Posted on 06/03/2022 8:20:38 AM PDT by marcusmaximus
Russia's failure to pay $1.9 million in accrued interest on a dollar bond will trigger payouts potentially worth billions of dollars, a panel of investors determined on Wednesday, as the country teeters on its first major external debt default in over a century.
(Excerpt) Read more at money.usnews.com ...
Russia’s Missed Bond Payment Triggers Default Insurance
The industry body overseeing the credit-default swaps market says Russia defaulted when it didn’t make interest payments due during a grace period
https://www.wsj.com/articles/russias-missed-bond-payment-triggers-default-insurance-11654099766
“That’s like your mortgage company refusing to accept a payment, then declaring you in default.”
No. The payment was not refused. It was late.
Putin shorted the accrued interest which triggered the default. If he had paid the accrued interest, he wouldn’t have defaulted. Maybe he can blame his cancer for making him forgetful.
Just deduct it from the $100B the US owes Russia.
This default is entirely symbolic for the following reasons:
1. Russia *has* money. Everything related to the “dollars vs rubles” question is a question of economic politicking, not Abilty to Repay.
2. Because of the sanctions, Western investments aren’t allowed in Russia anyway, so why would a Western credit rating even matter in the practical order?
3. Some might call it a rather duplicitous maneuver to freeze assets held in foreign countries (and, in some cases, try to sell them off) and then declare the rightful owner of those assets to be “in default.”
Meanwhile, Russia simply expands to more markets in Asia and Africa.
So then they should be able to purchase dollars cheap to pay their bonds right?
But they can’t. Because I’ve heard trading in rubles is very thin and being artificially manipulated to appear strong.
But I am curious about the alleged backed by gold. Where’s the gold window where you can actually exchange rubles for gold? And can you take the gold out of Russia after the exchange? And weren’t they floating some sort of backing by a basket of commodities too instead of gold? Which is it?
How is the default symbolid?
Either creditors got their payment in dollars or they didn’t.
I can’t go to the mortgage company and say, I’m not paying you in dollars, but I have the money so it’s only a symbolic default.
I always find those who gloat about another country’s financial status to be rather bewildering, as though America’s financial house of cards is ANYTHING worth boasting about at the moment.
“That’s like your mortgage company refusing to accept a payment, then declaring you in default.”
Yeah, try to pay your mortgage company with monopoly money or maybe currency you printed yourself like the ruble. They won’t hesitate to declare you in default. You agreed to pay in dollars. Pay in dollars.
Russia didn’t change the terms, the west did, when they blocked them from using SWIFT. Russia can’t pay in dollars because the west changed the conditions, Russia has every right to give them the finger completely.
From the article: “Sanctions imposed by western countries and their allies on Russia following its invasion of Ukraine on Feb. 24, as well as counter measures by Moscow, have all but excluded the country from the global financial system. The lapse last month of a key U.S. license allowing Russia to make payments put the prospect of the country defaulting back into focus.”
This ‘lapse’ is actually an intentional decision by the US Treasury to let the license expire that allowed Russia to pay investors in dollars in spite of the sanctions: https://www.bloomberg.com/news/articles/2022-05-24/russia-edges-closer-to-default-as-us-says-key-waiver-will-expire
So to be more accurate, it would be a case of the mortgage company REFUSING to accept ypur payment in dollars, then declaring you in default anyway.
$1.9 million? Pocket change for Putin. Sounds like it’s planned.
No. We have literally have excluded Russia from USD denominated payment systems.
Then whine when they don’t make debt payments that must be USD denominated?
Are you a retard or just playing a clown? No offense, just asking:)
It is not a default, it is a US treasury which forbids transfers of coupons on Russian bonds to the US holders and calls it a default. The Russians are laughing all the way to the bank, so are the holders of Russian bonds nominated in currencies other than dollars.
Time for Putin to fire another general. Chechens dying like flies. Wagner mutiny. Buryats and Dagestanis running home after contracts expired. Sovereign debt default.
I'm sure they could find someone to pay their debt in real currency in exchange for physical gold if they really wanted to pay their debt.
Stop messing with the financial mechanisms that Russia needs to conduct transactions.
Accurate synopsis.
You are completely correct in every respect.
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