IMF battling to save Ukraine

It seems the struggle for Ukraine isn't limited to the cold Eastern territories bordering Russia. In Davos today the IMF and Ukraine met to work out more emergency financing. Of course Ukraine needs more money, they are fighting a war against a much larger neighbor, but an interesting twist to the financing story ensued.

www.businessweek.com...

After the meeting Ukraine officials said they were going to talk to bondholders to discuss terms. Typically this means people are going to get paid later than they expected, however in the case of Ukraine some people think the IMF might also be pushing for a haircut of current bond holders. Of course the 'terms' were never clarified, however markets immediately started incorporating a higher risk of a bondholder haircut into prices.

Generally this type of story is boring. Ho Hum, another country in financial trouble. However in Ukraine's case one of the largest bondholders is the aggressive neighbor it's fighting on the battlefields, Russia. Just prior to the Ukrainian revolution Putin actually ponied up $3 billion in financing to help convince Ukrainian politicians to stay with mother Russia. Putin foolishly handed over the huge wad of cash immediately, which any parent knows is a recipe for disaster. Apparently those Kiev politicians didn't share the wealth enough as they were shortly afterwards booted out of office. Putin's $3 Billion was gone into the deep hole formerly known as Ukraine's Bank reserves. Of course the big Russian state banks also hold a ton of Ukrainian bonds but it's difficult to know exactly how much. A haircut is going to be expensive for Russia.

www.reuters.com...

Of course the other big Ukraine investor is US giant Franklin Templeton. Holding about 40% of Ukrainian government bonds or so people guess. Looks like free haircuts for lots of bankers around the world! *Wild Cheers erupt around the World*

By linking bond restructuring to new financing the IMF is effectively trying to neutralize the $3 Billion Russian bond terms which allow Russia to call in the loan at any time they want right now. Of course Russia would rather hold the financial hammer over Ukraine's head for as long as possible and drop it at the worst time. The IMF may be playing a game of chicken with Russia, daring them to refuse changing the bond terms. If Russia refuses to delay payment then Ukraine defaults immediately, everyone gambling in Ukraine loses their shirts after which a massive IMF recovery package saves the day and keeps Ukraine fighting.

If you think bankers don't go for the throat like this then you don't know a banker! They'll boot you out of your home and try to claim your breathing assistance machine is a fixture and must stay. There is going to be Bankers losing shirts in this battle for Ukraine. The question is only a matter of which countries citizens will have to foot the bill...

a reply to: noeltrotsky

There is going to be Bankers losing shirts in this battle for Ukraine.

They are the only ones winning. If they succeed in starting a war (loans for weapons), destroying the infrastructure, (loans for rebuilding) and then the endless interest payments on the unpayable debt will see that they own everyone and everything for e_v_e_r.

How austere.

a reply to: noeltrotsky

Why do you think the bankers started this? Soros has a HUGE amount of bonds from Ukraine.His NGO has been in Ukraine for years,he admitted as much. And now that the chickens have come home to roost he wants the tax payers to bail Ukraine out so he doesn't lose his money. Never mind that Russia was keeping Ukraine's economy going, that was disrupted .So now Ukraine goes around the world begging like street people from every country they can to prop up their economy. Hell would freeze over before I would give a dime,yet we will have no choice since our congress and president know better what we need then we do. That whole country needs to be blown up with all the corruption that is in it and has been. The corruption didn't end with the ouster of Yanukovych,because the whole darn country is corrupt! Just like the US.

Oh wonderful I love how that works.

Well guess what people, business is all leverage and what your witnessing I'd someone accumulating power.

Think I'm wrong?

I agree intrptr, It looks like the Ukrainians will travel back in time and once again become debt serfs, sending everything of value they produce as interest payments and basically live like dogs themselves in a Malnourished/Cold State. Welcome To The Banksters New World Order. The same as it ever was. I like your way of thinking a reply to: intrptr

Shavedfish

Yay! The IMF is here to save the day! Lifelong debt is awesome!

Jamaica, Argentina and Ecuador would like to extend a huge thank you to the IMF and World Bank!

" IMF battling to save Ukraine "

And not for a penny more than generally accepted interest and handling fee rates !!!



Ukraine: another screaming success story of government.

The title should read...

" IMF Battling To Enslave Ukraine "

a reply to: noeltrotsky

The same IMF which didn't save Greece at all. Oh and in other news Ukraine lost the battle for the airport i guess thats not news worthy here.

a reply to: learnatic

Wolfowitz pretty much laid out the US's objective in Ukraine right there...and most other places around the world. Great quote! They don't really 'care' about Ukraine, they only care that it isn't controlled by Russia. Much the same as the way the US built up Georgia to be more independent.

By 'hostile power' I'm pretty sure he means ANYONE with the resources to challenge the US. The US has achieved dominance as a world power and would like to retain that edge. If Britain was suddenly to gain enough land and resources to challenge I'm sure they would be considered a hostile power as well.

a reply to: Dimithae

I don't know how extensive Soros' position is in Ukraine. The guy has so much money I'm sure some of it is there, but I would doubt he's got more than 10 million. His vocal support for Ukraine is simply his anti-Russia position I think, not his protecting some expensive assets.

I think Soros is angling to be an insider at the ground floor of the state fire sale of assets when the IMF forces Ukraine to change the way it does business. Soros probably wants to pick off the cherries and make a massive profit...like the Russian Oligarchs did not too long ago. One of the links I quoted talks about him working with the new Ukrainian government on reforms.

a reply to: Bone75

You're right! Asking the IMF to save you is like drawing a Pentagram on your living room floor and sacrificing a goat while naked inside the lines. You're going to get in a lot of trouble both ways.

the IMF is effectively trying to neutralize the $3 Billion Russian bond terms which allow Russia to call in the loan at any time they want right now. Of course Russia would rather hold the financial hammer over Ukraine's head for as long as possible

They're butchering each other on a battlefield.. using tanks..

For some reason economic agreements on loans etc dont feel like something either side actually expects to be met.

originally posted by: Agit8dChop
They're butchering each other on a battlefield.. using tanks..
For some reason economic agreements on loans etc dont feel like something either side actually expects to be met.

You don't know Bankers! Wars come and Wars go but there is always an accounting for the money! This thread is an effort to highlight a more shadow 'war' that goes on between money men during times of crisis.

Russia lost a ton of money in the Cypress crisis due to the way the West structured the 'recovery'. They snatched depositors money for the first time! We all know why they decided to do that...poor Russian Oligarchs got nailed! Believe me the same result for Russia in Ukraine is being engineered in Davos boardrooms the past few days.

a reply to: noeltrotsky

This is the kind of numbers I have been coming up with. They fluctuate from 20 million to over 100 million. Soros isn't saying as usual but you can bet its a really pretty penny either way.

www.thenewamerican.com...

a reply to: Dimithae

Good link! Soros is in Ukraine pretty deep obviously. I thought it was more a pet project to stick it to Russia but looks like he's angling to own a good portion of Ukraine.

a reply to: noeltrotsky

They all have each other by the throat, if Russia takes the hit because of this they let some Russian banks go belly up who have debt to European banks and the European tax payers are now on the hook for that, and as always the ordinary citizens will be paying for it.