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With Ukraine Default Risk At 6 Year Highs, US Taxpayers "Volunteer" To Guarantee Its Debt

Tyler Durden's picture




 

Just two days ago we detailed the possibility that Russia could accelerate debt repayment on a $3 billion loan it granted to Ukraine that has broken its covenants. While there is no word yet from Russia on a decision whether to demand the payment, it appears, as Reuters reports, the US taxpayer - just as we warned - is quite willing to step up (thanks to their leaders in Washington) and guarantee $2 billion in loans to the world's 2nd most credit risky nation (after Venezuela).

 

Ukraine is the 2nd most risky sovereign nation in the world (beaten only by socialist utopia Venezuela) based on CDS premia...

 

As Reuters reports, The US Treasury seems more than happy to put $2 billion of US taxpayer money at risk...

The United States plans to provide up to $2 billion in loan guarantees to Ukraine this year, the U.S. Treasury said on Tuesday, as part of a broader international package to stave off bankruptcy.

 

Like other major donors to the country, Treasury said the guarantees would be contingent on the former Soviet republic remaining on track to meet the conditions of its loan program from the International Monetary Fund.

 

Treasury said it would provide a $1 billion loan guarantee to Kiev in the first half of this year, and work with the U.S. Congress to provide an additional $1 billion guarantee, but only if Kiev sticks with its reform agenda.

So where does the nation stand?

The cost of insuring exposure to Ukrainian debt rose to a new 5-1/2 year high on Tuesday, according to data from Markit, a financial information provider, amid fears the country may have to restructure its debt.

 

 

Ukraine's foreign currency reserves were down to just over $7.5 billion at the start of the year, the lowest in 10 years and barely enough to cover five weeks of imports.

*  *  *

How ironic it is that, should Russia decide to demand early repayment (not a controversial decision), then - despite all the sanctions and economic warfare - it would be the US taxpayer's cash that 'bails' them out indirectly...

*  *  *

But that's not all:

  • *YATSENYUK SAYS UKRAINE MUST MAKE $11B OF DEBT PAYMENTS THIS YR
 

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Tue, 01/13/2015 - 16:47 | 5656931 Publicus
Publicus's picture

Well, the us dollar is free and costs nothing to produce. So it's not a bad deal.

Tue, 01/13/2015 - 16:50 | 5656959 McMolotov
McMolotov's picture

Barry be makin' it rain, bitchez!

Tue, 01/13/2015 - 17:10 | 5657081 Dr. Engali
Dr. Engali's picture

I'm pretty sure that he's really peeing on your back and telling you something different. Trickle down bitchez! Feeling wealthy yet?

Tue, 01/13/2015 - 17:24 | 5657139 Latina Lover
Latina Lover's picture

The 2 billion loan guarantee will be for arms purchases by the Ukraine from the USSA MIC, with some of the money siphoned off by Ukie Oligarchs.   

The people of the Ukraine get nothing and instead will be sent to  fight and die on the ' new russian' front.  This is how things work in a crony capitalist aka fascist society.

Tue, 01/13/2015 - 18:42 | 5657529 Paveway IV
Paveway IV's picture

YAY! Does this mean we finally have our own Greece!

FUCK the EU - We're exceptional once again!

Tue, 01/13/2015 - 19:05 | 5657626 EBT excepted
EBT excepted's picture

d'titz, and d'brain...dats da compleet package...

Tue, 01/13/2015 - 19:24 | 5657718 Anunnaki
Anunnaki's picture

+1 that would have been my guess. Pol Pot Shenko goes to the MIC candy store, loads up the shopping cart and get Uncle Obomber to whip out his Credit card

Wed, 01/14/2015 - 02:12 | 5658876 Sandmann
Sandmann's picture

The US/German funding of arms purchases from Ukraine in past years armed Syrian rebels and assorted terror groups with Soviet-provenance weapons - H&K had a contract to modify and improve light weapons shipped from Ukraine by the German BND en-route to Syria

http://www.spiegel.de/politik/deutschland/ukraine-liefert-waffen-an-deut...

http://www.aufschrei-waffenhandel.de/Syrien.513.0.html

 

 

 

Tue, 01/13/2015 - 16:50 | 5656963 giovanni_f
giovanni_f's picture

A bankrupt guaranteeing for a bankrupt. Beyond Ponzi.

Tue, 01/13/2015 - 16:57 | 5656991 Publicus
Publicus's picture

You got it, and as long as you can exchange the worthless dollar for yuan at the Chinese peg, you can buy everything of substance.

