Trading Financial markets : Eurozone debt crisis

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Euler
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Wed Feb 11, 2015 12:06 pm

We are at a curious stage now in this game.

This is crazy: Nestle is getting paid to borrow money

http://www.washingtonpost.com/blogs/won ... row-money/

andyfuller
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Thu Feb 12, 2015 11:05 am

Interesting choice of headline by the writer.

From the comments:

Nestle is not only not getting paid to borrow, it is paying interest on its debt. The $500MM debt that matures October, 2016 is paying interest at a rate of 0.75%.

The market demand for Nestle debt is so strong that the yield (defined as an income return on investment) is now negative. If you want to buy the bond right now, the price is so high that you lose money if you buy it on the open market. Nestle is not issuing new debt at a negative rate of interest.

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superfrank
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Thu Feb 12, 2015 1:27 pm

Sweden cuts rates below zero and starts QE
http://www.bbc.co.uk/news/business-31436657

not EZ but the race to the bottom continues.

zero rates are a symptom of failure. central banks are pushing on a piece of string with ZIRP and realise that they have to keep increasing the money supply by any means to stop a debt/deflation implosion. it's just the same as what happens when a traditional ponzi scheme starts to run out of mug investors (they have to continually expand or they collapse).

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Euler
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Thu Feb 12, 2015 5:33 pm

Denmark seems to be the next place under pressure as they try to hold their peg to the Euro, surely doomed.

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Euler
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Thu Feb 12, 2015 5:39 pm

Line up your bets!

Speculation Against Danish Euro Peg Proving Relentless

http://www.bloomberg.com/news/articles/ ... relentless

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Euler
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Mon Jun 15, 2015 6:52 pm


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mklim_irlpl
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Mon Jun 15, 2015 8:24 pm

Why can’t Greece just declare bankruptcy?
http://www.marketwatch.com/story/why-ca ... 2015-06-15

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Naffman
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Tue Jun 16, 2015 6:47 am

If only we could all retire at 50!

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marksmeets302
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Mon Jun 22, 2015 4:04 pm

Greece not leaving eurozone now valued at 80% at betfair.

With today ("the mother of all d-days", "just 3 seconds on the clock left", "now or never") probably just passing by without a real decision the soap continues. It would be enjoyable if not so much was at stake.

The geopolitical consequences for letting them default can be so chaotic and devastating, while the consequences for bailing them out again will be severe as well. If it were just for the fate of our Greek friends, I'd write off my portion of the claim on their debt right now. Unfortunately it's far more complicated.

The creditors are constantly focusing on the Greek pensions, and Tsipras is defending it because it's about the only form of welfare left in the country. Why not push for a more complete restructuring of the country? Model the social benefits after other EU countries. That would mean pension starts at 67, but there would be disability payments etc. This would bring more uniformity to the EU, less reason to criticize our fellow Europeans. Something good might still come out of this.

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marksmeets302
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Wed Jun 24, 2015 1:17 pm

There's a bit of an arbitrage opportunity between betfair and the greek bond market. It's not 100% watertight I admit, but might give some people new ideas.

The greece 3% bond maturing in 2023 is currently valued at 60%. Betfair users value a grexit at 20% (this morning 10%). Either the bond traders are too pessimistic or the people on betfair too optimistic. You need a good broker but you could buy the bond and lay the liability off at betfair for a semi guaranteed profit. Semi because the bond doesn't mature this year (but maybe you can find one that does) and a greek default doesn't necessarily imply an exit from the eurozone. Also, the market at betfair is not very liquid; it will take a while before you can hedge even a small bond position.

(For full disclosure/fairness, I own greek bonds and have a partially offsetting position at betfair)

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