How can we all make money from the Portuguese/Spanish debt crisis?

[MajorDutch]

There are some smart people on this forum. Has anybody got any ideas on how to play the unfolding debt crisis in Portugal and Spain? Spain has a big refinance coming up.

Could there be a play on the indices, individual stocks/sectors or indeed any of the government debt markets.

 

[Martinghoul]

Huh? I think you're a bit late to this party, senor...

 

[TheBramble]

Huh? I think you're a bit late to this party, senor...

Shhhh...when an opportunity presents.....

 

[TheBramble]

There are some smart people on this forum. Has anybody got any ideas on how to play the unfolding debt crisis in Portugal and Spain? Spain has a big refinance coming up.

Could there be a play on the indices, individual stocks/sectors or indeed any of the government debt markets.

Good thinking.

I suspect property will balloon once the refinancing comes through and if you are able to get in now, at any price, on beach-front villas, you’ll make an absolute killing.

Look, I wanted to keep this for myself, but I’m really tied up at the moment. I have a friend who for personal reasons wants to sell now, quickly even though he knows he’s losing out big time by doing so.

If you’re interested, I could put the two of you together. But I don’t think he’ll let you have more than one, well, certainly not all of them, and others are putting in offers already, above the asking price and he’s going to close the door on any more offers in 24 hours. But as I say, he’s a personal friend and he may just let you have the entire lot at asking price if I put in a word.

Would you like me to talk to Snr. Brambelinio for you?

 

[MajorDutch]

ha ha made me chuckle. is there a spanish property etf that I can short all the way to the bottom?

@martinghoul - late to the party yes but I think there is still some meat left in it.

Good thinking.

I suspect property will balloon once the refinancing comes through and if you are able to get in now, at any price, on beach-front villas, you’ll make an absolute killing.

Look, I wanted to keep this for myself, but I’m really tied up at the moment. I have a friend who for personal reasons wants to sell now, quickly even though he knows he’s losing out big time by doing so.

If you’re interested, I could put the two of you together. But I don’t think he’ll let you have more than one, well, certainly not all of them, and others are putting in offers already, above the asking price and he’s going to close the door on any more offers in 24 hours. But as I say, he’s a personal friend and he may just let you have the entire lot at asking price if I put in a word.

Would you like me to talk to Snr. Brambelinio for you?

 

[BlackBison]

There are some smart people on this forum. Has anybody got any ideas on how to play the unfolding debt crisis in Portugal and Spain? Spain has a big refinance coming up.

Could there be a play on the indices, individual stocks/sectors or indeed any of the government debt markets.

Yep go long the euro.. :cheesy:

 

[Martinghoul]

ha ha made me chuckle. is there a spanish property etf that I can short all the way to the bottom?

@martinghoul - late to the party yes but I think there is still some meat left in it.

Well, if you really believe it's all gonna go pear-shaped again, be short the IBEX vs the DAX, I guess. And be short Santander & BBVA. These would be the simple and stupid ideas that are likely to be wrong and kill you dead.

 

[MajorDutch]

Well, if you really believe it's all gonna go pear-shaped again, be short the IBEX vs the DAX, I guess. And be short Santander & BBVA. These would be the simple and stupid ideas that are likely to be wrong and kill you dead.

sorry I was asking for money making ideas not losing ideas. I can think of plenty of losing ideas.

 

[Jack o'Clubs]

sorry I was asking for money making ideas not losing ideas. I can think of plenty of losing ideas.

I think you've rather missed the point. An asset value discounts the probability weighted outcomes of various events. What do you know about, say, the current valuation of Spanish banks, that the market is not already discounting? Can you make money from the situation, yes. Is it easy, no. Personally I'd be looking at IBEX puts, but again the current price accurately discounts the chance of it all going tits up. If you believe the market is assessing the probabilities inaccurately, then you can make money, but that's a big call.

 

[Martinghoul]

sorry I was asking for money making ideas not losing ideas. I can think of plenty of losing ideas.

Well, be more specific then... What precisely is the outcome you're trying to target?

 

[TheBramble]

A serious question. Fair enough.

Portugal is by far the more exposed. It has both a debt-to-GDP problem AND a budget deficit problem. Spain currently only has the latter.

Spain is massively exposed to Portugal. If Portugal goes, Spain goes. I don’t think there is any doubt about that. However much they’ve tried (quite well as it happens) to shore up their banking and budget issues. As Spain currently stands fairly strong in comparison I’m guessing (it really is a guess) the short side has not been fully calculated to encompass a major fall, whereas for Portugal, I’m fairly certain it has been.

The bigger picture of course is that there are insufficient bail-out funds available in the Eurozone to accommodate a bail-out to both countries at the same time. If Spain feels Portugal is going to go (and end of this month or before would be crunch point) and if the private levels of confidence do not match those publicly espoused and their confidence in their ability to handle their situation within current measures is not unequivocally strong (I don’t believe it is). they may well make a grab for the loot ahead of their neighbours.

