Posted on 06/27/2022 5:00:12 AM PDT by Browns Ultra Fan
Already gone!
Russia defaulted on its foreign-currency sovereign debt for the first time in a century, the culmination of ever-tougher Western sanctions that shut down payment routes to overseas creditors.
For months, the country found paths around the penalties imposed after the Kremlin’s invasion of Ukraine. But at the end of the day on Sunday, the grace period on about $100 million of snared interest payments due May 27 expired, a deadline considered an event of default if missed.
It’s a grim marker in the country’s rapid transformation into an economic, financial and political outcast. The nation’s eurobonds have traded at distressed levels since the start of March, the central bank’s foreign reserves remain frozen, and the biggest banks are severed from the global financial system.
But given the damage already done to the economy and markets, the default is also mostly symbolic for now, and matters little to Russians dealing with double-digit inflation and the worst economic contraction in years.
War is hell and Ukraine is paying the price as well.
Meanwhile, European sovereign bond yields are up over 10 basis point this morning, but not UK and Sweden (non-ECB nations).
(Excerpt) Read more at confoundedinterest.net ...
Sanctions prevent Russia from accessing their money.
Imagine your landlord seized and froze your bank account and tried to evict you for not paying rent. Take that before a judge.
Holders of Russian debt get screwed here.
Russia one of the world countries that has paid its debts….and also paid Ukraine’s debt when the USSR broke up.
I understand the reasoning for sanctions, I just think this is way more complex than it may seem on the surface. Are we cutting our nose to spite our face here when we try to put the pieces back together after this war is over?
Who does the collapsing ruble benefit most in this current scenario? Will it help Ukraine in ending the war sooner or take it in different directions?
“ If I read this correctly it is not that they cannot pay but that western enemies have prevented allowing the access so they can pay.
Correct me if I am mistaken please.”
The terms of the Bonds said interest payments must be made in USD. Not rubles, not gold.
Russia has a finite number of USD and they don’t want to use it for debt payments and Western powers have kept them from converting rubles, gold, oil & other things to USD.
Yes, it’s a “Catch 22” designed to hurt Russia.
The ruble is crashing because the Western countries intend to ruin Russia’s credit rating, by freezing their access to their funds in Western banks, and not permitting them to pay their foreign debt.
Meanwhile the growing bloc of BRICS nations is watching this
“Who does the collapsing ruble benefit most in this current scenario? Will it help Ukraine in ending the war sooner or take it in different directions?”
pssst, it’s not collapsing at all. I’m just having fun with the Neocon supporters here.
It’s not collapsing at all. I’m just having fun with the Neocon supporters here.
Given the "ruble is rubble" remark of Biden in March, when the exchange was about 135, 53 and change seems quite a difference now that late June arrives and the one time most recent dip was a bounce of almost no duration.
While Russia is indeed playing with fire, so is the US. But our fire began when Biden took office and the revitalized war against "fossil fuels: erupted again. For a nation so recently energy independent, Biden's "no more fossil fuels" campaign promise is turning out to be THE axle to this wheel.
Between Russia and Biden, I conclude Biden is the greater threat ti America. Far greater.
Do these Western countries also intend to impose sanctions to ruin China’s credit rating as well, for helping Russia blunt the impact of the previous sanctions? Because I believe that is what it would take to prevent Russia’s end-run around Western sanctions through China (and India). This is what I meant by complexity here and the law of unintended consequences biting back. Thoughts are welcome.
“Between Russia and Biden, I conclude Biden is the greater threat to America. Far greater.”
Certainly agree there as I’m still waiting for Putin to start up Drag Queen shows at my grandchildren’s schools.
Think China is taking notes for how to insulate from Western retaliation when they assimilate Taiwan
Indeed. And just how much pain and “ hair-mussing” do you think the people writing Joe Biden’s teleprompter remarks for him are prepared to tolerate and accept on all of our behalf if this proxy war between NATO and Russia suddenly turns hot? Would these “leaders” decisions reflect the majority of the American people or would we feel sold-out by how such a conflict would be conducted? How suddenly could this escalate to direct conflict and what might be the red-line triggers?
you have to think about that. 1918 Russia became part of the USSR. Of course the commies aren’t going to pay the debts of the czar.
Your buddy convicted felon George Soros made his ill-gotten fortune manipulating currencies, Pal. It is what he does. The whole world knows it, unfortunately for you.
Obviously if Putin were to allow Red Square drag queen shows, the mainstream media would be faced with a quandary as to which drag queen show to applaud. Pride does indeed go before the fall. And it's not fall for a few more months....
Best wishes.
LOL, you have me mixed up.
My 10Y Russian bonds are in a green at +0,37% or about 30% up since February, not counting coupons. It seems like investors don’t trust the article.
There is no intent to put the pieces back together after this war unless DC And globohomo hand select and install a Russian leader.
“My 10Y Russian bonds are in a green at +0,37% or about 30% up since February, not counting coupons. It seems like investors don’t trust the article.”
They laugh at it...Ruble still at 7-year highs.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.