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MF GLOBAL (DE) Message Board

  • adeloach1 adeloach1 Nov 1, 2011 10:59 AM Flag

    What if sovereign bonds mature without..

    defaults. Anybody have ideas how that would play into the situation? How would that affect the balance sheet as far shareholders, if any?

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    • U.S. trusty will determine that now. My guess is that he liquidates at a major loss on those bonds.

      Wealth transfer complete. Crime complete.

      GS wins. Who is next? The game goes on until enough wiped out to leave the few survivors standing.

    • well,I think that is why the BK filing. it will give more options to MF to deal with they assets. I can only assume those bonds will stay where they are right now, (no buyers anyways) hope that Italy and Spain will be ok. But mostly, if you have MF stocks, you will be the last in line to get anything. and it doesn't look like MF has enough cash to settle with everyone.

      Only way I see you might get some money back is if China comes in to throw Europe a life line without much conditions. and eruos strengthing and all the eruo bond yields come down fast in the next few months,

    • Absolutely, I assume he was trying to sell the FCM to have liquidity for the bonds. So you think the bonds are still open to margin calls and will have to be liquidated as needed?

    • There is no money to pay off the bonds. The European nations have already agreed to forgive or forget as least 50% of thier debt. There will nothing left after all secured creditors are paid, if they get paid. Add the fact that 700 million is missing there is not a possibility that common gets anything. If you have the certificates sell them on EBAY.

    • I can only assume if it was possible for corzine to buy some time he would of done it by now. MF did try to sell parts of their business last weekend but failed. so they have no choice but to file BK to stop the bleeding. which I think 99.999999% common shares will be trading at pennies. especially when they can't find $700million in cash at this point. everything has a paper trail these days, if the SEC can't find that large amounts of money on the books, something fishy is happening.

    • I hear what you're saying but under BK will MF be forced to sell these bonds at depressed prices or can they hang on to them and ride it out? If they can and the EC eventually gets their house in order would there not be a substantial upside? I just don't have an idea how BK plays into those bond holdings. Will there still be margins calls as the prices go down under BK?

    • When they mature they roll them over. What if when they want to roll over, the rates are too expensive so the interest is not manageable. What kind of question is this? The question should be what if Europe and these particular countries like Greece and Italy actually get their fiscal house in order so yields fall and debt restructuring won't be so difficult.

      • 2 Replies to freedaaron
      • Maybe the world needs to slow down a bit when it comes to rating Sovereigns...or are they attempting to be the catalysts for global Curency change with GS taking the spoils and picking winners and losers. And wall street thought that Obama was picking winners and losers.

      • Right. The bet was on European sovereigns. The equivalent of U.S. Treasuries.

        Does anyone believe that U.S. sovereigns are any better off...if so what happens when the debt ceiling debate in the U.S. resumes.

        Any difference?

        MF wasn't a day trader in those Euro Bonds they were long. Day to day fluctuations did not force their bet....the ratings agencies short term opinion did.

        Fact is all paper investments at risk. If all paper at risk then so is the paper ratings agencies business. Based upon their logic they will.be downgrading themselves.

        Gold, commodities, oil, barter is all that is left. Can the world run that way?

        Can the world afford to adopt a day traders mentality in assigning risk allocation.

        Day trader just one little guy on margin. But Sovereigns? Only good for a day?

    • I trade mostly on technicals and with option spreads, been doing this for 4 years, and yes my account still positive.

      goes back to your question, on if the bond can not sell par. As the Italian bond yields kept raising, almost 10% alone today. which means people are dumping bonds faster than you can say "whats going on"

      Also who is going to holding on to billions of bad debt? while watching its value depleting by the minute?

      example, if you bought the italian bond last week for $100 and today you can buy it for $98, and knowing you have a good chance to buy the same bond next week for $90. will you still holding on to your crap bonds? dead money, regardless when it matures.

    • You my be right about the rest of the bonds losing value if the EFSF gets delayed in ratification.

      The longer this drags on the more expensive the final solution gets. Look at Greece as spreads escalated.

      If EFSF ratified those bonds are 100% safe and profitable.

    • MF Had no Greek debt. Italy has a long way to go to play out assuming that the Euro deal doesn't get done. MF holdings would have matured out by then.
      Next hot spot would be smaller, imo, like Portugal or Ireland. They would probably have sold that risk for a small loss.

      Bottom line is that if the EFSF fails to get ratified the Whole Euro collapses and takes the World down with it, including China and the rest of the BRIC nations.

      No One escapes a Euro failure.

      Unthinkable.

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