Posted on 07/22/2022 3:29:20 PM PDT by delta7
Corn Popov, Corn Pop’s Russian cousin...
This is really starting to get expensive. Looks like Washington war profiteers will be in good shape for a long, long time. Then we will have to pay to rebuild Ukraine. $$$
The money is in the bank accounts of the Democrat National Committee. That is why the Soros and Biden worshipers insist that source of Biden’s dirty money remain open. And so Fauci’s bil labs remain open and free to cultivate deadly viruses to release in the U.S.
T h e
* J U D A S-B A G
I had never even heard of that movie.
It seems Tank Girl was the chick from Point Break...
Corrupt before, corrupt now, probably corrupt always.
That may be the reason that The Pentagon wants to send fighter jets possibly to protect these expensive war assets that are being destroyed.
Gee, who would have seen that coming from one of the most corrupt countries in the world?
I'll bet TTF Netherlands really enjoyed that...
Why not? It works. The Neo Cons love him. The Soros worshipers love him. The Biden worshipers love him. The Globalists, ETAL. love him.
1- What the Russian debt default means
Short-term, not much will change for Russia after this. Its economy won’t suddenly collapse, Putin, won’t drop dead, sugar won’t vanish from the stores, and Russia will still be able to fund most of its expenses.
In the matter of debt payments, Moscow has been on life support for a while. The plug was pulled on May 25, when the U.S. Office of Foreign Assets Control did not renew a special dispensation to allow Russia to make sovereign debt payments.
On May 27, this caused Moscow to miss $100 million in payments, and everyone was counting down the 30 days of the grace period. Now it has elapsed, and the long-awaited Russian technical default is finally here. The last time it happened to Russia was back in 1918. However, there are crucial differences between a regular default and the one we’re seeing now, after four months of unprecedented Western financial sanctions.
First, a default always has a dire effect on the debtor. The country is cut off from capital markets, its banking sector is blocked, ratings plummet, and investors take their capital elsewhere. Naturally, the civilized world isn’t keen on doing business with such a country. But all of that has already happened to Russia. Essentially, a “MORAL DEFAULT” occurred on Feb. 24. Today, it became a nominal one. Hence, the consequences for Russia won’t be too noticeable – most of them were already there for several months.
Second, a default could be followed by a series of cross defaults, where other investors start demanding early bond payments. Russia has several dozen billion dollars of such debts. It is, however, rather naïve to demand urgent repayment from a country that is openly stealing everything it can get its hands on – from washing machines to hundreds of planes. Not to mention, there is little incentive for Russia to pay back any debts – the default has already happened.
It’s a powerful signal to the entire world, branding Russia to remain a blank spot on the global economy for decades to come.
Western sanctions will only ramp up further: recent developments suggest that the Russian gold embargo is imminent, and natural gas exports are next. Russia’s credit ratings will be penalized for 15 years – provided, of course, that Russia as we know it will last that long.
Even without acute immediate repercussions, Russia’s technical default is a nail that will keep the coffin of its economy firmly shut.
https://news.yahoo.com/russian-debt-default-means-153600292.html
2- Russia enters sovereign default after missing FX bond payments – Bloomberg
Russia announced a default on its foreign currency-denominated sovereign debt for the first time since 1918 on June 27, as Western sanctions cut the Russian Finance Ministry’s access to foreign currency with which to pay its creditors, news agency Bloomberg reported.
Don’t believe the media hype that this is the first Russian default since 1918
According to Bloomberg, on midnight on June 27 Russia missed the last day of a grace period to transact an interest payment of U.S. $100 million to bond holders, and this event triggered a default.
“This is a grim sign of how a country can quickly become an economic, financial and political outsider as its central bank reserves are frozen and its biggest banks are cut off from the global financial system,” the Bloomberg report reads.
3- Don’t believe the media hype that this is the first Russian default since 1918
27 June, 11:01 AM
That’s just stretching the reality. As someone who was there in 1998, working in Russian markets, I can assure you that Russia defaulted in 1998. Absolutely, no doubt. 100%.
Russia defaulted on around $100bn in debt liabilities in 1998, restructured Soviet-era FX liabilities - PRINS and IANs (investors eventually took a one-third haircut) then around $60bn in local ruble debt, GKOs (mostly held by foreigners who got cents in the dollar), plus also various corporate debt.
The confusion arises as Russia avoided defaulting on post-91 issued Russian FX debt, the few Eurobonds it had issued post-91. Being there at the time this was more of a fluke.
When they failed to pay liabilities in August 1998 they had a few months until the next Russian era Eurobond fell due, in November that year, and managed to scrape the money together to pay that to pretend that the Russian Federation paid, when we all know they did not. This was just a PR stunt.
