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Lebanon to default on debt payments

Lebanon is to default on a foreign debt payment for the first time in its history as the country struggles with a major financial crisis.

Prime Minister Hassan Diab said Lebanon would not be making a bond payment of $1.2bn (£900m) due on Monday.

"The debt has become bigger than Lebanon can bear, and bigger than the ability of the Lebanese to meet interest payments," Mr Diab said.

BBC

 

Due to coronavirus impact, I expect more countries can follow this year.

 

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3 hours ago, rollover said:

 

Due to coronavirus impact, I expect more countries can follow this year.

 

If this chain reaction starts, then it means lower bond prices and higher bond yields, aka rising interest rates. 

The thing is you can either publicly default (like Lebanon) or do it more stealthy like the US. 

I am wondering if COVID19 might in effect act like a war type situation. In the past when nations have reached such economic impasses it has been war war rather than jaw jaw, but this has helped to facilitate a way out of the economic trap, largely by justification for increased fiscal spending. Later the idea of raising spending was codified by the Economist John Maynard Keynes. 

May be the Ghost of JMK is going to be resurrected. 

 

Edited by Mikhail Liebenstein
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45 minutes ago, Mikhail Liebenstein said:

Later the idea of raising spending was codified by the Economist John Maynard-Keynes. 

May be the Ghost of John MK is going to be resurrected.

Maynard was his middle name, not part of his surname.

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This thread has just given me a thought!

1) Which large European Country (a bit smaller than the UK) is regularly cited as having a bad debt to GDP ratio?

2) And which European country is currently having the worst time so far with COVID19?

You guessed it!

Also, second thought, which countries are heavily indebted to China and might use COVID19 reparations as an excuse to not repay their debts once a precedent is set? 
 

 

 

Edited by Mikhail Liebenstein
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42 minutes ago, Mikhail Liebenstein said:

1) Which large European Country (a bit smaller than the UK) is regularly cited as having a bad debt to GDP ratio?

and which countries banks lent them all that money... the UK

It is going to be interesting to see if, having left the EU, our government still ends up bailing out the UK banks (again) due to all their European lending.

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2 hours ago, Habeas Domus said:

and which countries banks lent them all that money... the UK

It is going to be interesting to see if, having left the EU, our government still ends up bailing out the UK banks (again) due to all their European lending.

A very good point, follow the chain!

i imagine Germany is in deep too.

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25 minutes ago, The Spaniard said:

Are 'money', 'debt', 'credit' etc... not just social constructs like 'man' and 'woman'?

The former are social constructs, the latter, factual biological realities.

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They either print money to bailout the little people - or waste money in a futile effort to prop up shares. These are politicians who have spent their entire lives working at making the rich richer. Most do not understand its a debt based money system. The UK governments reluctance to give sick pay to the low paid is a case in point - they have ensured that millions of self employed and gig economy workers will continue to infect others because they can't afford to take time off. That will cost all of us a lot more in money and deaths than it will save.

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1 hour ago, The Spaniard said:

Are 'money', 'debt', 'credit' etc... not just social constructs like 'man' and 'woman'? ?

Can woke governments/banks/people etc...  not simply self-identify as creditors rather than debtors?

Job done! ☺️

 

52 minutes ago, Locke said:

The former are social constructs, the latter, factual biological realities.

Please don't start infecting threads on this site with the woke vs anti-woke culture war, it's bad enough that it has poisoned everything else on the internet. If you guys want to do this material you have facebook, twitter, Conservativehome, every single newspaper comment section etc to choose from. HPC.co.uk feels like the last outpost of sanity.

Edited by Dorkins
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5 minutes ago, Dorkins said:

Please don't infect this site with the woke vs anti-woke culture war, it's bad enough that it has poisoned everything else on the internet.

Did my use of emojis not indicate the facetious nature of my earlier post?

BTW I disagree with standing aside from the raging 'woke' culture war.

For me, free speech is far too precious for such acquiescence.

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44 minutes ago, Dorkins said:

 

Please don't start infecting threads on this site with the woke vs anti-woke culture war, it's bad enough that it has poisoned everything else on the internet. If you guys want to do this material you have facebook, twitter, Conservativehome, every single newspaper comment section etc to choose from. HPC.co.uk feels like the last outpost of sanity.

You are carrying water for the deranged by self censoring and attempting to censure me. Personally, I don't care to debate this topic as the facts are the facts. If normal people stand shoulder to shoulder here against the mentally unwell, they will not gain a foothold.

My answer to the original quest ion is "yes", because value is subjective and money is fictional, in contrast with male and female.

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The central bank of Russia has released a statement saying it will halt purchasing foreign currency for 30 days in an effort to "reduce the volatility of financial markets in the face of significant changes in the global oil market".

Bloomberg reports that the government may rely on its £114bn wealth fund to buy and prop up the price of the ruble, after the breakdown in talks with Opec triggered a price war.

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https://oilprice.com/Energy/Energy-General/Junk-Status-Oil-Nations-Face-Serious-Credit-Downgrades.html

Ratings Agency Fitch warned on Tuesday that a new wave of sovereign rating downgrades could be in the works if the oil slump continues, according to Reuters.

In additional, multi-notch rating cuts may be expected for junk-rated oil and gas firms.

The ratings of Saudi Arabia, Iraq, Oman, Nigeria, and Angola, which rely heavily on the price of crude oil and have a fixed exchange rate “are of course particularly vulnerable,” Jan Friederich, Fitch’s top Middle East and Africa sovereign analyst told Reuters. 

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  • 419 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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