Article

2022-06-02 Caucasus/Russia/Central Asia

Russia Fails to Meet Bond Obligations, Triggering Swaps Payout

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Posted by Frank G 2022-06-02 11:50|| || Front Page|| [11131 views ] Top
File under: Commies

#1 a boon for those that entered into a popular trade pitched by banks in the weeks following Russia’s Feb. 24 invasion of Ukraine -- the so-called basis trade where investors buy both the bonds and credit default swaps. The debt in question has already matured, so holders stand to be paid twice -- first on the notes themselves and again on the insurance.

I guess that's legal, (the rich guys getting paid twice), but maybe it shouldn't be. But it's bad for Russia, so I guess it's O.K.

Posted by Bobby 2022-06-02 13:12|| 2022-06-02 13:12|| Front Page Top

#2 Failed because they can't pay or because they decided not to?

Posted by M. Murcek 2022-06-02 13:19|| 2022-06-02 13:19|| Front Page Top

#3 Whoever wrote the green notes accompanying this is totally clueless about arbitrage and credit risk. The losers are the US counterparties that wrote the credit default swaps, not the government bond issuers.

Russia can easily pay the interest on the notes. It's Janet Yellen who's forcing the likes of PIMCO and other US investment houses to swallow 8,000 percent losses on the credit default insurance policies they wrote.

Posted by Blackjack21 2022-06-02 13:27|| 2022-06-02 13:27|| Front Page Top

#4 As I understand, Russia has the cash to pay but is being denied access to the financial mechanism to make the payment. Seems like a bit of a dick move to me, since the people expecting to get paid will not be. But all's fair in love and war and sanctions.

As for those 'green notes' which are *not* about arbitrage, it's a local joke about our local trolls. Right, Ralf?

Posted by SteveS 2022-06-02 13:40|| 2022-06-02 13:40|| Front Page Top

#5 ^ I always feel better about myself if I can work "arbitrage" into a conversation. Or "basis points".

Posted by Matt 2022-06-02 14:16|| 2022-06-02 14:16|| Front Page Top

#6 As in, "The batter really arbitraged the hell out of that curveball. He must have raised his batting average by 3 BPS."

Posted by Matt 2022-06-02 14:23|| 2022-06-02 14:23|| Front Page Top

#7 an 8000 percent loss, hmmm?

Posted by Frank G 2022-06-02 14:52|| 2022-06-02 14:52|| Front Page Top

#8 Oh dear. *snicker* <— about what Matt said.

One very sincerely hopes no one invested their widows’n’orphans money in Russian instruments, or anything else not solidly blue chip.

Posted by trailing wife 2022-06-02 15:28|| 2022-06-02 15:28|| Front Page Top

#9 Can’t, decided not to - does it matter?

Posted by Glenmore 2022-06-02 15:34|| 2022-06-02 15:34|| Front Page Top

#10 They no longer can access enough $ to pay debts in US $. Maybe Badanov can loan them some US cash?

Posted by Omineling Forkbeard1962 2022-06-02 16:56|| 2022-06-02 16:56|| Front Page Top

#11 Russia's rolling in money. Its oil and gas revenues are at all time highs and going higher.

Goldman warns Russia could further choke off natural-gas supplies in response to the EU's oil ban, whacking European growth
Harry Robertson Jun 1, 2022, 8:17 AM

Goldman Sachs has warned Russia could further restrict the supply of natural gas to Europe in response to the EU's oil ban.

The investment bank said more energy squeezes could seriously dent European growth and send Germany into recession.

Posted by Jean-Paul 2022-06-02 17:59|| 2022-06-02 17:59|| Front Page Top

#12 Goldman's economists and Jamie Dimon of JPMorgan expect a severe recession in the US as well this year.

Of course, negotiating with Russia, ending the pointless war and removing US sanctions would help the US and the world to reduce inflation and avoid a recession.

Posted by Jean-Paul 2022-06-02 18:05|| 2022-06-02 18:05|| Front Page Top

#13 OF COURSE they are, Jean-Paul, who was never here before the Commie Russian aggression, just like Alistaire, Billy Budd, and other ~~paid~~ trolls, who all appear to comment at the same time. Nothing to see here.

Posted by Frank G 2022-06-02 18:58|| 2022-06-02 18:58|| Front Page Top

#14 Jamie Dimon says the American Recession will be like a "hurricane." I believe he's referring to stagflation, or a combination of severe economic contraction and hyperinflation.

Posted by Jean-Paul 2022-06-02 19:17|| 2022-06-02 19:17|| Front Page Top

#15 The only way the government can survive it's borrowing is to make the current USD worthless and do away with it.

Posted by Besoeker 2022-06-02 19:19|| 2022-06-02 19:19|| Front Page Top

#16 Of course, negotiating with Russia, ending the pointless war and removing US sanctions would help the US and the world to reduce inflation and avoid a recession.

Or drill, baby, drill AGAIN and run those pipelines can make the US energy independent as well as hammering the world market with cheaper oil.

Posted by Procopius2k 2022-06-02 19:31|| 2022-06-02 19:31|| Front Page Top

#17 I wonder how many Canadian truckers and their supporters had their bank accounts frozen.

I wonder how many Tamara Lich's there are who got thrown into jail without bail.

Yeah, yeah, apples and oranges. Or is it?

Posted by DooDahMan 2022-06-02 20:40|| 2022-06-02 20:40|| Front Page Top

#18 Socks to be Russia. Maybe they should pull their army back within their borders.

Posted by Rob Crawford 2022-06-02 21:14|| 2022-06-02 21:14|| Front Page Top

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