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Archive for April, 2010

Bloomberg is reporting this morning that the interest rate on a 3-month Greek bond has reached high double digits: between 15% and 21%, depending on which markets you’re quoting.

It’s all over for Greece unless they get bailed out. Their only option now is to pull out of the Euro, default on their debt, and issue new currency. Stay tuned.

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Its sovereign debt is coming under extreme duress, the brain trust managing the Greek Financial Meltdown come up with a shockingly poor idea: prevent shorting Greek bonds.

Traders said the decision meant that any uncovered short positions on Greek government bonds would have to be covered, regardless of the price, at the end of the settlement day in the repo auction.This would make it more difficult to short Greek bonds but might end up affecting market makers more than others, according to some traders."It will not kill off liquidity, but it will raise costs a bit," a source at a primary dealer said. (emphasis mine)

http://www.reuters.com/article/idUSLDE63729N20100408

I predict that “a bit” in this case will translate into “more than all the money in the Greek Treasury’s coffers.”

ZeroHedge chimes in as well with some scathing commentary:

In their last solvent days, the Greeks sure are learning fast from the US – first America makes shorting prohibitive (and where it is still possible, various repo desks tend to force short covering at their whim just as the market is about to crash and burn), and now Greece has proceeded to make shorting of Greek bonds impossible. After realizing that its CDS scapegoating campaign was the most miserable and idiotic plan ever conceived, the lunatics who have taken over the Greek insane asylum have now decided to make shorting of GGBs virtually impossible. This is ostensibly the last step before the total collapse as the liquidity that will be removed will make swings in GGB so big it will make the holders of options in FNM, FRE, C and AIG green with envy.

Greece is rapidly becoming a case study in everything crazy that America will try to pull off once our own curtain is pulled and the magician-cum-emperor behind the curtain (Ben Bernanke of course) is finally shown to the general public in his entire naked splendor.

http://www.zerohedge.com/article/greece-proceeds-make-bond-shorting-impossible

Why is this such a shockingly bad idea? Because the CDS writers hedge their positions by shorting the bonds. Prevent the shorts, and the CDS writers go home. When the CDS writers go home, Greece finds that it’s current 7.5% interest rate is an incredible gift, and that it can’t function when the cost of borrowing is in the double digits.

Don’t read me wrong, there’s no glee here – Greece is just the next domino to tip.

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Cool stuff – an eclectic musical style not quite like anything I’ve heard before. Kind of Klesmer, kind of madrigal, kind of dissonant jazz. I’m a bit reticent to even try to classify it – just give it a listen and decide for yourself.

http://babybluearts.com/PoorNobodys.htm

And the link – Chris Becknell, on violin, provides music instruction for Quinn (violin) and Kelty (guitar).

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Well, we’re back. We survived the cross-country return to Minnesota. Road trips fit our family well.

Came across this photo in the big picture dump at the end of the trip. It just flashed on the screen during one of those random screen saver moments. I think it sums up the Hilton Head experience pretty well. A bike, a beach, a kid, a sunset. Nothing more planned than that, it just was what it was.

That might not mean anything to you, unless you’ve taken a lazy beach vacation.

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