Russia in Default, Economy Circles the Bowl by captaincrunch

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Russia in Default, Economy Circles the Bowl

POSTED BY: CAPTAINCRUNCH
UPDATED: Saturday, October 8, 2022 12:32
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Monday, April 11, 2022 11:13 AM

... stay crunchy...

https://edition.cnn.com/2022/04/11/investing/russia-default-sp/index.h
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London (CNN Business)Russia has defaulted on its foreign debt because it offered bondholders payments in rubles, not dollars, credit ratings agency S&P has said.

Russia attempted to pay in rubles for two dollar-denominated bonds that matured on April 4, S&P said in a note on Friday. The agency said this amounted to a "selective default" because investors are unlikely to be able to convert the rubles into "dollars equivalent to the originally due amounts."
According to S&P, a selective default is declared when an entity has defaulted on a specific obligation but not its entire debt.
Moscow has a grace period of 30 days from April 4 to make the payments of capital and interest, but S&P said it does not expect it will convert them into dollars given Western sanctions that undermine its "willingness and technical abilities to honor the terms and conditions" of its obligations.
A full foreign currency default would be Russia's first in more than a century, when Bolshevik leader Vladimir Lenin repudiated bonds issued by the Tsarist government.
Russia cannot access roughly $315 billion of its foreign currency reserves as a result of Western sanctions imposed following its invasion of Ukraine. Until last week, the United States allowed Russia to use some of its frozen assets to pay back certain investors in dollars. But the US Treasury has since blocked the country from accessing its reserves at American banks, part of its effort to ramp up pressure on Russian President Vladimir Putin and further diminish his war chest.

JPMorgan estimates that Russia had about $40 billion of foreign currency debt at the end of last year, with about half of that held by foreign investors.

Moscow prepares to go to court
Russia is now planning legal action.
"We will sue, because we undertook all necessary action so that investors would receive their payments," Finance Minister Anton Siluanov told pro-Kremlin Izvestia newspaper on Monday.
"We will show the court proof of our payments, to confirm our efforts to pay in rubles, just as we did in foreign currency. It won't be a simple process," he added. He did not say who Russia planned to sue.
Kremlin spokesperson Dmitry Peskov said in a press conference last week that any default would be "artificial" because Russia has the dollars to pay — it just can't access them.

"I'd gladly pay you Thursday for a hamburger today..."

"There are no grounds for a real default," Peskov said. "Not even close."

Translation: "We're effed."

Russia has gone to great lengths to artificially prop up the ruble — which sank by as much as 40% to less than one US cent in the days after the invasion — including by hiking interest rates to 20%, and by forcing exporters to swap most of their foreign currency revenues for rubles.
That measure is still in place but the central bank has decided to relax some other restrictions, Reuters reported Monday, and last week announced that it was cutting interest rates to 17%.
The ruble was trading at 79 to the US dollar on Monday, according to data from Refinitiv. That's about 5% weaker than on Saturday.

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Monday, April 11, 2022 12:39 PM

SIGNYM

I believe in solving problems, not sharing them.

The ACTUAL defaulting entity is the USA, which is refusing to pay Russia what it owes. Russia can make a "force majeure" argument... not that it would make any difference to the credit rating agnecies, which are political actors, not objective analysts.

The credit agencies didn't see Enron coming, didn't see 2008 coming, and consistently undervalue Russia's credit-worthiness according to independent economic analyses.

While the USA tries to destroy the ruble, Russia's fundamental ECONOMY .. i.e. the activties of production and consumption (you are conflating financialism with economics) is in better shape than Europe's. Russia's economy is not circling the drain, and they can withstand our financial war better than we can.

-----------
Pity would be no more,
If we did not MAKE men poor - William Blake

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Monday, April 11, 2022 3:25 PM

6IXSTRINGJACK

2x4 studs are over $7.00 today.

Nobody gives a shit about Russia's economy.

--------------------------------------------------

Me: "Remember Covid?"

Useless Idiots: "What's Covid, durr? Russia, Ukraine, Putin, NATO *drool*. DURRRR!!!!"

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Tuesday, April 12, 2022 9:25 AM

THG

Quote:
Originally posted by SIGNYM:

The ACTUAL defaulting entity is the USA, which is refusing to pay Russia what it owes. Russia can make a "force majeure" argument... not that it would make any difference to the credit rating agnecies, which are political actors, not objective analysts.

The credit agencies didn't see Enron coming, didn't see 2008 coming, and consistently undervalue Russia's credit-worthiness according to independent economic analyses.

