‘The Great Crash of 2018’ will start in bond market – strategist

‘The Great Crash of 2018’ will start in bond market – strategist:

Ten years after the 2008 financial crisis “very little has been really fixed,” and the next bubble is about to burst, says Bill Blain, a strategist at Mint Partners. According to Blain, this time the bond markets will trigger the mayhem.

Global stocks rose in value after the People’s Bank of China poured $47 billion into its financial system. That means “central banks have little to worry about in 2018 – if markets get fractious, just bung a load of money at them,” said Blain.

The 2008 crisis, which was about consumer debt, was triggered by mortgages. We still have consumer debt crisis problems ahead, warns Blain, adding the next financial crisis is likely to be in corporate debt.

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Venezuela, in ‘selective default’, signs debt deal with Russia

Venezuela, in ‘selective default’, signs debt deal with Russia:

Moscow (AFP) – Venezuela signed a debt restructuring deal with major creditor Russia on Wednesday, as ratings agencies declared Caracas in partial default.

The country is seeking to restructure its foreign debts, estimated at around $150 billion, after it was hit hard by tumbling oil prices and American sanctions.

A Venezuelan delegation led by Finance Minister Simon Zerpa signed the deal restructuring $3.15 billion of debt taken out in 2011 to finance the purchase of Russian arms.

H/t reader squodgy:

“Looks like they’re prioritising their debt by re-arranging things with creditors they feel they’ll need in the future.
Rejection of America, who merely rape countries on behalf of bankers, is understandable, but that leaves China, Russia and the odd rebellious European renegade to climb aboard with the know incentive that they will be entitled to be involved in part of the biggest oil reserves in the world.”

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Post-9/11 War Debt Will Cost US $8 Trillion in Interest Alone: Report

Post-9/11 War Debt Will Cost US $8 Trillion in Interest Alone: Report:

(ANTIWAR.COM) — The cost of America’s global war on terror has yet to be reckoned with, and there’s a very good reason for that. By and large, the US has not been paying for all of these wars, but rather has been borrowing to pay for the conflict.

In the long run that’s going to be expensive. Paying off the war is going to mean not only paying the prices of the conflict but the massive interest accrued in borrowing the cost of those wars.

A new report suggests that just the interest on all that debt will, over the course of decades of servicing it, cost an estimated $8 trillion. So far, they say, the US has paid $534 billion in overseas contingency operations interest.

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Inflation could blow multi-billion pound hole in UK finances

Inflation could blow multi-billion pound hole in UK finances:

High inflation could cost the British Government tens of billions of pounds in extra interest payments because so much of its debt is index-linked.

More than one-third of gilts – excluding those bought by the Bank of England – are linked to the retail price index measure of inflation.

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“Tomorrow Will Be Ugly”: Venezuela To Restructure All Debt As Creditors Panic Over Imminent Default

“Tomorrow Will Be Ugly”: Venezuela To Restructure All Debt As Creditors Panic Over Imminent Default: 

One week ago, we and many others wondered, if the time has finally come for Venezuela, which was facing a “no grace period” $842 million principal payment for bonds issued by state-run energy company PDVSA, to default on its billions of unrepayable obligations. As we reported then, the liquidity crisis for Venezuela was especially acute because even if it did make the first PDVSA payment, it was facing a second, even larger one today, when PDVSA had to make another $1.121BN payment.

Well, despite a several day transfer delay, Venezuela did make the first payment, however it was not clear if Caracas would also make today’s payment, although as Reuters reported earlier, “markets remained optimistic that President Nicolas Maduro’s government will make the payment, though investors expect delays. PDVSA last week struggled for days to deliver funds for a separate bond payment amid confusion over which banks were charged with transferring the money.”

PDVSA bonds were down slightly in early trading on Thursday, while Venezuelan bonds were mixed, according to Thomson Reuters data.

However, as we previewed again last week, and as Reuters confirmed today, “most economists say a default is increasingly likely in the medium term as Venezuela’s collapsing socialist economic model has left the once-prosperous population destitute and led to deterioration of the OPEC nation’s vital oil industry.”

It now appears that that is indeed the case, and the long overdue Venezuela default, which has been speculated ever since 2014, is finally nigh, because during a nationwide TV address, Venezuela’s socialist president Nicolas Maduro said the country will seek to restructure its global debt after the state-owned oil company makes the PDVSA payment due at midnight. Maduro blamed a financial blockade that is preventing the nation from rolling over its debt, according to Bloomberg.

“I decree a refinancing and restructuring of all foreign debt and all Venezuelan payments,” Maduro said. “We’re going to a complete reformatting. To find an equilibrium, and to cover the necessities of the country, the investments of the country.”

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The Time Has Come: Venezuela May Be In Default In Under 48 Hours

The Time Has Come: Venezuela May Be In Default In Under 48 Hours:

The probability of a Venezuela default has increased substantially with coupon delays, and it could come as soon as this Friday, when an $842 million PDVSA principal plus interest payment is due, and which unlike typical bond payments, does not have a 30 day grace period,

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The State Of Illinois Is “Past The Point Of No Return”

The State Of Illinois Is “Past The Point Of No Return”:

“The State of Illinois is past the point of no return. It does not have the ability to raise taxes or cut spending to the degree necessary to reduce the annual cost of bond and retiree benefits from 33% to a sustainable level…The insolvency is not the result of too much bonded debt, but rather the government promising retirement and other post-employment benefits that aren’t affordable.

