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Daal
 

Registered: Oct 2002
Posts: 9002

 

05-29-12 09:40 PM


Quote from dhpar:

ok ok. so what do you see here as an downside risk (in bps) for Schatz yield given the current levels?

also, technically the price looks weak...though of course on any medium/long term indicator it is as a bullish chart...


you mean how low negative yields can go?I'm not sure, probably pretty darn low. This is an unique situation due the redenomination risk. Usually people won't buy bonds at negative yields because you can just keep cash in the mattress. With redenomination risk the game changes

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ralph00
 

Registered: May 2004
Posts: 2275

 

05-29-12 09:50 PM

Negative yield on German paper doesn't mean a lot. Embedded in their value is a call option on redenomination.

Paulson is short Bunds (hope he's still not taking investing advice from Greenspan).

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dhpar
 

Registered: Nov 2006
Posts: 1732

 

05-29-12 10:55 PM

huh? is that all I get here? some snippets from the Bild? we extensively discussed re-denomination stuff on this thread some 6 months ago...and to my frustration on several pages.

I was expecting some comments on relative value, e.g. curve trading (dv01 or par weighted), UST/GGB trading, rates/equity etc...not something like "if there is an Armagedon you will lose money"...somehow I know that and put some hedges on...

personally I believe that zero nominal bound (+/- few bps) is not that easy to break unless a full panic mode is in...and even with panic it has never happened before afaik...of course never say never


I already feel much better in my position...it does not look like a crowded trade.

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Daal
 

Registered: Oct 2002
Posts: 9002

 

05-30-12 10:22 AM

"More than half, or 52.4 percent, said they should stay in the euro if they were forced to accept the current austerity measures accompanying the bailout while 44.5 percent said they shouldn’t."

http://www.bloomberg.com/news/2012-...ised-terms.html

Almost half of the Greeks would drop the EUR if they had to do more austerity. Explains a lot of the support behind the no bailout parties

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dhpar
 

Registered: Nov 2006
Posts: 1732

 

05-30-12 11:05 AM

looks like we may get negative on schatz yield by the end of this week...flattener works well (as opposed to outright short)

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Daal
 

Registered: Oct 2002
Posts: 9002

 

05-30-12 11:17 AM

Chris Adams ‏@ChrisAdamsMKTS
"Days to bailout with bond spreads over Germany at 500bp plus: Greece 16 days, Ireland 24 days, Portugal 34 days... Spain (3 days so far)"

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