Sovereign Default

Brace Yourself For Italy's Bankruptcy

"The diagnosis is simply that Italy has become woefully uncompetitive, and as a result, is not solvent. This much is clear from the perilous state of its banking system, which is always the outcome when banks lend to firms that have been rendered uncompetitive by some reckless central banker..., This has to be the most well-telegraphed, and now inevitable, national bankruptcy that I have seen in my 45-year career."

Venezuela Escapes Bankruptcy… But Oil Production Continues To Plunge

Venezuela just dodged a bullet, pulling off a last minute bond swap with creditors. The deal only buys Venezuela a little bit of breathing room, and a default at some point next year or the year after is not out of the question. Either way, the South American OPEC nation’s oil production is falling and will only continue on a downward trajectory.

Venezuela's Gold Reserves Plunge To Lowest Ever As Maduro Repays Debt With Gold

Venezuela’s gold reserves have plunged to their lowest level on record after the country sold $1.7 billion of the precious metal in the first quarter of the year to repay debts. The country is grappling with an economic crisis that has left it struggling to feed its population.The OPEC member’s gold reserves have dropped almost a third over the past year and it sold over 40 tonnes in February and March. Gold now makes up almost 70% of the country’s total reserves, which fell to a low of $12.1 billion last week

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).

GoldCore's picture

European Banks holding European sovereign debt may have to take haircuts and be part of bail in plans should that same debt default, according to a plan being pursued by German government advisers. In another attempt to shelter German tax payers from the largess and excess of fellow European neighbouring countries' national banks, the move could trigger a run on billions of euro of sovereign debt of said banks. In an article penned by the Telegraph's Ambrose-Evans Pritchard, one of the council's dissenting members describes the plan as the "fastest way to break up the Eurozone".

dazzak's picture

THE SUM OF ALL FEARS

Because so much is riding on what so few decide,once the faith in the Central Banks fail, the chances of us getting out of this diminish every second...

Buyer's Remorse? Axel Merk Warns "The Fed Doesn't Have A Clue!"

"The Fed doesn't have a clue!" - We allege that not only because the Fed appears to admit as much, but also because our own analysis leads to no other conclusion. With Fed communication in what we believe is disarray, we expect the market to continue to cascade lower - think what happened in 2000. To understand what's unfolding we need to understand how the Fed is looking at the markets, and how the markets are looking at the Fed.

China Stocks, Credit Risk Worsen Despite "Short-Squeezed" Yuan Strength

On the heels of new reserve ratio regulations and the biggest strengthening in the Yuan fix in 4 weeks, offshore Yuan has strengthened notably (despite Chinese default/devaluation risk surging in the CDS markets). Chinese stocks are weaker in the early going but corporate bond yields continue to slide to new record lows as the "last bubble standing" stands ignorant of the risks around it.

Ukraine's Looming "19 Fukushimas" Scenario

With all the action in Syria, the Ukraine is no longer a subject for discussion in the West. In Russia, where the Ukraine is still a major problem looming on the horizon, and where some 1.5 million Ukrainian refugees are settling in, with no intentions of going back to what's left of the Ukraine, it is still actively discussed. But for the US, and for the EU, it is now yet another major foreign policy embarrassment, and the less said about it the better. In the meantime, the Ukraine is in full-blown collapse - all five glorious stages of it - setting the stage for a Ukrainian Nightmare Before Christmas, or shortly after.