 

The Chinese holds all the cards, they just don't know it yet.

Tue, 01/13/2015 - 17:08 | 5657067 NotApplicable
NotApplicable's picture

Didn't that peg export the ponzi to China at multiples of the peg rate?

Looking around, I'd say that Chinese cards are all tied up in the global real estate market.

I used to think that perhaps China could weather the upcoming financial storm, but it seems they are just as corrupt as any other banksters.

 

Tue, 01/13/2015 - 17:28 | 5657152 Publicus
Publicus's picture

They could, someone will just have to show them the way.

Tue, 01/13/2015 - 16:56 | 5657009 Gazooks
Gazooks's picture

it's the least we can do

Tue, 01/13/2015 - 17:05 | 5657044 insanelysane
insanelysane's picture

for the Russians.

Tue, 01/13/2015 - 17:58 | 5657300 Jack Burton
Jack Burton's picture

Bravo! Short, sweet and all too True!

Wed, 01/14/2015 - 02:05 | 5658865 Sandmann
Sandmann's picture

Warranty Costs are pretty high though even if they are off-sheet

Tue, 01/13/2015 - 16:48 | 5656937 The Most Intere...
The Most Interesting Frog in the World's picture

The more I know, the angrier I get.

Tue, 01/13/2015 - 16:50 | 5656965 Dr. Engali
Dr. Engali's picture

Anger over something you have no control over is just wasted energy. Focus on your sphere of influence and let the chips fall where they may. Now if you choose to act on your anger please take a few bankers out with you.

Tue, 01/13/2015 - 16:53 | 5656972 El Vaquero
El Vaquero's picture

Upper management, not a local teller.

Tue, 01/13/2015 - 16:47 | 5656939 Dr. Engali
Dr. Engali's picture

Just write that out of my checking account. The money is there, I promise.

Tue, 01/13/2015 - 16:50 | 5656968 Mr Pink
Mr Pink's picture

This makes me want to go back and get a real job so I can contribute more 

Tue, 01/13/2015 - 16:47 | 5656942 pods
pods's picture

Boy, for a nation that is fuck-loaded in debt we sure seem to be generous with money we don't have.

pods

Tue, 01/13/2015 - 16:49 | 5656951 Publicus
Publicus's picture

What are you talking about? We can print as much dollar as we want at no cost. And as long as the Chinese peg is there, the dollar will have it's value backed by the center of human civilization.

Tue, 01/13/2015 - 17:08 | 5657057 MsCreant
MsCreant's picture

The Fed prints it to buy treasuries which the US taxpayer is on the hook for when Ukraine defaults on this "loan." Bankers love this shit. 

Wed, 01/14/2015 - 00:50 | 5658726 Paveway IV
Paveway IV's picture

What a coincidence. The Fed is also loading up on Uke CDS under the table. 

Now if Russia was smart...

Tue, 01/13/2015 - 17:28 | 5657151 pods
pods's picture

Not quite sure if you are sarcastic or not, as I have seen you post this "free" twice.

The FED creates digital FRNs for nothing.

The US government (US Treasury), not so much.

pods

Tue, 01/13/2015 - 17:11 | 5657078 NotApplicable
NotApplicable's picture

Debt is money, silly.

We're RICH!

Tue, 01/13/2015 - 17:30 | 5657160 pods
pods's picture

Yep, and if we pay off (actually discharge) that debt, where would the money go?

*poof*

 

Tue, 01/13/2015 - 17:32 | 5657175 El Vaquero
El Vaquero's picture

Brings a whole new meaning to the word *poofer.*

Tue, 01/13/2015 - 21:48 | 5658174 TheFourthStooge-ing
TheFourthStooge-ing's picture

Poofter's Froth Wyoming Prints Ahead

Tue, 01/13/2015 - 16:49 | 5656945 jcaz
jcaz's picture

...Plus we'll hand them all free college educations and tell them how to think-  they'll be model Democrats

Lock in that vote, Barry.

Tue, 01/13/2015 - 16:49 | 5656956 buzzsaw99
buzzsaw99's picture

a measly $2B? Pffftttt.

Tue, 01/13/2015 - 16:55 | 5656995 FrankieGoesToHo...
FrankieGoesToHollywood's picture

Just have the entire Ukraine nation enroll in community college.

