It is the 14th of October 2019

News

In "Mysterious" Bond Sale, Venezuela Issues $5 Billion In Debt To Itself With China As Underwriter

While Venezuela CDS suggest the country's default odds remain well over 90%, and its currency on the black market continues to plunge into the abyss of hyperinflation, something odd happened today: Venezuela’s government issued $5 billion in dollar debt for the first time in more than five years, selling bonds in an opaque transaction to the state bank Banco de Venezuela SA and the central bank, Reuters and Bloomberg report. What makes this "unorthodox operation" particularly strange, is that the government is effectively selling debt, and raising dollar funds from itself - it owns both the Banco de Venezuela and the central bank; it is also strange in that the transaction, according to Reuters, does not immediately bring in new funds for the cash-strapped OPEC nation.

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Euronomics Decomposing, Raise a Glass of Cheer!

This article by David Haggith was first published on The Great Recession Blog: 

By ECB - European Central Bank (Flickr.com) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

Europeans must have been delighted to discover that one thing is working as well as it has since the start of the Great Recession. Behemoth banks that are failing are still able to pay their Christmas bonuses to their top executives and give nice dividends to their shareholders thanks to Super Mario Draghi. 

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Monte Paschi "Scrambles" With Last Minute Capital Increase To Avoid Nationalization

Having picked a new prime minister to replace Matteo Renzi, when as reported this morning Italian president Sergio Mattarella asked Foreign Minister Paolo Gentiloni, a loyalist from Renzi's Democratic Party, to form a new government, the chaos surrounding Italy's political future appears to be subsiding, which as we said this morning, is welcome news for the future of Monte Paschi, as Italy's third largest bank may once again avoid a state bailout should enough private investors turn up and inject funds into the failing financial institution, the world's oldest.

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