Boaz's position on Greece

[Soon2Bgreat]

Quote from atticus:

So the article implies he's arbed (or marked currently) to +300 basis? I find it odd that the stuff is entirely fungible.

This was where I got confused. The implication is currently positive basis (or maybe I'm even wrong there), but he's known for neg. basis blowups (DB) - perhaps he's already in the black?

 

[sle]

Quote from Soon2Bgreat:

This was where I got confused. The implication is currently positive basis (or maybe I'm even wrong there), but he's known for neg. basis blowups (DB) - perhaps he's already in the black?

My understanding is that he blew up on the cash/CDS basis, coming from someone who was working for him at DB and is still working for him.

I think his current Greek position is a great trade - carries right and has limited losses in case of default. He might have some MTM pain should Greece ever become a true bond market again (because of duration vs JTD mismatch), but if there is a improbable event that would be it.

 

[Soon2Bgreat]

Quote from sle:

He might have some MTM pain should Greece ever become a true bond market again

By returning to a true bond market do you mean one where participants prefer to take credit exposure through cash bonds rather than CDS (in turn pushing the basis more positive)?

Thanks.

 

[Spearhead]

Anyone know the implications of the current rescue plan (50% haircut on Greek bonds) on this trade?

 

[Martinghoul]

Quote from Spearhead:
Anyone know the implications of the current rescue plan (50% haircut on Greek bonds) on this trade?

Well, given we don't actually know exactly what the trade is, it's very hard to know the implications of PSI on it.