Tue, 01/13/2015 - 18:03 | 5657332 Jack Burton
Jack Burton's picture

Oddly enough, I believe that is what they told the young folks on the Euro Maidan was going to happen after the revolution. The youth would all go to college, sip coffee in the sidewalk cafes and do nothing, while the EU and USA took over handing them free money now that Russia has been kicked out. Overall, Russia subsidized Ukraine, directly and in-directly around 20 billion dollars a year. Cheap oil, cheap gas, cheap electricity and direct cash handouts. The Nazis forgot who was paying Ukraine's bills! Now it is up to the gold old USA to take voer for Russia, and fund a nation of beggars, lay abouts and nazi dress up clowns.

Wed, 01/14/2015 - 00:58 | 5658744 Paveway IV
Paveway IV's picture

So the youth WILL all be going to college and sipping coffee in the sidewalk cafes. They'll just have to stand in line a little longer because the Nazis cosplay crowd love coffee, too, and needs to keep an eye on the youth for draft dodgers and Russia lovers. 

Yats is going to reach Scientology level OT-XII for this win! Porky is just stocking up on coffin liners and body bags for now - they'll be worth more than Uke CDS pretty soon.

Wed, 01/14/2015 - 02:05 | 5658868 Sandmann
Sandmann's picture

This is the same Yats that told German TV how USSR invaded Ukraine and Germany in WW2 presumably deposing Adolf Hitler in Berlin

Wed, 01/14/2015 - 03:48 | 5659007 Paveway IV
Paveway IV's picture

"Yats is our man!" Victoria Nuland, Bride of Satan and good friend of Jen Pasaki

Tue, 01/13/2015 - 16:49 | 5656958 midtowng
midtowng's picture

If Ukraine's economy collapses that will interfere with the Washington MIJC plan of confronting Russia.

Tue, 01/13/2015 - 16:51 | 5656960 me or you
me or you's picture

Sorry Detroit and California. 

Tue, 01/13/2015 - 16:51 | 5656962 q99x2
q99x2's picture

US taxpayer ain't got no money bitchez. Dream on bankster M'Fer.

Tue, 01/13/2015 - 16:50 | 5656966 10mm
10mm's picture

US "TAXPAYERS" Volunteer. Like we have a say in the matter.

Tue, 01/13/2015 - 16:53 | 5656973 Mr Pink
Mr Pink's picture

Taxes are voluntary

Tue, 01/13/2015 - 19:48 | 5657792 August
August's picture

Thats using the Woodrow Wilson definition of "voluntary", as when military conscripts are said to be "national volunteers" representing the national will, expressed through national government.

Wed, 01/14/2015 - 02:07 | 5658870 Sandmann
Sandmann's picture

Woodrow Wilson had been educated in Prussian Germany

Tue, 01/13/2015 - 16:52 | 5656970 SpanishGoop
SpanishGoop's picture

You stupid Americans. :-)

 

Tue, 01/13/2015 - 16:52 | 5656980 Hamm Jamm
Hamm Jamm's picture

FUCK you Obama !   piece of crap

Tue, 01/13/2015 - 16:52 | 5656981 buzzsaw99
buzzsaw99's picture

the way i look at it turkey's loss is ukraine's gain /s

Tue, 01/13/2015 - 16:54 | 5656989 MarketAnarchist
MarketAnarchist's picture

Tax evasion in the US, for reasons like this article, is a moral obligation.

Tue, 01/13/2015 - 17:18 | 5657119 Berspankme
Berspankme's picture

+1000

Tue, 01/13/2015 - 16:55 | 5656996 SpanishGoop
SpanishGoop's picture

I just hope that gold you lifted out of that country wasn't lead.

Lead isn't worth that much.

 

Tue, 01/13/2015 - 16:56 | 5656999 FieldingMellish
FieldingMellish's picture

Uke bonds... backed by the full faith and credit....

Tue, 01/13/2015 - 16:57 | 5657003 Mike Honcho
Mike Honcho's picture

See hiring Janika Merilo is already paying off.  Bet old Billy Clinton will head up this project.

Tue, 01/13/2015 - 16:57 | 5657005 El Vaquero
El Vaquero's picture

 

it would be the US taxpayer's cash that 'bails' them out indirectly...

Which, quite frankly, I find embarassing.

Tue, 01/13/2015 - 17:00 | 5657022 PrayingMantis
PrayingMantis's picture

 

 

... "US Taxpayers "Volunteer" To Guarantee Its Debt" ...

 

... more like ... "Voluntold" ...

Tue, 01/13/2015 - 17:01 | 5657026 SpanishGoop
SpanishGoop's picture

America should buy rubles, give them to Ukraine so they can pay Russia.

You get a lot of rubles for a dollar now.

 

But of course printing dollars is still cheaper.

