Almost exactly one year ago, [7]Greece returned "triumphally" to the bond markets when it issued its first 5 Year bond post-bailout at the lowest yield since 2009. This was trumpeted by business media...
Congrats to Greece on its triumphant return.
— Joseph Weisenthal (@TheStalwart) April 10, 2014 [8]
... who especially clung of the fact it was eight times oversubscribed, more than the demand for Facebook IPO shares, as 'proof' that Greece was fixed, the crisis was behind Europe, and everything should be bought.
There were countless comedic punchlines, such as the following [9]:
Greek bondholder Hans Humes, chief investment officer at Greylock Capital, said costs should be as low as 25 bps above Portugal's, or about 3.25 percent.
"Sure, the costs are a bit higher when coming to the market but the sooner they do it the better," said Humes, who believes Greece's debts to the private sector are so small compared to those owed to the EU and IMF that another haircut imposed on private investors makes little sense. "Selling to a voluntary market on a new issue basis is a game changer," he said.
We were far less sanguine and at the time we noted [10], "claims that is the best example of positive sentiment and of a new normal are foolish - if nothing else, this is a sign of utter complacency and exuberance."
We were right.
From 8x over-subscribed to 60c on the dollar in a year.
Which however is great news for Mr. Humes: because if he liked the bonds at a yield of 4.95% he should be all-in this morning when they are yielding a record high 20.2%, right!?
[11]
You were warned: [7]
"Fear Of Missing Out [12]" - that is the only way one can explain the irrational idiocy with which asset "managers" are scrambling to allocate other people's money into today's "historic" Greek (where unemployment just printed at 26.7%) return to the bond market, and which according to Greek PM Venizelos was eight times oversubscribed, or far more demand than for the Facebook IPO.
It seems, once again, that Greek yields are catching up to the state of collapse in the country, and the only thing that is preventing the rest of Europe from following Greece into an ecnomic singularity is hope and faith that Mario Draghi will continue to monetize everyone else's bonds, ironically the same "catalyst" behind the 8x oversubscription.
[13]
