. . . crawling in the dirt, and for all the little piggies, life is getting worse ! Credit Default Swaps of the Portugal, Ireland, Italy, Greece and Spain:
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click for larger piig chart
Courtesy of Bianco Research
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
"Dollar depreciation leads to higher inflation and ultimately forces foreign creditors to question their rationale and indeed their sanity for continuing purchases of U.S. Treasuries." -Bill Gross
Signs continue that European markets are getting tired. The Spanish and Italian stock markets, big beneficiaries of the sharp decline in their bond yields over the past few months are falling to the lowest since Feb 1. The European bank index is at a 1 1/2 week low after earnings reports from Commerzbank and Credit Ag (RBS bouncing although reporting weaker than expected earnings) were disappointing. This market action is in spite of the German IFO business confidence figure which rose to a 7 month high coming in a touch above expectations and Italian consumer confidence which bounced more than...
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May 24th, 2011 at 1:17 pm
Look mom! We’re going to the moon!
May 24th, 2011 at 2:31 pm
Slowly crawling to the slaughter-house.
May 24th, 2011 at 4:08 pm
You’d think Italian CDS’s would have risen over the past 18 months.
May 24th, 2011 at 4:59 pm
Just posted a trade idea on the blog:
http://thetailchaser.blogspot.com/2011/05/why-going-long-germany-5y-cds-40bps.html
May 24th, 2011 at 5:05 pm
Adding to the comments, the Greek CDS move, on the chart, screws it all visually for the other countries.
Italian CDS had quite a few good runs… from 50 to 150, then back down to below 100.. then back up to 250.. then back down again to 130.. and on and on.
If you add the carry, those upswings occurred quite quickly.. 3-5m holding the CDS @ 130bps = 30-60bp costs in carry + profits of 50-100bp moves * 4.5y duration.. and you get a nice 5-10:1 pay-out.
We’re not trying to hit the bulls eye here, just the repricing of default risk. Then out. And still.
May 24th, 2011 at 5:33 pm
I wonder what CDS prices on U.S. debt will be, ten years from now.
May 24th, 2011 at 6:32 pm
I can’t wait for travel to Europe to be dirt cheap, again.
May 24th, 2011 at 9:02 pm
“Intrigued Trader”: Interesting points. I wasn’t thinking of the chart from a trading perspective. I was just looking at the lines on the graph and thinking about recent media coverage and political controversies. Your comments gave me a basis for a fun few minutes of looking at that info anew. Thanks.
May 29th, 2011 at 10:05 pm
“Mi casa, su casa” Swmnguy.