 

Tue, 01/13/2015 - 17:05 | 5657031 ebworthen
ebworthen's picture

Of course!

It is the duty of every U.S. taxpayer to bail out neo-Nazi's in Russia's back yard and the Brussels/Wall Street Bankster cabal!

Get back to work serfs!  Amurika!  Wave that flag!

"Greatest Country in the World!" (at something).

Tue, 01/13/2015 - 17:02 | 5657032 deeply indebted
deeply indebted's picture

Of course. Obviously, Debt > Cash. And when you can "print" your own money anyway, what better way to "buy" a Country??

Tue, 01/13/2015 - 17:17 | 5657105 MsCreant
MsCreant's picture

Obama wants to buy a 58th state for us!

Tue, 01/13/2015 - 18:54 | 5657576 HowdyDoody
HowdyDoody's picture

Actually, it was supposed to become Israel in Europe.

Tue, 01/13/2015 - 17:03 | 5657033 deeply indebted
deeply indebted's picture

.

Tue, 01/13/2015 - 17:07 | 5657053 QQQBall
QQQBall's picture

$2B isn't even a rounding error at the FED

Tue, 01/13/2015 - 17:17 | 5657112 Berspankme
Berspankme's picture

Pffffff!  $2B in fiat, that's nothing for old yeller and your grandchildren.

 

Fuck You Bernanke

Tue, 01/13/2015 - 17:17 | 5657107 kchrisc
kchrisc's picture

The Zionists want Lebensraum and pipeline routes for their lair on the eastern Med., and more debt created for them to feed off of.

Bingo: Take down the Ukraine, knock oil prices down, and then have more debt printed up to offset the Ukraine's debt. As a bonus, pickup defaulting shale, oil, and gas assets at a "printed" song.

The banksters need to repay us.

 

Many still cannot see the Zionism for the goy pols and crats.

Tue, 01/13/2015 - 17:18 | 5657117 Bam_Man
Bam_Man's picture

"Those Ukrainians will be voting Democrat for the next hundred years."

Tue, 01/13/2015 - 17:24 | 5657140 Billy Shears
Billy Shears's picture

Two billion in worthless debt backed by two billion worthless dollars! My, the world is deluded...

Tue, 01/13/2015 - 17:30 | 5657161 Billy Shears
Billy Shears's picture

I bet the US wouldn't agree to settle with Russia in gold even if it meant .50 cents on the dollar.

Tue, 01/13/2015 - 17:39 | 5657199 Mike Masr
Mike Masr's picture

Two billion dollars of US taxpayer money to Banderist Neo-Nazi thugs. 

Tue, 01/13/2015 - 18:32 | 5657482 X_Weatherman
X_Weatherman's picture

The Corporate-Fascist U.S. Goverment is obliged to supply one of its cohorts.

Tue, 01/13/2015 - 18:13 | 5657374 silverer
silverer's picture

The FDIC has it covered!

Tue, 01/13/2015 - 19:00 | 5657612 SmittyinLA
SmittyinLA's picture

Actually US taxpayers also guaranteed Venezuelan debt, and its going bad too http://www.caribbeannewsnow.com/topstory-Venezuela-may-sell-PetroCaribe-...

Commies never put up their own property money or oil, they find a dupe entity to eat the liability, that would be PetroCaribe, guaranteed by good ol USSA under NAFTA.

Americans financed Hugo Chavez' oil diplomacy program under the traitor Boosh and Obama kept the line o credit open, all good until oil dropped. 

http://www.caribbeannewsnow.com/topstory-Venezuela-may-sell-PetroCaribe-...

 

Tue, 01/13/2015 - 19:02 | 5657613 vincenze
vincenze's picture

Soros is currently in the Ukraine. Why can't he give HIS billions to them and get the money back with an interest?

Wed, 01/14/2015 - 02:07 | 5658872 Sandmann
Sandmann's picture

Soros makes the golden calf for you goyim to worship

Tue, 01/13/2015 - 22:56 | 5658423 fibonacci's claus
fibonacci's claus's picture

now how can they do that when i can't even get a small business loan?

 

geesh, i guess that little cheese eatin rat prick gary gensler was right,  finance is sooooooooooooooooooooooooooooooooooooooooooooooo complex and esoteric i guess i will never understand it.

 

i heard gensler was caught eating swiss cheese with the leader of north korea.  sure hope is pals don't find out it wasn't kosher.  g-d forbid that little cheese eatin rat gets kick out of the club and finds himself hanging out with a bunch of thugs with nail guns.  just sayin

 

snarky sarc (emphesis added)

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