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LCH Hikes Spain, Italy Margins

Tyler Durden's picture




 

Another day, another LCH margin hike on Spanish and Italian bonds. Spanish SPGBs which will have to post more margin beginning tomorrow are all bonds with a maturity between 0.75 and 3.25 years, as well as bonds between 10 and 15 years, as well as all short-term Italian bonds between 3.25 and 7 year, in effect offsetting Draghi's "reverse Twist" house of cards. Expect to see more flattening in the Spanish and Italian 2s10s curve, followed by more promises of imminent action by the ECB, which however, may finally be realizing that for Spain to actually demand a bailout, its 10 years will have to be closer to 10% than to 5%. Finally, if this ratcheting up in asset encumbrance in Europe doesn't send the VIX to single digits nothing will.

Spain:

Italy:

full release

 

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Mon, 08/13/2012 - 13:24 | 2701129 AdrenalineTrade
AdrenalineTrade's picture

Bullish

Mon, 08/13/2012 - 13:29 | 2701140 knukles
knukles's picture

Here're my Spanish and Italian bonds for Initial Margin

Mon, 08/13/2012 - 13:43 | 2701174 malikai
malikai's picture

LOL. +1

Mon, 08/13/2012 - 15:10 | 2701553 butchee
butchee's picture

How may positive feedback loops does it take to make a clusterfuck?

Mon, 08/13/2012 - 13:29 | 2701138 Dr. Engali
Dr. Engali's picture

Ouch that will leave a mark. I wonder which highly leveraged firm will be the next to blow up.

Mon, 08/13/2012 - 14:11 | 2701268 oogs66
oogs66's picture

somoene was using 20:1 leverage on spain and has to shut down because now it is 16:1.  this is supposed to be the intelligent site

Mon, 08/13/2012 - 13:30 | 2701141 saturn
saturn's picture

sPain in Italy.

Mon, 08/13/2012 - 15:11 | 2701562 butchee
butchee's picture

SPITaly

Mon, 08/13/2012 - 13:32 | 2701147 KarlGDenninger
KarlGDenninger's picture

I am the way the truth and the light. My sons, we must prepare for the end times...come to me and all will be well. We must keep our money from the zionist lizard bankers. please visit my page to learn the truth

http://www.angelfire.com/ca6/timespiral/ufo.html

Mon, 08/13/2012 - 18:42 | 2702251 Jack Napier
Jack Napier's picture

Only one person is the Way, the Truth, and the Life, and at such time as He does return we will already be removed from this plane. The love of money is the root of all evil, and the truth is not exclusive.

Matthew 16:25 - For whosoever will save his life shall lose it: and whosoever will lose his life for my sake shall find it.

Mon, 08/13/2012 - 13:36 | 2701157 Dr. Engali
Dr. Engali's picture

I only have one question....Where in the hell is Banzai?

Mon, 08/13/2012 - 13:38 | 2701159 ParkAveFlasher
ParkAveFlasher's picture

"Paging Dr. Liquidity, you are needed in the ER."

Mon, 08/13/2012 - 13:43 | 2701172 ar01
ar01's picture

Am I reading this correctly that one can buy 1.25-2 year dated Spanish bonds posting only 4.4% margin?  Jesus... no wonder Europe is an over-levered knightmare. 

Mon, 08/13/2012 - 13:45 | 2701182 LongSoupLine
LongSoupLine's picture

using the LIBOR math models...

Mon, 08/13/2012 - 13:44 | 2701179 LongSoupLine
LongSoupLine's picture

 

 

that's an es 1500 sign for sure...however I'm going to wait and see what GS's inhouse genius, Stolper, has to say first.

Mon, 08/13/2012 - 13:48 | 2701196 Winston Churchill
Winston Churchill's picture

Talking of margin calls.

Tyler,wheres the Fed repo market intervention data ?

Thought it was due last Thursday.

Ominous silence,or are they sitting on it ?

Mon, 08/13/2012 - 13:58 | 2701228 distopiandreamboy
distopiandreamboy's picture

Don't they know Europe's on vacation?

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