Ukraine Has Failed Bond Auction As CDS Soar To Pre-Bailout Levels

Tyler Durden's picture

Yesterday we reported a warning by BNP that "The Run On Ukrainian Deposits May Have Already Started." Obviously, while the real implications for the country's financial system should a full-blown bank run emerge would be dire , they would take some time to manifest themselves, especially since as Interfax reported, the country's central bank still has $17.8 billion in reserves as of today (if sliding at an alarming pace). To be expected, overnight the same central bank reiterated its support for the currency, knowing that the last thing it can afford is an evaporation in confidence:


The government also promplty chimed in:


However, judging by the surge in Ukraine CDS ealier today, which soared by 89bps to 1,089bps today, highest since Dec. 10 on closing basis, i.e., before the Russian bailout (which may or may not be concluded), investors are hardly convinced by the local developments.

And the final confirmation that very soon it will be all up to a Russian bailout to fix the situation, was news from minutes ago that the Ukraine just had a failed bond auction:


Then again, Russia itself had a failed bond auction just days ago, so perhaps it has bigger fish to fry than pre-funding the Ukraine rescue package, even though the Ukraine is now nothing but the proxy war venue for sphere of influence between Russia and the insolvent EU.

So while the carry trade has soared today in a furious attempt to mask all the other bad news, certainly keep an eye on the EM and peripheral countries (Ukraine, Argentina, etc). Because despite what some manipulative (central bank-based?) FX trader wishes to represent, things are not getting better and the longer the Fed's tapering experiment continues, the worse it will get.

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Ghordius's picture

that's what Yanukovych more or less said, though a bit more diplomatically than that. though I wonder why you say that. for not making a deal?

Xibalba's picture

Not my words, but those of the State Dept.


ff to the 3min mark for the quote

Oh regional Indian's picture

Financial battles always precede real ones.

It's upto our space brothers now ;-)


Ghordius's picture

and that's why the phreaking Baroness Ashton is going to the talks, in Ukraine. which should really, really explain everything to those who can read between the lines. you can't imagine how pissed I am about that

Levadiakos's picture

How deep is the Ukraine CDS market and who the fuck are the counter-parties? I might have better luck collecting that elusive 8 digit wire transfer from my long lost Nigerian Uncle Kemelayefa.

Wile-E-Coyote's picture

What happens when Russia invades to save the people..................


THX 1178's picture

The people fight back to save themselves from Russia.

Wile-E-Coyote's picture

Yeah but will NATO stand back and watch?

Sashko89's picture

um... you guys are clueless.. its more like the NATO funding neo-nazis in Western Ukraine, and Russia going in to save Ukraine from Nato control and its imerialistic agenda of a NWO.

THX 1178's picture

um... you're clueless if you think Russia doesn't have imperialistic aspirations.

Sashko89's picture

Obviously Russia, isn't putting missile defenses in Mexico to protect the USA from a rogue attack from Latin America, while Nato is trying to take Russia's closest historical ally and split it apart.. So in my opinion even if Russia does have an imperialstic agend, (one which i'm not aware of) its not as evil as what NATO is doing to Russia.

Levadiakos's picture

Russia wont do a thing until AFTER the Olympics....17 days +-

Renewable Life's picture

That should work brilliantly, just follow the Americans play book in Iraq, Afganistan, Somalia, Yemen, and Pakistan!!! The Ukrainian's will be waving your flag and shouting god bless...................

Oh wait, that isn't how it worked for the Americans?????

Ok then Putin should stick to the bailouts and natl resources extortion, that's less bloody and more profitable!!! (Which he probably will, considering his success rate at doing the opposite of America so far, is 100%)

The Dunce's picture

The Ukraine is tired of being Putin's bitch.  So Putin is sticking his dick in the country's ass.  He's making them suffer.  Putin's a bastard.

machineh's picture

Argentina is still WAY ahead of Ukraine in CDS-derived probability of default.

Race to the bottom!

mayhem_korner's picture



Must get moose and squirrel to buy bonds.

Levadiakos's picture

I'm building a retirement program for my Big Mouth Billy Bass

medium giraffe's picture

Silly Ukranians must have thought that a GS backed EU offer of friendship came with a choice...

johny2's picture

Ukrainians have been given a choice! Either they give away their country to EU peacefully or they will be set to fight between themselves until NATO comes to make them live together peacefully.

Boston's picture

or they will be set to fight between themselves until NATO comes to make them live together peacefully

Ha! Over Putin's dead body.

manofthenorth's picture

I Just shipped an order of Gold and Silver to a customer in Ukraine !! The Global insurrection against Banker occupation continues. In the last week I have shipped items to Brunei , Switzerland , UK , Germany  and France. Just keep stacking.

