[The establishment] needs no reminder of the historical record, but it bears noting that more than a dozen advanced economies received debt relief in one form or another during the depression of the 1930s. The approach to unwinding current debts is likely to vary considerably across countries, but it is time to place greater emphasis on debt restructuring (which comes with a menu of options) than on accumulating more debt.
After yesterday's "Hillary rally" in the US, the overnight's session has seen more risk-on sentiment as European stocks advanced, ignoring weakness in Asia as investors followed every twist of shares of beleaguered lender Deutsche Bank, whose CEO last night assured Bill readers that the bank is not seeking a bailout, which however was contradicted by a Zeit article this morning reporting that Germany may seek as much as s 25% "bailout" stake in a worst case scenario.
After a struggle to repay its debts since 2015, Guangxi Nonferrous Metals Group, a regional Chinese state-owned metal producer, has finally been declared bankrupt by a Chinese court, becoming the country’s first interbank bond issuer to fail. It is also China's first bankruptcy case in which a state-owned company has liquidated.
We are accustomed to looking at Europe’s woes in a purely financial context. This is a mistake, because it misses the real reasons why the EU will fail and not survive the next financial crisis. We normally survive financial crises, thanks to the successful actions of central banks as lenders of last resort. However, the origins and construction of both the the euro and the EU itself could ensure the next financial crisis commences in the coming months, and will exceed the capabilities of the ECB to save the system.
Readers who wish to track the fate of Hanjin's "ghost ships" in real time - as it looks likely that many of them will remain stuck in legal and financial limbo for a long time - can do so courtesy of the following Platt's interactive map.
Moody's has caught up to what readers of Zero Hedge knew half a year ago. According to the rating agency, creditors of energy exploration and production companies that went bankrupt last year recouped less than half the usual amount for their claims, and 2016 is shaping up just as bad. Moody's even went so far as to even use the "C" word: "Recovery rates for 15 U.S. E&P bankruptcies averaged a “catastrophic” 21 percent last year, well below the historical average of 59 percent."
The fallout from last week's historic bankruptcy of one of the world's biggest shipping lines, Hanjin Shipping, has found little resolution with as much as $14 billion worth of cargo stranded at sea: conditions are "bordering chaos," said the CEO of SeaIntelligence Consulting in Copenhagen, while the Hanjing shipping labor union added that "our ships can become ghost ships."
Greece is once again facing a bailout standoff with its creditors as eurozone countries have refused to release additional funds to Athens this month. Athens has infuriated its Euro peers because it has so far passed just two of the 15 reforms that were a condition of last year’s rescue package, and yet demands full payment. For now, Europe has said enough.