For Those Not Watching CDS Implode, It Is Heinous

Tyler Durden's picture

From Peter Tchir of TF Market Advisors

IG16 is 125.5 +10 as I type.  Could be 5 bps different by the time I finish writing.  Main is being quoted on 2 bp markets.  I'm seeing IG16 quoted on anywhere from 1 to 2 bp market.  Typical bid/off is 1/2 a bp.  HY16 is down 1 3/4 points again, but shockingly is still being quoted in 1/4 pt markets by most dealers.  It could be a bright spot when the weakest of weak is actually holding on to some liquidity.  Maybe have some people looking for the bottom in that market. SOVX is trading on 6 bp markets, and fins in Europe are all over the place.

Not much to say, that I didn't say yesterday.  We are back to seeing bank bear raids and if anything, the markets are brokener (and my spelling is worse).  I'm not sure liquidity at the bank funding level can disappear as quickly as we are pricing in, so am pretty sure someone is going to buy IG16 at a price that brings tears to their eyes later today.  It may be the 125.5 print.  It might not, but this will be gappy.  There is zero liquidity and the market is trading in a vacuum.  This could be ugly in either direction from here.  I guess it already has been in Europe where the markets were positive for awhile. 

Finally, it is a shame and in many ways an embarrassment that no one could figure out how to get CDX indices on an exchange by now.  E-minis are there trading away all day and night long.  IG16 right now has 10 dealers scrambling around trying not to be off market and 100's of clients staring at their phone, guessing what dealer is most likely not to flake if they call for a trade.  And a few, looking around trying "make the market more efficient" by finding which dealers are a second too slow to change their prices.  An utter failure by the exchanges and regulators to not have some version of this in the truly public domain.  

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swanpoint's picture

heinous, brokener bitchez

ratso's picture

Good word - "brokener" should be a new word applied to comparative anaylsis of successively failed markets when assessing their different degrees of liquidity freeze up.

slaughterer's picture

"This could be ugly in either direction from here."

Always a measure of incertitude. 

ZeroPower's picture

IG16 right now has 10 dealers scrambling around trying not to be off market and 100's of clients staring at their phone, guessing what dealer is most likely not to flake if they call for a trade. 

Totally f'n right. Want any interesting sov in size? Be ready to give another 10bp either way.

Xover at 680/690 and you literally cant get it in any decent size. Want to hit the price, be ready for games w the MM. On some normally liquid corp names, not even any offers listed on screen.

Miles Kendig's picture

Terrific tell tales

Thanx ZP

trainrobbery's picture

Why would the public ever need to buy insurance on bonds?  Bonds are safe right? - Tim Geithner

oogs66's picture

ugh, just spit coffee on my keyboard :)

Miles Kendig's picture


Works just fine here off south Main Street.  'round here that's conjugated broke, brokener, brokenest

Cheers Peter

Sheriff Douchenik from AZ's picture

Anyone have the links to get those quotes so I can pull those up on my interweb machine?

Manthong's picture

"ugly in either direction"

The new normal.

blueRidgeBoy's picture

Anyone have a good source where I can learn all this trader lingo you ZH'ers throw around so breezily?  Can't count the number of times I've asked for a definition of "momo"  :-)

Auric Goldfinger's picture

Good to 'see' you, Miles.



Jonas Parker's picture

broken, brokener, brokenist... makes sense to me...

chinawholesaler's picture

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