Renewable Life's picture

I would say that cat in the Ukraine is a little late to the game, poor bastard had to convert that plunging stack of paper shit, they call their local currency, to dollars or euro before he could buy gold and silver from you!!!!

Well at least he stopped the bleeding, is all you can say to that!! The goal is to convert to gold and silver, when your local POS currency still has some buying power, that's a win win!!

LawsofPhysics's picture

I have been asking the following question for years, yet to get an answer. 

Why the fuck does a CDS matter if they never get executed because the terms of the the default simple change to suit the central banks and their masters?  The fact that people keep falling for all the same shit and no one goes to prison, let alone the guillotine, is simply amazing.

john39's picture

one way to look at the situation would be to say that the continual scam of moving the goal posts on what constitutes a default does in fact reveal the scam for what it is.  before it was just lunatic conspiracy talk.  now, its a common event...  so, who is nuts now?

SDShack's picture

Because it's the THREAT of CDS default that is needed to extort bailouts from the masses to the bankers. See TARP as an example. See Greece. See Cyprus. These sociopaths have so gamed the system that it is ALL about redistributing wealth from the masses to the elites. CDS was never designed to be executed, it is just a tool to accomplish their one true goal. The rule of law doesn't matter if you are an elite, only a serf. 

Theta_Burn's picture

The Ukraine, between a 5th of fine vodka and a smoking blonde, rock/hardplace?

And Euro dopes want to bring them into the fold, because why?

Do they require more slaves? even slave need something to do.

As bad as a failed auction is, not being able to have auctions at all is way worse

Sashko89's picture

The problem with Ukraine, is that all the media outlets in Ukraine is controlled by West backed oligarchs and they do not show all the shit thats going on financially in the European Union to the Ukrainian public, so thats why Western Ukraine thinks that by joinging the EU their lives will somehow improve... 

TPTB_r_TBTF's picture

Even without input from western Media, the Ukrainians know

that they can then go to Germany and collect welfare.

WhyWait's picture

re: "Then again, Russia itself had a failed bond auction just days ago, so perhaps it has bigger fish to fry than pre-funding the Ukraine rescue package"

 Russia and Ukraine are both targeted by the Empire for subjugation. Along with the rest of the EM and "third world", they are facing an all-too-familiar attack of the "markets", and they know all too well how this is supposed to end.

Maybe events will follow the usual depressing script. Maybe Ukraine will be captured and plundered by the banksters, and Russia finally broken to their whip. But this is not an ordinary moment in history. For both countries, it would make sense to openly drop the dollar for all bilateral trade.

Other countries are at that point now, such as Iran, Argentina, India, Turkey, even Greece and Spain, having been brought to the point of desperation, and many are getting close.

The US may well consider that an act of war, but it's a challenge that will have to be taken up sooner or later, and what the US is doing in Ukraine is already starting to look like warfare, as anyone who has been closely watching events unfold in Syria could hardly fail to understand.  

So I wouldn't bet my bundle on more of the same! 


Wile-E-Coyote's picture

I agree looks like economic warfare, which has a tendancy to go hot.

Dewey Cheatum Howe's picture

It is about gas and Nabucco pipeline. Ukraine is in a very strategic position for Russia besides Syria.

This map makes it clear why

And back to Turkey and Nabucco and the Russian's counter to this


* Would cement Russian dominance of Europe's gas supplies


* Pipeline route avoids Ukraine


So what is this project and who's water does it go through to bypass the Ukraine

The project is seen as rival to the planned Nabucco pipeline.[1] Construction started in December 2012, with a first commercial deliveries in late 2015


Because of the Russia–Ukraine gas disputes, the pipeline is routed through Turkey's waters to avoid the exclusive economic zone of Ukraine


Everything revolves around the Nabucco including the hotspots aka Ukraine, Syria and now Turkey since Erdogan is probably getting too cosy with the Russians for the EU/US/Nato's liking.


Dewey Cheatum Howe's picture

What else is at play for the EU that if they can't implement if Russia has an iron tight grip on Eastern Europe gas supply.


Russia is also worried about the European Union's attempt to break its energy monopoly through legal means. According to new legislation known as the Third Energy Package, which is still in the process of being implemented, one energy company cannot be responsible for production, distribution and sales, because the European Union defines that as a monopoly. And such monopolistic practices actually describe Russian energy companies like Gazprom. If the European Union gets its way, Russian corporate control will be unbundled.


