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Well, there's a risk of a Russian default now. The fed is planning to raise interest rates even more now and shrink their balance sheet by 1t per year. All that
by shimmy568 5y ago
Well, there's a risk of a Russian default now. The fed is planning to raise interest rates even more now and shrink their balance sheet by 1t per year. All that pump that came during the pandemic so share prices didn't go down has to dump at some point.
Either that or we'll continue to see >5% inflation for a while, and that's a scary thought. Especially since wages aren't going up nearly as fast
- onlyrealcuzzo 5y agoWages were up 5%+ for almost all of the Pandemic: https://www.ssa.gov/oact/cola/awidevelop.html https://www.ssa.gov/oact/cola/awidevelop.html
- UncleOxidant 5y ago> Well, there's a risk of a Russian default now. I think that risk is 100% as in it's a certainty that Russia will default. Defaulting means not making loan repayments. The ruble is basically worthless so they don't have much to repay their debt with and they can't sell assets to raise the money due to sanctions. Another aspect to consider is that they probably are eager to default at this point as doing so could cause financial damage in the West.
- mohanmcgeek 5y ago> eager to default at this point as doing so could cause financial damage in the West. What about Russian banks and Russian bond holders? External debt is generally only a fraction of the total debt
- UncleOxidant 5y agoI'm sure they'll prioritize internal debt-holders of debt denominated in rubles. It's the debt owed to external entities that's denominated in other currencies that will be defaulted on.
- xyzzyz 5y agoRuble trades now at something like 25% discount compared to pre invasion. Huge hit, to be sure, but I’d hardly call it “worthless”.