDS has landed a nice combo of face punches.
Too bad ISDA is chaired by the same people who gain from this ridiculous circular money flow.
Jesus, I would love to bang that Snorg 'Tease' chick.
You ain't the only one. She should apply for a position at Bloomberg or CNBC so we could see more of her.
I'd rather her become a meth addicted prostitute. Its a more honorable profession ...
This SAGA never seems to end. All these events are very disturbing and nerve racking. especially being short. I just want to cover and roll up into the fetal postion and say never again to all this shit.
Frustrated Short
You should not be short. You should not be short. You should not be short.
Hope that helps.
If it is only consolation, we will probably start shorting SPX 1380-1400 if it coincides with the first PSI take-up announcements falling within our expectations, as Elliott will make sure it is only downhill from there. Operation robo-kill will then enter phase 2 at that point.
Isn't "Greek Doggy" (semi) redundant?
CDSs never gonna trigger. Listen, some thought the German vote today was an event. 450 - 90 !!!! Some event. It's just like all the "other" things over the past 6 months that could have caused Greece to barf toxic spew all over the work fin mrkts. Yep, they all "coulda" happened....but none did. Why? Everybody.....EVERYBODY gets b(r)ought around to the Banksters point of view ithe end.
EVERYBODY gets b(r)ought around to the Banksters point of view ithe end.
Sort of. The banksters view is from the end of the barrel with the trigger.
0T? you decide
ronPaul: Economy Squeezed As Debt Accelerates
RISK RALLY INTERNALS AND AUDJPY GOLDEN CROSS
http://capital3x.com/think-tank/risk-rally-internals/
Have you seen Tucker Carlson with his asinine comment that the U.S. is the only country with the moral authority for a first strike?
http://youtu.be/83LDtji3iEY
"Mission Accomplished"
This is, quite possibly, the stupidest man in America.
Angela Merkel : we can't let Greece leave otherwise others will follow!
http://www.youtube.com/watch?v=8ugNOj8JsXY
THE REICH MUST STAY INTACT! SIEG HEIL!
10 to the 15th dudes. Let's get this over with.
The CDS event will not be allowed to trigger.
Unless the voting members sold all of their contracts to a bunch of bag holders and bought a bunch of puts.
win win...well, actually not