While the USA tries to destroy the ruble, Russia's fundamental ECONOMY .. i.e. the activties of production and consumption (you are conflating financialism with economics) is in better shape than Europe's. Russia's economy is not circling the drain, and they can withstand our financial war better than we can.

It all ties in together comrade. The Ruble and Russian accounts frozen in banks around the world. Every action has a reaction.

T

Vladimir Putin Is Now Purging His Own Over War Failures

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Tuesday, April 12, 2022 1:21 PM

CAPTAINCRUNCH

... stay crunchy...

Quote:
Originally posted by SIGNYM:
The ACTUAL defaulting entity is the USA, which is refusing to pay Russia what it owes. Russia can make a "force majeure" argument... not that it would make any difference to the credit rating agnecies, which are political actors, not objective analysts.

The credit agencies didn't see Enron coming, didn't see 2008 coming, and consistently undervalue Russia's credit-worthiness according to independent economic analyses.

While the USA tries to destroy the ruble, Russia's fundamental ECONOMY .. i.e. the activties of production and consumption (you are conflating financialism with economics) is in better shape than Europe's. Russia's economy is not circling the drain, and they can withstand our financial war better than we can.

Why do you have to be asked for cites almost every time you make these "Nuh-uh" pronouncements?

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Tuesday, April 12, 2022 1:55 PM

SIGNYM

I believe in solving problems, not sharing them.

Quote:
Originally posted by captaincrunch:
Quote:
Originally posted by SIGNYM:
The ACTUAL defaulting entity is the USA, which is refusing to pay Russia what it owes. Russia can make a "force majeure" argument... not that it would make any difference to the credit rating agnecies, which are political actors, not objective analysts.

The credit agencies didn't see Enron coming, didn't see 2008 coming, and consistently undervalue Russia's credit-worthiness according to independent economic analyses.

While the USA tries to destroy the ruble, Russia's fundamental ECONOMY .. i.e. the activties of production and consumption (you are conflating financialism with economics) is in better shape than Europe's. Russia's economy is not circling the drain, and they can withstand our financial war better than we can.

Why do you have to be asked for cites almost every time you make these "Nuh-uh" pronouncements?

Because even when I put them up, you don't comprehend them.

The Duran
Michael Hudson
Moon of Alabama (B's blog, from Germany)
Zerohedge
Tom Luongo

If you care to read Russian expats
Dmitry Orlov

-----------
Pity would be no more,
If we did not MAKE men poor - William Blake

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Friday, April 15, 2022 8:10 PM

SECOND

The Joss Whedon script for Serenity, where Wash lives, is Serenity-190pages.pdf at https://www.mediafire.com/two

Russia Loses Another 5G Vendor

Nokia just backed out of Russia, thus leaving the country's cellular networks heavily dependent on Huawei. This links up with a bunch of things that I can't imagine were part of Putin's plan. Nokia's home country of Finland now wants to join NATO, and Russia has no other choice but to become an economic vassal state of China. Is that what Putin wanted? Really?

Russia is thought to rely heavily on Nokia's technology throughout its network infrastructure and for spying on its own citizens, so this will have a bigger impact than many of the other tech companies who are leaving.

https://www.pcmag.com/news/nokia-is-pulling-out-of-russia

The Joss Whedon script for Serenity, where Wash lives, is Serenity-190pages.pdf at https://www.mediafire.com/two

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Saturday, October 8, 2022 12:32 PM

THG

Quote:
Originally posted by SIGNYM:
Quote:
Originally posted by captaincrunch:
Quote:
Originally posted by SIGNYM:
The ACTUAL defaulting entity is the USA, which is refusing to pay Russia what it owes. Russia can make a "force majeure" argument... not that it would make any difference to the credit rating agnecies, which are political actors, not objective analysts.

The credit agencies didn't see Enron coming, didn't see 2008 coming, and consistently undervalue Russia's credit-worthiness according to independent economic analyses.

While the USA tries to destroy the ruble, Russia's fundamental ECONOMY .. i.e. the activties of production and consumption (you are conflating financialism with economics) is in better shape than Europe's. Russia's economy is not circling the drain, and they can withstand our financial war better than we can.

Why do you have to be asked for cites almost every time you make these "Nuh-uh" pronouncements?
Because even when I put them up, you don't comprehend them.

The Duran
Michael Hudson

Moon of Alabama (B's blog, from Germany)
Zerohedge
Tom Luongo

If you care to read Russian expats
Dmitry Orlo

She doesn't post links because her source is zerohedge. Hey comrade signym, comprehend this.

I told you so...

T

Ukrainians celebrate as explosion destroys Crimea bridge crucial to Russia

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