With the EUR imploding following the recent note out of witchhunt target
extraordinaire Egan-Jones, and the apparent inability of the ECB to handle the
sandtrap on the 18th (they were supposed to announce the magical mystical
bailout announcement 20 minutes ago), it makes sense to check up on the most
recent InTrade odds for a [Insert first two/three letters of a peripheral
European country]-xit, or, technically, the odds"Any country
currently using the Euro to announce intention to drop it before midnight ET 31
Dec 2012." As of minutes ago, this number was 40%. This, however, appears to be
a simple Fibonacci retracement to the all time high of 60% seen last November.
And while we don't have an opinion one way or another, this level certainly
provides pair trade opportunities: recall that according to Buiter, Greece is
out by January 1, 2013, so technically a 100% probability, while the ECB gives
0% odds of a Grexit, ever. In other words, two pair trades of Buying ECB while
Shorting InTrade, and Buying InTrade while Shorting Citi, virtually guarantees
profits.
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