Cui bono for the US you may ask


The real long-term threat to Russian influence in Europe comes less from Azerbaijan than from the building of liquefied natural gas (LNG) terminals. These are facilities located on coastlines that convert LNG back to natural gas after it has been liquefied to enable transport across seas and oceans. With an LNG terminal, a country is less dependent on pipelines emanating from Russia. Poland and Lithuania are building such terminals on the Baltic Sea and Croatia wants to build one on the Adriatic. The Visegrad countries of Hungary, the Czech Republic and Slovakia have been building pipeline interconnectors, in part to integrate with -- and take advantage of -- these Baltic terminals. This LNG comes from many sources, including North Africa, the Middle East and North America. That is why Russia is deeply concerned about vast shale gas discoveries in the United States and elsewhere in Europe -- natural gas that could eventually be exported with the help of LNG terminals to Central and Eastern Europe.


We can essentially lock up the EU on exports alone in LNG and the Russians can't do shit about it without a strong Navy and air presence in the Atlantic. This is the US' ace in the hole if all else fails as long as Russia can't push it's influence back into all of Eastern Europe again under the gas curtain this time around.

TPTB_r_TBTF's picture

On a Planet covered 3/4 with Water ...

may the best Navy win.

Sashko89's picture

Everything does not revolve around that... Nato has long standing imperialstic agenda to split Ukraine away from Russia and eventually break up Russia itself and form a NWO, in which Putin stands in the way off.. Like I said down below, your western Politicians worship the DEVIL! 

All the media channels in the Ukraine are owned by Western backed Oligarachs, gotta give it to the west, Ukraine really blew the information war in this new western sponsored revolution... 



Sashko89's picture

And just to add.. Germany and Russia have a pretty good partnership regarding the natural gas.. Russia isn't the devil trying to screw Europe over.. its the other way around.

Dewey Cheatum Howe's picture

Of course that is what the North Stream is for. A direct pipeline to Germany since the Germans are top dogs in the EU they get top dog treatment.

Dewey Cheatum Howe's picture

Energy is the real power in this world not money. Money is control but money ain't worth shit without power and power requires energy.

It is ALWAYS about power first since control naturally follows. Control doesn't automatically mean power when you control shit no one wants it is powerless in the bigger scheme of things now is it on a world stage.

Sashko89's picture

But, do you not buy that energy with the FIAT DOLLARS THAT YOU PRINT OUT OF NOTHING?,  So obviously money comes first, it gives you the power to buy and control all the energy production, that you need to fund your imperialstic agenda. 

Dewey Cheatum Howe's picture

The money needs to be created and that requires energy to make it.  Fiat is backed by the full faith of the government and it's citizens. The real money is labor and labor requires energy period. The fiat is just store of that potential energy the citizens can output by labor. If there is no energy there is no movement in any system period.

Sashko89's picture

I like your train of thought, however, I would like to intervene.. "The real money is labor and labor requires energy period." Lets dissect this view... If money is labor than what do people work for? and labor requires energy... are you talking about human energy here or capital, or natural resources? Labor requires human energy if the job is performed by humans, and humans work for money... So your statement that money needs to be created and it requires energy is contradictory because fiat dollars are printed with no use of human energy just a machine, which is powered by electricity which needs natural resources.. but to mine those natural resources humans had to perform labor which they would not perform if they didn't get paid... Thus money is at the source of all things. 


Now on a side now if we used gold and silver as our money I think your statement would be more credible.. but fiat money is an illusion placed on the sheep so the elite can control us and further their imperialstic agendas.. 


just my thoughts. how silly or out of touch they may be..



forwardho's picture

Do you by chance play chess?

ZH humbles me.

Just when I think the plan is clear, Someone like You comes along and points out I'm two moves behind.

Bravo on the war gaming!

WhyWait's picture

I highly recommend for following the Great Game.

fwim, GeorgeWashington is a regular contributer there.

ThirdWorldDude's picture

GR are good, but experience has taught me to always look for a second opinion:

WhyWait's picture

Merci beaucoup!

Looks very interesting.  Looks like I'll have to bone up on my French!

halfawake's picture

"[insert country] CENTRAL BANK READY TO SUPPORT [insert failed entity] IF NEEDED" = famous last words

halfawake's picture

Next = "Crisis is completely contained to [insert failed country]"

Bangin7GramRocks's picture

No Problem! Yellen will simply slide the Friday afternoon pump money to Ukraine. In this fucked up world, we are talking about Fed lunch money. Nothing to see here...