UNFORTUNATELY, BANNING THINGS OR MAKING THEM “UNTRADEABLE” DO NOT MAKE PROBLEMS GO AWAY, IN MY OPINION. THE BAN SMELLS OF DESPERATION, CONFUSION & POPULISM AGAIN IN MY PERSONAL OPINION.
Written on May 19, 2010 by ozan
WHAT DO I THINK HERE? UNFORTUNATELY, BANNING THINGS OR MAKING TH
EM “UNTRADEABLE” DO NOT MAKE PROBLEMS GO AWAY, IN MY OPINION. TH
E BAN SMELLS OF DESPERATION, CONFUSION & POPULISM AGAIN IN MY PE
RSONAL OPINION.. I was in a “risk off” mood yesterday morning; s
o my view at the moment should be obvious. For the moment, there
are other countries and banks who can still trade EU CDS..My pr
ediction and already observation is that Sov CDS will rally mass
ively and Fins spreads will widen..Euro swaps opened with all si
gns of stress and Euro, the main asset you can short, is still u
nder siege.. ** In this type of uncertainty, vol should spike up
. And higher vol most usually means lower asset prices. **In EM
specifics, Sovx EM is 10 bps wider.. Turkey’s conveniently on ho
liday. South Africa benchmark bond is also 10 bps weaker. Risk off
