The Four Italians Sketch

Spain and Italy spreads are trading wider but not as wide as they were on Thursday morning when the media were running with apocalyptic headlines along the theme of ‘Italian 10y yields tear higher to 2.71%’. These caused my screen to need a wipedown from the coffee expelled at the thought. A thought that can best be described by the Monty Python 'Four Yorkshiremen' Sketch,



Which really needs to be rewritten as four Italian bond traders:

FIRST ITALIAN:
Si, very tradable, that, very tradable bit of convertible.

SECOND ITALIAN:
Nothing like a good dose of liquidity , eh, Marco?

THIRD ITALIAN:
You're right there, Riccardo

FOURTH ITALIAN:
Who'd have thought three year ago we'd all be sittin' here trading 10yr on a 2% handle, eh?

FIRST ITALIAN:
In them days we was glad to get a price on a BTP

SECOND ITALIAN:
An off the run BTP

FOURTH ITALIAN:
Without a broker

THIRD ITALIAN:
Or a bid

FIRST ITALIAN:
In an offered market

FOURTH ITALIAN:
Oh, we never had a market. We used to have to pay a broker 25bp just to take our line and then trust their price.

SECOND ITALIAN:
The best we could manage was to call a local bank and threaten to close them if they didn’t buy 'em.

THIRD ITALIAN:
But you know, we were happy in those days, though we didn't trade USTs.

FIRST ITALIAN:
Because we didn't trade USTs. My old Papa used to say to me, “liquidity doesn't buy you happiness, son".

FOURTH ITALIAN:
Si, 'e was right.

FIRST ITALIAN:
Si, 'e was.

FOURTH ITALIAN:
I was happier then when no one cared. We used to trade in this bank with great big holes in its balance sheet.

SECOND ITALIAN:
Bank?! You were lucky to trade in a bank! We used to trade out of one boiler room, all twenty-six of us, no screens, 'alf the floor were drunk, and we were all 'uddled together in one corner for fear of regulator finding us.

THIRD ITALIAN:
Eh, you were lucky to have a boiler room! We used to have to trade our own accounts giving 50% to rent the desk space.

FIRST ITALIAN:
Oh, we used to dream of trading our own accounts! Would ha' been an investment bank to us. We used to trade for the central bank in an old water tank on a rubbish tip. We got woke up every morning by having a load of rotting credit dumped over us

FOURTH ITALIAN:
Well, when I say ‘bank' it was only a one man treasury department of a quasi-state credit-fraud scheme hidden behind a holding company but it were a bank to us.

SECOND ITALIAN:
We were fired from our quasi-state credit fraud scheme we 'ad to go and sell to the Chinese.

THIRD ITALIAN:
You were lucky to have the Chinese! There were a hundred and fifty of us working on getting away just a fraction of the 1yr Issue to some fool in a real money account in Scotland.

FIRST ITALIAN:
1 year?

THIRD ITALIAN:
Si

FIRST ITALIAN:
You were lucky. We traded the 3yr on the Italian corporate issuance desk. We used to have to get up at six in the morning, print the paper, make up bullshit, go to work on our dumbest investors, fourteen hours a day, week-in week-out, for 10cents a week, and when we didn’t get any out our boss would thrash us wi' his belt.

SECOND ITALIAN:
Luxury. We used to have to get in the boiler room at six o'clock in the morning, mismark our books, get given in-house balance sheet stuff as Greece went tits up, work twenty hour day, for 2c a month and get told by the sales desk the client needed mid... if we were lucky!

THIRD ITALIAN:
Well, of course, we had it tough. We used to 'ave to get onto issuance desk at twelve o'clock at night and lick investors' arses with tongue. We had no screens, or brokers, worked twenty-four hours a day, got told to fix EURIBOR, and when we got home some German would say something about fiscal discipline.

FOURTH ITALIAN:
Right. I had to get rid of 100 yards of new issuance five minutes after ECB said no help needed and 10yr went through 7%, I had the Finance Minister calling to tell me if I failed I’d be lucky if it was only a horse's head in my bed, I had the US investment banks taking down my trousers and surgically implanting their oversized positions, the CDS desk would be stuffing me, I got no sleep, the tax man took my Ferrari, the ex-Prime Minister took my wife and at the end of the day the Bundesbank would kill us with some stupid statement and dance about on our graves singing Hallelujah.

FIRST ITALIAN:
And you try telling the young of today that 2.71% 10 yr is nothing to worry about ..... they won't believe you.

ALL:
They won't!