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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.



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Mon, 08/13/2012 - 13:24 | Link to Comment AdrenalineTrade
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Mon, 08/13/2012 - 13:29 | Link to Comment knukles
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Here're my Spanish and Italian bonds for Initial Margin

Mon, 08/13/2012 - 13:43 | Link to Comment malikai
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LOL. +1

Mon, 08/13/2012 - 15:10 | Link to Comment butchee
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How may positive feedback loops does it take to make a clusterfuck?

Mon, 08/13/2012 - 13:29 | Link to Comment Dr. Engali
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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 | Link to Comment oogs66
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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 | Link to Comment saturn
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sPain in Italy.

Mon, 08/13/2012 - 15:11 | Link to Comment butchee
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Mon, 08/13/2012 - 13:32 | Link to Comment KarlGDenninger
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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

Mon, 08/13/2012 - 18:42 | Link to Comment Jack Napier
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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 | Link to Comment Dr. Engali
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I only have one question....Where in the hell is Banzai?

Mon, 08/13/2012 - 13:38 | Link to Comment ParkAveFlasher
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"Paging Dr. Liquidity, you are needed in the ER."

Mon, 08/13/2012 - 13:43 | Link to Comment ar01
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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 | Link to Comment LongSoupLine
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using the LIBOR math models...

Mon, 08/13/2012 - 13:44 | Link to Comment LongSoupLine
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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 | Link to Comment Winston Churchill
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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 | Link to Comment distopiandreamboy
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Don't they know Europe's on vacation?

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