But those PRINS and IANs were still Russian Federation liabilities, as when the USSR collapsed the Russian Federation assumed all the assets and liabilities. It failed to pay the liabilities and hence the Russian Federation WAS IN DEFAULT in 1998.
Some USSR successor states have argued that given Russia failed to pay its liabilities, they should have been compensated by getting a share then of the USSR’s assets.
* Try telling investors who lost their shirts in 1998 that the Russian Federation did not default. Complete bollocks!
It is interesting though now to ask the question does this matter?
Siluanov is banging the line that this is just a technical default, and Russia can pay and will pay, but that it is just being prevented from paying by the US Treasury. And I guess his line is that when the dust settles that everyone will forget this.
I doubt it.
First, it matters as it is embarrassing for Putin. I remember back in 2000, soon after Putin took office and on his first meeting with the German chancellor, Schroeder.
At that time the market was expecting a London Club restructuring. There was a meeting when the market expected Schroeder to offer Putin debt relief for Russia.
To everyone’s surprise, Putin rejected it and said a sovereign power, like Russia, did not need bailouts from the West. So for Putin Russia paying its international obligations is a matter of national pride and, as he said, at the time, Russian great power status comes with paying one’s obligations.
Clearly, Russia is not a great power then.
Second, default day might not have much market-to-market impact, as this has already been priced in. Russian sovereign longer maturity Eurobonds which were trading at 130 cents before the war, have already crashed to 20-30 cents, and are already trading at default levels.
Indeed, Russian likely already defaulted on some ruble-denominated instruments owed to foreigners in the weeks just after the invasion, albeit having pulled their ratings the rating agencies were not able to call this a default.
But this default is important as it will impact on Russia’s ratings, market access, and financing costs for years to come. And important herein, given the US Treasury forced Russia into default, Russia will only be able to come out of default when the US Treasury gives bondholders the green light to negotiate terms with Russia’s foreign creditors.
This could take years, decades even, even assuming some kind of ceasefire but falling short of a final peace agreement. So Russia will have limited access to foreign financing and will pay higher borrowing costs for years to come.
Now just imagine if Russia is still looking for alternative sources of financing beyond the West, for example from Chinese banks. Do you think that Chinese banks will be prepared to look beyond the default headlines? Hardly.
If they are prepared to run the secondary sanctions risks - which so far they have not - and still lend to Russia, they will add a huge risk premium to lending rates for the prospect of somehow being dragged into future debt restructuring talks.
It just makes lending to Russia that much more difficult. So people will avoid it. And that means lower investment, lower growth, lower living standards, capital and human flight (brain drain), and a vicious circle of decline for the Russian economy.
And Russia might currently be basking in high oil and energy prices, but the carbon transition and accelerated Western diversification away from Russian energy and commodities mean that this golden goose is cooked two to three years down the line. It might be on the slow roast, but the goose will be inevitably cooked.
So on a two to three years outlook, Russia faces a collapse in export receipts, with almost no access to international financing because of sanctions and default.
Meanwhile, with much of Putin’s military having been destroyed in Ukraine, he will struggle to finance a military rebuild which he will be desperate to achieve given his desire to retain some kind of parity with NATO.
That means that the Putin regime will have to divert all resources away from consumption to military investment. It will all have a feel of decay circa the late 70s, and early 80s Soviet Union. And decay and decline are the outlooks here for Putin’s Russia and a large part of that is because of today’s default.
Ukraine tank girl - 43 seconds
Ukraines a money dump....might as well flush the toilet because it’ll never go where it’s needed.
It has an air of Eurotrash pop and Indian flair to it.
“That may be the reason that The Pentagon wants to send fighter jets possibly to protect these expensive war assets that are being destroyed.”
Interestingly enough apparently there has been a lot of behind the scenes deal making going on. This new grain shipment agreement that was just announced is connected to concessions to remove some of the sanctions. Planes and long range HIMARS have been taken off the table, too, according to U.S. sources.
Intel Slava Z
🇺🇲🇷🇺🇺🇦 The US is preparing for a compromise?
Today, Russia has given guarantees that it will not attack Odessa from the sea for 120 days, so that Ukraine can sell its grain and other goods by sea.
And here is the news that appeared immediately after that:
- The United States did not transfer aircraft to Ukraine, but only helps with spare parts for existing aviation - Pentagon
- The United States does not intend to provide Ukraine with ATACMS missiles (range up to 300 km), Biden’s national security aide said.
- Possible supply of US fighter jets to Ukraine is not considered in the near future - White House
— The United States and allies need Russian oil supplies to world markets, otherwise prices for it will rise again
— Lithuania resumed transit between Russia and the Kaliningrad region
And the Democrats are buying condos in Hawaii.
Yes, it was amusing and very typical...:-)
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