SUNDAY MARKETS: Russian SWIFT Ban Means Monday Chaos
Swift is a monetary supply chain, Think 2020 with a Lehman twist
Housekeeping:
We were going to hold off on this report.. but early indications are right now a Russian Bank is trying to buy dollars with Rubles at over 2x the cost from Friday
Here is the Ruble monthly chart on Friday.. itdepicts the ruble being worh 1/80th a dollar. PRETTY SCARY RIGHT?
Look at it now if the info we just saw is correct. same chart scaled to fit.
It means that the ruble just got its value in dollar terms cut in half by the event. It not only means they will ahve no way t omake payments wihtout using someone elses money, but they have no way to get that money unless they sell dollar based assets.. like GOLD, and OIL.
On the flipside- anyone in the world holding Russian investments will be in trouble.. Read this report just published by one of the top economists on wall street for more clarity
CS Economics Global Money Dispatch
I’ll never forget the late-night briefing on Friday before Lehman’s bankruptcy where according to one line of argument Lehman’s problems were so widely understood that the system had enough time to hedge itself so that the actual default would be manageable. It didn’t turn out like that…
Swift is a Monetary Supply Chain
If a bank closes a $200 billion balance sheet on Friday and doesn’t open on Monday, someone’s $200 billion wasn’t hedged by definition.
The same with exclusions from SWIFT – the payments messaging system banks use to send and receive payments. Exclusions from SWIFT will lead to missed payments and giant overdrafts