‘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.

Read more

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.”

* * *

PayPal: Donate in USD
PayPal: Donate in EUR
PayPal: Donate in GBP

Venezuela Signs $3.2 Billion Debt Restructuring Deal With Russia

Venezuela Signs $3.2 Billion Debt Restructuring Deal With Russia:

As Venezuela teeters right on the brink of complete financial collapse, Bloomberg reports that Russia has agreed to restructure roughly $3.2 billion in outstanding obligations.  While details of the restructuring agreement are scarce, both sides reported that the deal spreads payments out over 10 years with minimal cash service required over the next six years.

Russia signed an agreement to restructure $3.15 billion of debt owed by Venezuela, throwing a lifeline to a crisis-wracked ally that’s struggling to repay creditors.

The deal spreads the loan payments out over a decade, with “minimal” payments over the first six years, the Russian Finance Ministry said in a statement. The pact doesn’t cover obligations of state oil company Petroleos de Venezuela SA to its Russian counterpart Rosneft PJSC, however.

Read more

U.K. Litigation Cases On Defaulted Consumer Debts Soar Beyond 2008 Levels

U.K. Litigation Cases On Defaulted Consumer Debts Soar Beyond 2008 Levels:

Last month, S&P warned that UK lenders could incur £30 billion of losses on their consumer lending portfolios consisting of credit cards, personal and auto loans if interest rates and unemployment rose sharply.  Much like in the U.S., S&P warned that “loose monetary policy, cheap central bank term funding schemes and benign economic conditions” had fueled an “unsustainable” yet massive expansion of consumer credit that will inevitably end badly.

Per The Guardian:

The rapid rise in UK consumer debt to £200bn from car finance, personal loans and credit cards is unsustainable at current growth rates and should raise “red flags” for the major lenders, ratings agency Standard & Poor’s has warned.

Read more

Venezuela, Russia Agree on Debt Restructure as Bondholders Meet

Venezuela, Russia Agree on Debt Restructure as Bondholders Meet:

President Maduro: “We have reached an agreement to refinance and restructure the debt with Russia”

Venezuelan President Nicolás Maduro announced this Sunday that the government had reached an agreement to refinance and restructure the Venezuelan debt with Russia.

“We have reached an agreement with Russia, this week will be signing an agreement where refinancing is established,” the president said.

Read more

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.

Read more

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.

Read more

“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.”

Read more

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,

* * *

PayPal: Donate in USD
PayPal: Donate in EUR
PayPal: Donate in GBP

MARKETS… WE GOT TROUBLE: Debt & Brain-Dead Retail Investors Prop Up Stocks

MARKETS… WE GOT TROUBLE: Debt & Brain-Dead Retail Investors Prop Up Stocks:

As the Dow Jones Index hits another all-time high today, smart money is rushing to the exits.  You see, smart money knows when something is too good to be true.  Unfortunately for the retail investor who is suffering from acute BRAIN DAMAGE, they are doing quite the opposite.  As institutions sellout on each new market price rise, retail investors are happily buying… hand over fist.

And why shouldn’t they?  These are good times.  Well, maybe not for Americans living in Houston, parts of Florida, California or in Puerto Rico.  Whatever happened to the news on the massive flooding and hurricane damage in Houston, Florida and Puerto Rico?  I remember seeing videos of Miami Beach High-Rise Condos with seawater 5-8 feet surrounding the entire area.  Does anyone have an idea of what happens to electrical systems when salt water floods buildings?  It’s not good.

Regardless… the amount of destruction major U.S. cities have experienced in the past three months is like nothing we have witnessed before.  Regrettably, a lot of these homes and businesses will never be rebuilt.  Not only don’t we have the money to do it, more importantly, we also don’t have the available energy.  While the massive destruction by hurricanes, flooding and fire have not impacted the stock market currently, they will.

As I mentioned at the beginning of the article, retail investors are propping up the markets.  However, they aren’t the only ones, or should I say, the only factor in keeping the markets from falling off a cliff.  Thanks to Uncle Sam, total U.S. debt has increased by $590 billion in just the past month and a half.  Here is a table of U.S. debt  from the data published by the fine folks at TreasuryDirect.gov:

H/t reader Squody.

* * *

PayPal: Donate in USD
PayPal: Donate in EUR
PayPal: Donate in GBP

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.

* * *

PayPal: Donate in USD
PayPal: Donate in EUR
PayPal: Donate in GBP

WORLD’S LARGEST OIL COMPANIES: Deep Trouble As Profits Vaporize While Debts Skyrocket

WORLD’S LARGEST OIL COMPANIES: Deep Trouble As Profits Vaporize While Debts Skyrocket:

The world’s largest oil companies are in serious trouble as their balance sheets deteriorate from higher costs, falling profits and skyrocketing debt.  The glory days of the highly profitable global oil companies have come to an end.  All that remains now is a mere shadow of the once mighty oil industry that will be forced to continue cannibalizing itself to produce the last bit of valuable oil.

I realize my extremely unfavorable opinion of the world’s oil industry runs counter to many mainstream energy analysts, however, their belief that business, as usual, will continue for decades, is entirely unfounded.  Why?  Because, they do not understand the ramifications of the Falling EROI – Energy Returned On Invested, and its impact on the global economy.

Read more

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.

Read more

STUNNING U.S. GOVERNMENT DEBT INCREASE IN PAST FEW DAYS…. While No One Noticed

STUNNING U.S. GOVERNMENT DEBT INCREASE IN PAST FEW DAYS…. While No One Noticed:

As the stock market continues to rise on the back of some of the worst geopolitical, financial, and domestic news, the U.S. Treasury has been quietly increasing the amount of government debt, with virtually no coverage by the Mainstream or Alternative Media. So, how much has the U.S. debt increased in the past few days? A bunch.

The surge in U.S. debt that took place over the past two days all started when the debt ceiling limit was officially allowed to increase on Sept 8th. In just one day, the U.S. Treasury increased the public debt by $318 billion:

H/t reader squodgy:

“Gotta Blow up soon, it’s TOTALLY unserviceable and unsustainable.”

* * *

PayPal: Donate in USD
PayPal: Donate in EUR
PayPal: Donate in GBP

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.”

* * *

PayPal: Donate in USD
PayPal: Donate in EUR
PayPal: Donate in GBP

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.

* * *

PayPal: Donate in USD
PayPal: Donate in EUR
PayPal: Donate in GBP

“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.”

* * *

PayPal: Donate in USD
PayPal: Donate in EUR
PayPal: Donate in GBP

It’s Official: US Debt Finally Tops $20 Trillion, Jumps By $318 Billion In One Day

It’s Official: US Debt Finally Tops $20 Trillion, Jumps By $318 Billion In One Day:

Following President Trump’s sign off last Friday on a short-term debt-ceiling/government funding/hurricane aid deal (thanks to Democrats’ votes), the US Treasury was finally freed from the shackles of the debt ceiling which it hit nearly one year ago  and which meant that US federal debt would be at roughly $19.808 trillion for months.

Well, no more: according to the latest Daily Trasury Statement as of Friday, total US debt surged by $317.6 billion from its Thursday closing print of $19.845 trillion, following the short-term debt suspension which kicked the can through December 8, to finally rise above the “psychological barrier” of $20 trillion, or $20,162,176,797,904.13 to be precise.

* * *

PayPal: Donate in USD
PayPal: Donate in EUR
PayPal: Donate in GBP