Banks are making big money off of Russian debt

[Donkees]

By Nicole Goodkind, CNN Busin
April 9, 2022

Excerpts:

New York (CNN Business) US banks have left Russia, but that doesn't mean they're done making money off the Kremlin's horrific invasion of Ukraine.

The sell-off of Russian debt associated with Russian President Vladimir Putin's campaign on Ukraine and the sanctions that have ensued have created a window for a new type of arbitrage that some in the finance world are gobbling up, seeing it as easy money.

It also illustrates an alarming disconnect between Wall Street and the actual state of the global economy: Typically, investors would base their valuation of Russian debt on whether or not it will be repaid, and the likelihood that it would be repaid would depend on the strength and durability of the Russian economy, but that's not happening. New sanctions by the US Treasury on Tuesday, which blocked Russian access to any dollars they held in American banks, significantly increased the chances that Russia would default on its debt and that its gross domestic product, the main measure of a country's economic strength, would tumble...If Wall Street were associated with the real world it wouldn't want to be anywhere near Russian debt.

"Russian debt is the province of high risk takers," said Nichols, "and institutions should probably stay away."

https://www.cnn.com/2022/04/09/investing/russia-debt-wall-street-billions/index.html

[lastlib]

1. As long as it exists, there is money to be made with it.....

short-selling, arbitrage, swaps.... The markets have all kinds of tools to turn profits even on these dogs.