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Well, the exchange rate will be set by the FX mkt, no? Conditional on EUR breeakup, where would you make me a mkt in the NDEM/EUR cross?

Hmmm, whatever other valid points this article mentions, surely it's meaningless to offer a number for the liabilities, without providing an estimate for the assets currently held against these liabilities?

If you do bank bills (IRs), you're running a lot of risk and your hedge is potentially worse. I'd look into the Aussie bond futs, if I were you (along the lines of what was suggested earlier). There's a lot of threads on the subject here, generally.

The explanations offered in this article are, by and large, incorrect, in my view.

Well, I don't know if it's a good trade or a bad trade. If you have other ideas on how an investor can potentially end up with a NeueDEM-denominated asset in the case of EUR breakup, pls don't keep it all to yourself and share. I don't really understand, in general, why people are so up in...

Yes, you can, obviously... You hold on to it, because you think you might be holding a NeueDeutschmark-denominated asset (and paying for it in EUR).

I see all sorts of mistakes in this article (I think you posted the wrong link; should be http://in.reuters.com/article/2012/01/10/column-markets-saft-idINDEE80906X20120110?type=economicNews). The specific argument doesn't make much sense and neither does the overarching statement.

Speaking of the devil, the SNB is in the fwd mkt this morning.

Whatever you say, mate...

Haha, touche!

5k is decent size for a quiet day like today, without any big periph news. And no, there's all sorts happening, including basis, believe it or not. Of course, mostly it's just people getting in and out of periphs.

Indeed! Truly stunning insight right here, innit? I guess we've all underestimated bwol, haven't we? Must be the CFA curriculum (as well as the Wheaties he had this morning)...

I hear of a lot of RM guys in bunds (from all over the place, especially Scandis). Large clips are crossed all the time and they have also done pretty damn well with the re-introduction of the BTP futures, where there's actually pretty decent liqudity these days. So, again, I can't speak about...

You might. An institutional investor one of whose main concerns nowadays is counterparty exposure won't. And that means Citi (or whoever) is gonna miss out on a whole lot of biz. As I said, I don't buy it. In my world (rates), there's just no alternative to Eurex for certain products.

Knowing how things are done isn't edge, it's just standard, tried and true statistical methods (Hamilton's "Time Series Analysis" is a brick of a book with very good reason). Edge is the stuff above and beyond that truly allows you to distinguish the signals generated from white noise. Well...

'Cause all the mkts I am aware of, pretty much across asset class and location, are trying to get away from proprietary, bi-lateral trading venues. Central Counterparty (CCP) clearing is what everyone wants these days, so I find it hard to imagine that the Eurex biz is moving to Citi's...

I find that incredibly hard to believe...

Could be... Let's see what transpires. I am stil short CHF, so I guess I am talking my book here. Not sure about that... My impression is that Jordan (the interim head) is more aggressive, if anything (just based on his comments/speeches). Danthine isn't a shrinking violet, either. Again...

Well, they have just said that they're committed to it (both the SNB and the govt). Let's see what occurs, shall we?

No worries... It's just that I think the heuristic/rule of thumb, imperfect as it may be, IS a lot more worthy of a discussion than the various mathematical facts, which are all, as you have stated yourself, neither here nor there. And I mean discussing the rule of thumb, as well as its...