Greek Bond Yields Explode as 1 year moves 100 bps to over 752% in One Day

Greek Bond Yields Explode as 1 year moves 100 bps to over 752% in One Day



by John Galt
February 22, 2012 05:30 ET

In what can only be called a determination of default by investors, the sell off of Greece’s short term debt tells a tale of woe. The 1 year bond yield moved from yesterday’s close of 652% to 752% overnight while the 2 year moved a whopping 20 bps from 192% to 212%. If this isn’t the true vote on the alleged ECB/IMF “bailout” I do not know what is. This is a nation falling into disarray, default, and ultimately anarchy if they do not act to withdraw from the European Union and re-establish their own currency. The Icelandic solution may not be pretty, but there will be no private buyers for Greek debt after the CAC law are enacted.

(charts from Bloomberg.com)

http://johngaltfla.com/wordpress/wp-...gfla022212.jpg

http://johngaltfla.com/wordpress/wp-...gfla022212.jpg

Into the abyss.....

With declaring ex post facto that bondholders have no rights to be paid in accordance to what they signed up for, I'm not surprised. No one with two brain cells would buy Greek debt now, without at least two loaded guns pressed against his head.

Quite the ride from 100+10% 6 mo ago. Seems like war will be on the horizon after all. Faced with the decision of balancing you're budget sticking with the euro-clan (prob wont happen ) and facing all the niceties of austerity measures etc.; defaulting then using the drachma and the balancing the budget a kind thumb in the eye to Germany France and the tinder box frmally known as italy (possible minus the balanced budget part); defaulting within the euro whilst watching capital purge like a bad burrito and the euro torn asunder (likely); I'd choose revolt and repudiation of debt :mrgreen: but this would be the surest way to a blue helmet parade. Either way the proles in Greece are in for an interesting ride and with the US marching to the same beat, with a much much larger band, that old Chinese proverb may ring truer than I want to think about. Anyway I can take out an insurance derivative of an insurance derivative?

-jw
--dictated but not proof read--

Quote:

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Originally Posted by MinnesotaSmith

With declaring ex post facto that bondholders have no rights to be paid in accordance to what they signed up for, I'm not surprised. No one with two brain cells would buy Greek debt now, without at least two loaded guns pressed against his head.

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Actually the question is why would the buy in Euro bonds as what has been done in Greece will surely be done for Italy, Spain and Portugal at some point and maybe for some others like France.

Quote:

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Originally Posted by rlm1966

Actually the question is why would the buy in Euro bonds as what has been done in Greece will surely be done for Italy, Spain and Portugal at some point and maybe for some others like France.

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It's just that the thread's OP was about Greek debt, so I restricted my comment to that.

Found this:

About an hour ago, Fitch downgraded its credit rating on Greece from CCC to C - the level that indicates default.

It said that the debt-swap deal will constitute a "distressed debt exchange". Once the swap is completed, it will lower Greece's rating to RD (for restrictive default), and then re-rate the country "at a level consistent with the agency's assessment of its post-default structure and credit profile".


Whatever that mouthful actually means.

You should be able to find the statement here somewhere:

http://www.fitchratings.com/web/en/d...fitch-home.jsp


Here:
http://www.zerohedge.com/news/breath...omment-2184233

Someone needs to run a market watch. I would do it, but I'm out the door in a bit.

Good find, by the way.

This news could spook the markets. We'll see


http://online.wsj.com/article/SB1000...LEFTTopStories

Quote:

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Originally Posted by CaptSkip

Found this:

About an hour ago, Fitch downgraded its credit rating on Greece from CCC to C - the level that indicates default.

It said that the debt-swap deal will constitute a "distressed debt exchange". Once the swap is completed, it will lower Greece's rating to RD (for restrictive default), and then re-rate the country "at a level consistent with the agency's assessment of its post-default structure and credit profile".


Whatever that mouthful actually means.

You should be able to find the statement here somewhere:

http://www.fitchratings.com/web/en/d...fitch-home.jsp


Here:
http://www.zerohedge.com/news/breath...omment-2184233

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It means they are getting ducks in line to declare Greece as in default, and that will trigger a default for the purposes of credit derivatives.

Quote:

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Originally Posted by rondaben

It means they are getting ducks in line to declare Greece as in default, and that will trigger a default for the purposes of credit derivatives.

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Well, you'd think so...in the real world.

But ever since CME and MF Global penned some all-new and creatively illegal rules...as did the ECB by magically placing the ECB only in first position on Greek Bonds in the event of a default...

...I've concluded we now live here:

http://www.alan.com/wp-content/uploa...rro-world1.jpg

...so I won't hold my breath now for real and legal.