Sovereign Debt

Tyler Durden's picture

State Of The States: New Jersey's Problems Are Not "Mathematically Solvable"





While the warning flags are raging in Illinois and Connecticut, JPMorgan's Michael Cembalest states that New Jersey's problems are "not mathematically solvable." The stunning admission from a status-quo-sustaining bank that is “very focused on the total indebtedness of US states," should be worrisome enough but as Cembalest explains the answer to a debt problem is not always piling up more debt - "when debt reaches a certain level, the can kicking is over and difficult decisions need to be made;" the issue is to address the root of the problem, which can be a delicate and at times politically incorrect topic.

 
Tyler Durden's picture

Trumped! Washington's Fiscal Hypocrisy Is Too Rich For Words





You have to love it when one of Donald Trump’s wild pitches sends the beltway hypocrites into high dudgeon. But his rumination about negotiating a discount on the Federal debt was priceless. No sooner did the 'unschooled' Trump mention out loud what is already the official policy of the US government than a beltway chorus of fiscal house wreckers commenced screaming like banshees about the sanctity of Uncle Sam’s credit promises.

 
Tyler Durden's picture

US Treasuries Account For A Stunning 60% Of All Global Positive Yielding Debt





Here is why US yields are, if anything, set to decline more: on the other hand, the US accounts for almost 60% of all positive yielding debt and 89% of the positive yielding debt which has a tenor less than 1YR (Figure 4). Also, US debt accounts for 74% of the positive yielding G10 debt in the 1 – 5YR sector.

 
Reggie Middleton's picture

First, It Was "Fu$k the Fundamentals", Now "It's Fu$k Contracts, Too" - Negative Rates Are Doing So Well in the EU!





Oh, this is going to get messy - and as it doe the sell side will likely try to trow a positive (as in buy our inventory) spin that may trap a Muppet or two. But hey, that's the business model, no?

 
Tyler Durden's picture

Satyajit Das Is "Astonished Investors Haven't Raised Pitchforks At Policy-Makers"





"They’re going to have to stop people from taking out cash... I would argue that it’s not going to be able to be dealt with, and it creates enormous social and political pressures… What we’re going to see is a period of financial repression, which is very, very dangerous... I honestly don’t know how it’s going to end. In the 1920s and 1930 when similar pressures built up, it didn’t actually have a very good ending."

 
Tyler Durden's picture

These Are The 8 Triggers For A New Financial Crisis





In reality, it will not be a single factor but an unexpected concatenation of events, that result in a financial crisis, driving global contagion and an economic slowdown.

 
GoldCore's picture

Gold “Chart of The Decade” – Maths Suggest $10,000 Per Ounce Says Rickards





James Rickards, economic and monetary expert, joined Bloomberg’s Francine Lacqua on Tuesday to discuss the gold “chart of the decade”, his new book “The New Case for Gold,” why gold is money and why gold is going to $10,000/oz in the coming years.

 
Tyler Durden's picture

It's The Debt Stupid: Scotiabank Warns "At Some Point 'The Future' Becomes 'Today'"





Low interest rates attempt to buy time. The idea is to bring consumption forward until the economy heals on its own as capital projects are completed. But those projects never began this time. The end result is ever-higher debt that borrows more and more from the future. Unfortunately, it borrows from the future without making the future any brighter through solutions to root causes of economic ailments. At some point, the “future” becomes “today”.

 
Tyler Durden's picture

Malaysian Ringgit Tumbles After 1MDB Default Raises Spectre Of Sovereign Failure





Update: after widening by 2bps earlier, Malaysia CDS is now +4 at 167bps and starting to move as macro "analysts" finally catch up on the entire story and comprehend the implications.

Malaysian CDS rose to near 3-month highs and the Ringgit has spiked over 300 pips - back near recent lows - after the Malaysian slushfund government investment fund 1MDB is reportedly in default. This is exactly the scenario we laid out last week that initially sent the currency lower and CDS higher, as the Abu Dhabi sovereign wealth fund has by all appearances started a potential waterfall default on Malaysian sovereign debt (due to cross-default triggers at the sovereign).

 
Tyler Durden's picture

Wall Street's Lemmings Have Almost Reached The Cliff





The fact is, Simple Janet has already proven the end game. Money printing central bankers can’t stop. Were they to allow financial prices to normalize and trillions of bad credit to be liquidated, the whole financial house of cards they have built around the planet would blow sky high. The "soft landing" case is a null set.

 
Tyler Durden's picture

Why Negative Rates Are Positive For Gold





In the first 14 weeks of the New Year, gold rose 16%. The first quarter qualified as its best beginning year performance in 30 years (CNBC, E. Rosenbaum, 4/14/16). The reversal was prompted by stumbling stock markets and a series of sharply dovish turns from central banks around the world. Perhaps the main reason people buy gold is as a hedge against inflation. But uncertainty and fear contributed undoubtedly to gold’s stellar first quarter rise. But will it continue?

 
Tyler Durden's picture

Hungary Issues Sovereign Bonds Denominated In Yuan: Another Nail In US Reserve Currency Status?





Hungary priced the three-year bond at a yield of 6.25%, raising 1 billion yuan ($154 million), a small size for a sovereign deal. Bankers not involved in the transaction estimate that if Hungary issued debt in U.S. dollars and swapped the proceeds into yuan, it would have paid almost 1% less in annual interest costs. The dim-sum market isn’t an appealing market right now. Issuance of offshore yuan bonds has been falling consistently since Beijing’s decision to devalue its currency by 2% in August last year—the prospect of another yuan devaluation has sapped much of the appeal of such bonds for offshore investors.

 
Tyler Durden's picture

Frontrunning: April 15





  • Global stocks, dollar and oil cool ahead of Doha meeting (Reuters)
  • Oil Falls Before Doha as Global Markets Brace for Weekend Risk (BBG)
  • China Growth Slows; Revival Policies Appear to Gain Traction (WSJ)
  • White House hopefuls Clinton, Sanders joust in Brooklyn brawl (Reuters)
  • Trump talks up 'New York values' as protesters demonstrate against him (Reuters)
  • Sanders Can’t Clarify Wall Street Plan in Testy Clinton Debate (BBG)
 
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