EM: selling our forward for the last 30yrs... Obviously this isn't investment advice.
Apr 19, 2023 • 5 tweets • 2 min read
Why you should be investing in hy dodgy #EM bonds... (bc you have leeway to be wrong!) A long thread...
Assume an equal cash weighted basket of:
Egypt 8.875% 50 @ 55c
Buenos 5.25% 37 @ 34.75c
Ngeria 8.25% 51 @ 63.5c
Pkstan 7.875% 36 @ 37.5c
Pemex 7.69% 50 @ 69c
1/n
Assuming no leverage and no cost of carry. I run a scenario analysis where Pakistan defaults after 1yr, Egypt defaults after 2yrs and Buenos defaults after 3yrs. I assume I sell the defaulted bonds at 30c after they default.
2/n
Nov 20, 2022 • 4 tweets • 1 min read
In honour of the World Cup, the second installment of 'EM Tales that will never happen ever again'
The year is 2010 and the South Africa World Cup is about to start, so a market maker in EM Credit starts sending out Odds on each team...
1/n
He sends a full run for everyone to have the opportunity to bet for or against each team in the tournament. Colleagues, clients and even other bank market makers start to get involved! 1000s of dollars exchanging hands and live updated markets being sent around every 15min... 2/n
