Wednesday, May 5, 2010

Huge Bets on Euro Core Zone Meltdown

There was a stunning $630 million, $558 million and $370 million in net notional derisking last week. Huge negative bets were made on France, UK and Germany, not just in sovereigns but in all names, reports ZH.

The greatest non-sovereign derisker in the last week? Goldman Sachs, with $175 million.

This is extreme panic, worse than September 2008, when the money market Reserve Fund broke the buck.

It is quite possible the PIIGS don't survive without default, but the UK isn't going that route. The UK is in a completely different situation. It controls its own money so it can print its own way out of their debt hole. This is very inflationary, but it is likely what they will do, rather than default.

Further,  there is also no reason to bet against private triple A German debt. The German economy will survive.

Crisis breeds opportunity. Stay alert.


  1. When you use the racist term PIIGS, which countries are you talking about?
    Also would be interested to hear your comments on how a default would proceed?
    and lastly, How ethical is it to loan money to a person, country or entity and then do everything possible to ensure failure to repay?

  2. "When you use the racist term PIIGS"

    Racist? Lord help me....let me guess you are a card carrying member of the Hope and Change crowd. Or as I prefer Dope and Lame.

    Racist...are you kidding me lady. This is the most unbiased blog I frequent Robert does a great job of posting facts not BS...

    Why are Liberals so full of hate.

  3. Umm .. PIIGS refers to Portugal Italy Ireland Spain

    Who said those betting against loan repayment were necessarily the ones holding the debt to begin with?

  4. pigs is a racist term