Prices had one of their worst days of the year on Friday of last week and drifted marginally lower again on Monday of this week, stabilizing some on Tuesday. Friday’s pounding came because Saudi Arabia announced it would not participate in the oil supply freeze that it negotiated with Russia since Iran is not going to join the freeze….
BNP Paribas says Russia no longer has enough reserves to cover external debt and enters this crisis ‘twice as levered’ as it was before the Lehman crash
Central bank data show that a blitz of currency intervention depleted reserves by $26bn in the two weeks to December 26, the fastest pace of erosion since the crisis in Ukraine erupted early last year.
Credit defaults swaps (CDS) measuring bankruptcy risk for Russia spiked violently on Tuesday, surging by 100 basis points to 630, before falling back slightly.
Markit says this implies a 32pc expectation of a sovereign default over the next five years, the highest since Western sanctions and crumbling oil prices combined to cripple the Russian economy.
Today David Stockman warned King World News that investors need to brace themselves for historic and worldwide financial destruction. KWN takes Stockman’s warnings very seriously because he is the man former President Reagan called on in 1981, during that crisis, to become Director of the Office of Management and Budget and help save the United States from collapse. Below is what Stockman, author of the website contracorner, had to say in his powerful interview.
Eric King: “David, the man who is counsel to big money around the world, Michael Belkin, just spoke with KWN and issued a dire warning for the financial markets. I just wondered how you see things at this point with the Dow recently tumbling and everything that is happening across the globe? What should we expect?”
Stockman: “Well, the watchword at this point is stay out of harm’s way. We are headed into a perfect storm of policy failures. This is not simply a failure by the Fed, which has inflated this massive bubble and painted itself into a corner with no clue how to get out, but we are also seeing an absolute failure of American world dominance…
“Our foreign policy is collapsing everywhere and yet the Washington war party keeps wanting to do more of the same. This confrontation with Putin is utterly out of hand and unnecessary. Now we have a trade war going that is going to ricochet through an already fragile European economy. Continue reading