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No, it wasn't quite like that. It wasn't about collateral. I can explain with a metaphor if you like.

1) Yes 2) Yes, but it wasn't MFG's problem 3) No, there isn't really a move that discontinuous. CDS had value before the referndum news because the mkt was pricing some uncertainty. So yes, Greek CDS does move, but it doesn't move from 0 to 100pts upfront in a day. 4) I don't know. I don't...

That's unfair. You're describing German bankers, not Germans.

It's not really bonds... It's funding, i.e. cashflow issues, that cause failures of financial institutions. So nothing too strange about it.

BOTS, CTZ, CCTeu and BTPS... I hear they're all going cheap these days.

Well, guess what happened? He also happened to believe that it was a great time "to make fortunes in ... trading with virtually no risk at all".

Isn't that pretty much what Jon Corzine's been saying for the past few months?

It's been mis-quoted... The rumor, which in itself is highly suspect, was that China was going to contribute CNY 700bn, not €700bn.

Yep, that was the killer in the case of MFG, just like it was for Bear, as I mentioned on the other thread. Moreover, the real irresponsibility lies in not being able to recognize that the outright position and the repo trade are one massive over-leveraged punt, rather than two different trades.

I see it quoted negative everywhere I look, so I guess it's just a matter of ICAP being an outlier and not quoting using the normal convention.

Well, to be honest, it does matter a lot whether we're talking about Germany or others. Generally, I guess I'd agree w/ole Bill that you want to own the belly of the curve the most, but timing and where you get into it matters A LOT. 2s5s10s fly in JPY is arnd -40 (5y rich to wings); in EUR...

But you're still assuming throughout that it's deterministic?

I suppose anything and everything is possible once the shareholders are fully wiped out. That is, if you're an executive, you can dispose of assets for pennies, if you're so inclined. But you'd better be ready for some tasty lawsuits, if you do that sort of thing. It's all a bit murky...

This must be the best headline of the day, surely? 12:16 EST - *S&P DOWNGRADES MF GLOBAL HOLDINGS TO 'D' Oct. 31 (Bloomberg) -- Removed from creditwatch negative.

No, but the FX shags in the mkt can tell... There's a way to tell who's on the bid in the electronic systems.

I hate to quote ZH, but he's spot on, in this case... @zerohedge: The only good to come out of today's bankruptcy is that Bove may finally learn there is this thing on the balance sheet called "liability". The company is filing because, how do I put it gently... let me see... wait for...

Just to clarify... The business model is you lend cash term and borrow overnight, which is all fine and dandy until you can't do the latter. When you get yourself into that situation, you're dead.

Of course they intervened...

What a tool he is...

Nah, they also had a business where they financed other people's peripheral debt positions. And that's, basically, Bear Stearns all over again.