Posts by "macrosam"

4% has been a level of support specifically for Asian buyers. I expect some backing up of rates after this week's front-end auctions as room will have to be made for the upcoming (two weeks) auction of 3s, 10s, and 30s.

Although it did not come with a loss (rather a decent gain), I was wrong and am covering my short position. I am not saying that Greece and the rest of the EU are out of the woods, but I will not be betting against them at this point any longer (though I will be opportunistically watching!).

Note that these are only my rationale and I realize I could very well be wrong.

1) Any bailout package has to be led by the IMF, but must include EU participation as well. This creates a very difficult proposition, in my opinion. The IMF will come in senior to the EU, which will be a tough sell, assuming the EU can even participate legally in any form of bailout, IMF led or not.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7591027/Greek-aid-in-doubt-as-German-professors-prepare-court-challenge.html

The EU part of the bailout is not yet ready, assuming it will ever be ready.

2) The U.S. has veto power at the IMF and will likely not allow a bailout until the EU portion is committed. See #1 above. The U.S. will see the responsibility of assisting Greece as being the EU's.

3) Even if #1 and #2 occur, the IMF will likely impose harsher austerity measures on Greece than the ones currently in place. See Latvia (2009). Greece will resist even more than they already are now.

4) The May 19 deadlines does not address CURRENT nor does it address future bills. It is to repay money already spent. The realization of this will set in even deeper the closer we approach and the more difficult bailout coordination becomes.

Enough of these monkey shines.

GGB yields
1y 6.52
2y 10.22 !!!
3y 9.87
4y 9.79
5y 9.46
6y 9.27
7y 9.10
8y 8.85
9y 8.90
10y 8.66
15y 7.83
20y 0.00

Depending on how far we rally during the U.S. hours, that is.