• GoldCore
    12/18/2014 - 13:54
    Russia supplies China with hi-tech military hardware. Russia has negotiated two major natural gas deals with China in the last year. China expects to double its gas usage by 2030. From a Chinese...

Sovereign Risk

Sovereign Risk
Tyler Durden's picture

Is The PIIGS Moment Of Fracking Approaching? S&P Joins Sovereign Risk Brigade, Downgrades Greece To BBB+





More bad news for a troubled Greece. More bad news for a troubled Greece. And all this happening even as finance minister George Papaconstantinou says that Greece "is not banking and not operating under the assumption" that the Hellenic country will be bailed out by its Eurozone neighbors. He has certainly studied the Dick Fuld script well.

 
Leo Kolivakis's picture

Is Dubai's Sovereign Risk Overblown?





The global liquidity rally has legs to run, so don't get too flustered by Dubai's debt woes.

 
Tyler Durden's picture

Sovereign Risk Begins To Tick Up As Banana Equities Continue Following Fundamentals Inversely





Another indication of how banana equities represent the inverse of the fundamentals they are supposed to track, is today's action in Sovereign CDS: Virtually all the big names are wider between 5 and 10%, with the UK and US moving wider by 10.1% and 8% overnight. What is odd is that EUR denominated US protection is also wider: traditionally this tightens when it moves purely as a function of dollar moves. This means investors are finally approaching the sovereign derisking trade once again. With the US at 27 bps (and 20 bps a few weeks ago when we speculated about this as an attractive hedge entry point), the recent melt up in gold may just be moving over to sovereigns next. In that case, investors will need to reevaluate just how solid US "guarantees" on all asset classes really are. a 20% move in a little over a week does not send a message of reassurance that the Obama admin knows what it is doing any longer.

Update: Belgium 8 bps wider to 44 on Dexia news.

 
Tyler Durden's picture

A View On Sovereign Risk





The chart below presents the top 20 sovereigns with the largest amount of net CDS (not gross) notional outstanding. Interestingly, Italy and Spain, with their $20.4 billion and $11.1 billion in net notional, have the most net risk exposure, (General Electric, parent of brutally realistic and objective financial news station CNBC is at $11.2 billion). Additionally, the chart demonstrates not just the current spread of any given sovereign's CDS level, but also the phenomenal tightening that has occurred since March 6.

 
Tyler Durden's picture

Tracking The G7 Sovereign Risk





Zero Hedge has written repeatedly in the past about the importance of keeping track of sovereign CDS levels as more and more corporate risk (especially in financials) is being offloaded to the balance sheet of respective sovereign balance sheets. And while pundits may claim these indications are useless as there is no way, no how that the U.S.

 
Tyler Durden's picture

Tracking The G7 Sovereign Risk





Zero Hedge has written repeatedly in the past about the importance of keeping track of sovereign CDS levels as more and more corporate risk (especially in financials) is being offloaded to the balance sheet of respective sovereign balance sheets. And while pundits may claim these indications are useless as there is no way, no how that the U.S.

 
Tyler Durden's picture

Tracking The G7 Sovereign Risk





Zero Hedge has written repeatedly in the past about the importance of keeping track of sovereign CDS levels as more and more corporate risk (especially in financials) is being offloaded to the balance sheet of respective sovereign balance sheets. And while pundits may claim these indications are useless as there is no way, no how that the U.S.

 
Tyler Durden's picture

Sovereign Risk Update





I will keep harping on this theme until such time as harping is no longer necessary. Equity market rippage has resulted in essentially zero change in overall country risk profiles (and deteriorating risk in Japanese risk). There is a massive disconnect between equities and credit, especially sovereign credit which is becoming a defacto proxy for corporate risk via extended short-term guarantee programs and assumed liabilities.

 
Tyler Durden's picture

Sovereign Risk Update





I will keep harping on this theme until such time as harping is no longer necessary. Equity market rippage has resulted in essentially zero change in overall country risk profiles (and deteriorating risk in Japanese risk). There is a massive disconnect between equities and credit, especially sovereign credit which is becoming a defacto proxy for corporate risk via extended short-term guarantee programs and assumed liabilities.

 
Tyler Durden's picture

The Inversion Of Corporate and Sovereign Risk, Or The Sovereign Basis Trade





The recent spillover of the threat of an Eastern European collapse, and its gradual spread into the Eurozone, has manifested itself best in the dramatic widening of sovereign CDS. The so-called socialization of risk had resulted in a tightening of corporate and bank default risk at the expense of the respective sovereign domiciles.

 
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