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The Consent of the Conned

The Consent of the Conned:

By Charles Hugh Smith

Every single line item in our entire Bernie Madoff scam of a system is cooked.

My theme this week is The Great Unraveling, by which I mean the unraveling of our social-political-economic system of hierarchical, centralized power. Let’s start by looking at how the basis of governance has transmogrified from consent of the governed to consent of the conned.

In effect, our leadership leads by lying. As we know, when it gets serious, you have to lie to preserve the perquisites and power of those atop the wealth-power pyramid, and well, it’s serious all the time now, so lies are the default setting of the entire status quo.

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The U.S. Government Massive ONE-DAY Debt Increase Impact On Interest Expense & Silver ETF

The U.S. Government Massive ONE-DAY Debt Increase Impact On Interest Expense & Silver ETF

H/t reader squodgy:

“Why the Central Banks just cannot raise interest rates…….and what MUST be the eventual trigger for the Economic collapse and reset.”

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Connecticut Capital Hartford Downgraded To Deep Junk, S&P Says “Default Virtual Certainty”

Connecticut Capital Hartford Downgraded To Deep Junk, S&P Says “Default Virtual Certainty”:

The downgrade to ‘CC’ reflects our opinion that a default, a distressed exchange, or redemption appears to be a virtual certainty,” said S&P Global Ratings credit analyst Victor Medeiros.

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“It Blows My Mind”: 100-Year Austrian Bond With Record Duration 3x Oversubscribed

“It Blows My Mind”: 100-Year Austrian Bond With Record Duration 3x Oversubscribed:

“This new 100 year will be the most price-sensitive bond that exists. In any currency. A one basis-point change in yield will move the price of this Austria 2117 issue by 43 cents, or 0.43 percent.”

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Trump Wants To End The Debt Ceiling, Schumer Agrees

Translated: Trump suggests that there should be no constraint at all, not even the fiscally conservative pretense of the debt ceiling law, over how much debt the government can pile on the backs of future generations of Americans. If Obama can add $10 trillion, we are sure Trump can do “better.”

Trump Wants To End The Debt Ceiling, Schumer Agrees:

If you are wondering what is dragging the dollar down to 32-month lows, perhaps you should add this to the calculus…

Politico reports that President Donald Trump suggested to congressional leaders on Wednesday morning that votes to raise the debt ceiling could be done away with altogether, according to three people familiar with the conversation.

In a meeting with GOP and Democratic leaders, in which Trump sided with the Democrats on a fiscal deal to raise the debt ceiling, the president said he believes the votes are unproductive, those people said.

With Congress set to lift the debt ceiling into December as part of the deal, Trump floated the idea that the next time Congress votes to raise the debt ceiling, it could be the last.

He said conversations should happen over the next three months, according to people in the room.

President Trump has now added his thoughts, telling reporters “we have great respect for the sanctity of the debt ceiling,” as he meets with Emir of Kuwait. “There are a lot of good reasons” to get rid of debt ceiling altogether, Trump says, adding that he discussed it with congressional leaders yesterday, and adding that “there will never be a problem” on the debt ceiling.

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In Latest Reversal, Trump Weighs Tying Debt Limit Increase To Harvey Disaster Aid

In Latest Reversal, Trump Weighs Tying Debt Limit Increase To Harvey Disaster Aid:

In the latest U-Turn, Trump has reportedly given up on the idea of a “clean” debt ceiling bill and is now considering attaching an increase in the debt limit to an initial $6 billion request to Congress for disaster relief funding for Hurricane Harvey, Bloomberg reports.

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This $5 Trillion Time Bomb Will Devastate Americans

This $5 Trillion Time Bomb Will Devastate Americans

H/t reader squodgy:

“They, with California, & NYC are at the cliff edge, thanks to stupid, selfish management.
Taking bets on which one first….oh! what about Maryland?
Either way…the knock on effect will be interesting.”

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Former Fed Chairman Alan Greenspan Ominously Warns That The Biggest Bond Bubble In History Is About To Burst

Former Fed Chairman Alan Greenspan Ominously Warns That The Biggest Bond Bubble In History Is About To Burst:

Are we right on the verge of one of the greatest financial collapses in American history?  I have been repeatedly warning that our ridiculously over-inflated stock market bubble could burst at any time, but former Federal Reserve Chairman Alan Greenspan believes that the bond bubble actually presents an even greater danger.  When you look at the long-term charts, you will see that an epic bond bubble has been growing since the early 1980s, and when it finally collapses the financial carnage is going to be unlike anything we have ever seen before.

Since the last financial crisis, global central banks have purchased trillions of dollars worth of bonds, and this has pushed interest rates to absurdly low levels.  But of course this state of affairs cannot go on indefinitely, and Greenspan is extremely concerned about what will happen when interest rates start going in the other direction…

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