Jean-Claude Trichet, proven the liar this blog always maintained he is!
“Speculating on Greece defaulting is a sure way to lose money, European Central Bank President Jean-Claude Trichet was quoted as saying in remarks released on Wednesday.
"Such a speculation would be a sure-fire way of losing money given the decisions taken last Thursday," Trichet told French magazine Le Point, according to a transcript of the interview provided by the ECB.”
And below is the outcome of that speculation that was such a 'certain way to lose money' according to Trichet – it was one of the best trades of the century, in all likelihood it is among the top trades in all of history. 5-year CDS on Greece were once available at a premium of a mere 44 basis points (this was back in 2007). Last week, they went out at 26,000 basis points, an increase of 59,000% in five years. The return since Trichet made the remark quoted above was 'only' 1,000%. As sure fire ways of losing money go, we could think of a few other trades, like buying Greek bonds 'because the EU will never allow Greece to default'
Labels: Jean-Claude Trichet