President Rafael Correa’s game of chicken with Ecuador’s external creditors finally came to an ugly end on Friday, when he announced he would prefer to take on the ‘monster’ bondholders in court rather than pay up. While many Ecuadoreans will no doubt admire their president’s courage for standing up to those responsible for the country’s [Read more...]

On November 14 Ecuadorean President Rafael Correa’s government took its first major step along its ‘citizens’ revolution’, by refusing to pay US$30.6mn of external debt on time. Correa has long threatened to put ‘life’ [social spending] before debt’, however his rhetoric was finally met with action (or rather inaction) last Friday when Finance Minister María [Read more...]

Over the past several months, there has been a clear disconnect between credit default swap (CDS) markets and sovereign ratings in the emerging Europe region. While CDS spreads across the board have spiked to record highs, in some cases beyond 1,000 basis points (Kazakhstan, Russia, Ukraine, Latvia), the downgrades from the ratings agencies have been [Read more...]

Here we are again. Another global economic slowdown, another spike in global risk aversion, another collapse in soy prices, and another Argentine sovereign default. Or at least that’s what the 1-year CDS is pricing in, currently trading at 4,615 basis points. That’s no joke – it now costs US$461,500 to insure US$1mn against an Argentine [Read more...]

Question: Which country would you feel safer investing in, South Korea or Pakistan? Most people would probably say Korea, but judging by the performance of their currencies this year, the answer is not so clear cut. Every night lately, just before drifting off to sleep, I’ve found myself wondering where the Korean won would be [Read more...]

I am hard-pushed to think of many countries (except for extreme places like Zimbabwe, North Korea, the USA et al) that are facing such tremendous difficulties as Pakistan right now. As far as I can see, Pakistan seems to be on the brink of a debt crisis, and will have to secure foreign financing if [Read more...]

It’s been a long time coming. After several false dawns, Argentina’s authorities have finally announced their intention to reopen the 2005 offer for holdouts who chose not to participate in the country’s bond restructuring deal. At this stage, it is difficult to distinguish fact from fiction, but according to local media, three banks (thought to [Read more...]