Trichet is well enough aware of this and the likely calls on Euro over the next few weeks which is why the expected rise to 1.25% tomorrow may well be only the minimum if he wants to get the coffers enriched before the fit hits the shand.

Either way, if you’re going to short one or the other and you want value, Short Spain, not Portugal.

 

[MajorDutch]

A serious question. Fair enough.

Portugal is by far the more exposed. It has both a debt-to-GDP problem AND a budget deficit problem. Spain currently only has the latter.

Spain is massively exposed to Portugal. If Portugal goes, Spain goes. I don’t think there is any doubt about that. However much they’ve tried (quite well as it happens) to shore up their banking and budget issues. As Spain currently stands fairly strong in comparison I’m guessing (it really is a guess) the short side has not been fully calculated to encompass a major fall, whereas for Portugal, I’m fairly certain it has been.

The bigger picture of course is that there are insufficient bail-out funds available in the Eurozone to accommodate a bail-out to both countries at the same time. If Spain feels Portugal is going to go (and end of this month or before would be crunch point) and if the private levels of confidence do not match those publicly espoused and their confidence in their ability to handle their situation within current measures is not unequivocally strong (I don’t believe it is). they may well make a grab for the loot ahead of their neighbours.

Trichet is well enough aware of this and the likely calls on Euro over the next few weeks which is why the expected rise to 1.25% tomorrow may well be only the minimum if he wants to get the coffers enriched before the fit hits the shand.

Either way, if you’re going to short one or the other and you want value, Short Spain, not Portugal.

at last someone with a sensible post. thanks bramble. I am going to do some research....

 

[brewski1984]

Surely us retail traders will always be too late to profit from things like this, we hear about this sort of news well after the important people?

 

[scose-no-doubt]

niet

 

[marbig]

A serious question. Fair enough.

Portugal is by far the more exposed. It has both a debt-to-GDP problem AND a budget deficit problem. Spain currently only has the latter.

Spain is massively exposed to Portugal. If Portugal goes, Spain goes. I don’t think there is any doubt about that. However much they’ve tried (quite well as it happens) to shore up their banking and budget issues. As Spain currently stands fairly strong in comparison I’m guessing (it really is a guess) the short side has not been fully calculated to encompass a major fall, whereas for Portugal, I’m fairly certain it has been.

The bigger picture of course is that there are insufficient bail-out funds available in the Eurozone to accommodate a bail-out to both countries at the same time. If Spain feels Portugal is going to go (and end of this month or before would be crunch point) and if the private levels of confidence do not match those publicly espoused and their confidence in their ability to handle their situation within current measures is not unequivocally strong (I don’t believe it is). they may well make a grab for the loot ahead of their neighbours.

Trichet is well enough aware of this and the likely calls on Euro over the next few weeks which is why the expected rise to 1.25% tomorrow may well be only the minimum if he wants to get the coffers enriched before the fit hits the shand.

Either way, if you’re going to short one or the other and you want value, Short Spain, not Portugal.

At last. An intelligent answer. Well done to TheBramble :clap:
After wading through some of the other threads here, I was coming to the conclusion that this forum is a waste of space.

 

[Jack o'Clubs]

At last. An intelligent answer. Well done to TheBramble :clap:
After wading through some of the other threads here, I was coming to the conclusion that this forum is a waste of space.

Certainly, Bramble's post is intelligent. His usually are. More so than the OP deserved I would say, as he declined to make any contribution to the thread in terms of his own thoughts. You'll generally see on here that questions get answered with the respect they merit and if you just want no-thought-required tips then try The Racing Post.

Ignoring my contribution (where I do suggest looking at IBEX puts, FWIW), Martinghoul's posts contain far more information than you or the OP appear to appreciate. Post #7 in particular pretty much sums up the whole situation in a couple of lines if you bothered to try to understand it.

 

[MajorDutch]

Certainly, Bramble's post is intelligent. His usually are. More so than the OP deserved I would say, as he declined to make any contribution to the thread in terms of his own thoughts. You'll generally see on here that questions get answered with the respect they merit and if you just want no-thought-required tips then try The Racing Post.

Ignoring my contribution (where I do suggest looking at IBEX puts, FWIW), Martinghoul's posts contain far more information than you or the OP appear to appreciate. Post #7 in particular pretty much sums up the whole situation in a couple of lines if you bothered to try to understand it.

oh bless I didn't answer the thread in the way you wanted and you had a tizzy. another thread derailed.... you sound like a thoroughly nice chap. lol...

 

[TheBramble]

Come on Gents...It was going so well...LOL

So, did you check out the models on Spain this morning? Wished you'd done it yesterday? LOL.

 

[scose-no-doubt]

Come on Gents...It was going so well...LOL

So, did you check out the models on Spain this morning? Wished you'd done it yesterday? LOL.

I did.

 

[BlackBison]

at last someone with a sensible post. thanks bramble. I am going to do some research....

My post about going long the euro was serious too..