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Thursday, 25 February 2016

Sell Off Grips Emerging Market Debt

Every form of debt in every corner of the world is in trouble leading to a buildup in pressure on the banking system. Things are so bad that Central Banks pay you to take their debt - a tricky way to shore up the crippled banking system.

All this cannot be sustained and we are overdue for a major implosion  similar to Carl Icahn who  has lost billions of his oil fortune in the past few years. 

 Look out - there is more coming!



Foreign Investors Dump Emerging Market Debt




“The currency volatility means investors are unwilling to stomach these bonds. And as growth slows in the countries and the bond yields go higher, the cost of servicing debt is getting more difficult for these countries.”







The country already tops measures of the world’s most miserable economy, with inflation of 181 percent last year, a currency that has collapsed on the black market to less than 1 percent of its official value and shortages of basic goods such as detergent and antibiotics. It’s a horrific turnaround for what was once one of the region’s most stable democracies, famous for its big cars, cheap gasoline and beauty queens




Halfway through a two-year recession that’s forecast to be the worst since at least 1901, Brazil finds itself stuck in a grinding cycle of job loss and falling consumer spending. National unemployment has climbed to 9 percent as retail sales tank and industrial production contracts for 22 straight months, government reports show.




The move comes as crude-oil prices have fallen about 12% so far this year and have plunged 34% over the past 12 months, putting the finances of energy companies under pressure.

  


More Subprimes Borrowers Are Falling Behind on Their Auto Loans  

The delinquency rate reaches its highest level since 2010 


Rising delinquencies come as a warning sign that more loans may end up in default down the road, said John McElravey, an analyst at the bank. What may be most troubling, however, is that the default rate is already climbing, up to 12.3 percent in January from 11.3 the prior month. That is the highest rate since 2010, the data show. 




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