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Bloomberg
9 hours ago
- Business
- Bloomberg
Recovery From Distressed Debt Swaps Beats Bankruptcy, Fitch Says
Distressed debt exchanges have been delivering better average outcomes for lenders compared to bankruptcies, according to a Fitch Ratings report. Such swaps have yielded an average recoveries of between 77.8% and 92.8%, according to Fitch, which analyzed transactions from 2024 through the first quarter.
Gulf Insider
06-07-2025
- Business
- Gulf Insider
'There Is No Fix' For The U.S. Debt, Says Ex-Coinbase CTO Balaji Srinivasan — And It's Starting To Show
On the surface, America's official debt stands at around $36.2 trillion, according to the U.S. Treasury's latest June 2025 update. But former CTO of Coinbase Balaji Srinivasan believes that is just the beginning. In a post on X dated Jul. 1, he pointed to a far larger number, $175 trillion, arguing that when future promises like Social Security, Medicare, and public pensions are included, the country's true financial obligations are much higher than the headline figures suggest. The US is real debt is $175T+.And @elonmusk is 100% correct on the the difficult step is the logical is no fix. It's a writeoff. A national the default will be in the form of money printing. — Balaji (@balajis) July 1, 2025 The long-term view is based on estimates from the 2024 Financial Report of the U.S., which values the present cost of these commitments, minus expected future taxes, at $175.3 trillion. The data comes from government bodies such as the Social Security Administration and the Centers for Medicare and Medicaid Services, and spans what economists refer to as an infinite horizon. These unfunded liabilities, though not listed on the immediate balance sheet, are legally binding obligations. Often referred to as off-balance-sheet debt, they represent real commitments that do not appear in the official national debt but still require eventual payment. Balaji indirectly supported Elon Musk's recent criticisms of Trump's 'Big Beautiful Bill', which would extend the 2017 tax cuts, waive taxes on tips and overtime, and increase infrastructure spending. Musk's concerns, shared during Tesla's earnings call in mid-June, prompted a sharp response from Trump, exposing growing friction between fiscal conservatives and political leadership. The Congressional Budget Office estimates that this proposal could add another $3.8 trillion to the federal debt over the next decade. Rather than being a short-term budget issue, the challenge reflects a deeper structural imbalance. It raises the question of whether the current system can realistically support the scale of its obligations. As Srinivasan puts it, 'There is no fix. It is a write-off. A national bankruptcy.' The default, he argues, will come through money printing, though doing so would impose a heavy cost on the U.S. If money printing is the only path forward, the market may already be responding. The U.S. dollar's decline in 2025 has become one of the sharpest in modern history. The U.S. Dollar Index fell 10.8% in the first half of the year, marking its worst first-half performance since the collapse of the Bretton Woods system in 1973. It also represents the weakest six-month stretch for the dollar since 2009. The Bloomberg Dollar Spot Index has now recorded six consecutive monthly declines, equaling its longest losing streak in eight years. This has been one of the worst years in history for the US Dollar:The US Dollar index fell -10.8% in the first half of 2025, its worst first-half performance since the end of the gold-backed Bretton Woods System in also marks the weakest performance for any… — The Kobeissi Letter (@KobeissiLetter) July 1, 2025 Against major currencies, the dollar has dropped 14.4% against the Swiss franc, 13.4% against the euro, 10.5% against the Japanese yen, and 9.6% against the British pound. Explanations for the slide often center on recent policy shifts. Tariffs introduced in January 2025 have disrupted trade flows, and the Federal Reserve has signaled a potential rate cut cycle to support a slowing economy. Comments from the Fed's Jun. 18 meeting minutes have added to near-term volatility while also revealing how these short-term policies interact with deeper structural imbalances that are harder to unwind. Debt levels continue to weigh on the outlook. The U.S. national debt, which stood at 98.2% of GDP in 2020, is now projected to surpass 100% by the end of 2025, based on updated figures from the Kobeissi Letter. The broader pressure is reflected globally. The IMF's latest reserve data shows the dollar's share of global foreign exchange reserves declined from 58.4% in 2023 to 57.4% by Q4 2024. In 2014, the share was close to 66%. Foreign exchange reserves chart (2014-2024) | Source: Wikipedia At the same time, central banks around the world have raised their holdings of gold and euros in Q2 2025. Eroding confidence continues to expose the dollar to pressure from both market sentiment and underlying macroeconomic dynamics. As the value of the dollar continues to decline and federal debt obligations expand, the structure of the economy is becoming more sensitive to external shocks and less responsive to policy interventions. Inflation is likely to persist beneath the surface due to structural cost pressures. In 2024, the U.S. imported goods worth over $3.3 trillion, and the total trade deficit for goods and services reached a record $1.2 trillion. A weaker dollar increases the cost of these imports, particularly in areas like energy, electronics, and industrial equipment. Cost pressures from imports tend to pass through slowly across supply chains, creating persistent upward pressure on core inflation even when headline prices appear relatively stable. On the fiscal side, interest payments are starting to take up a larger share of the federal budget. Net interest is projected to reach around $952 billion in 2025, which would amount to more than 18% of total federal revenue and nearly 3.2% of GDP — the highest level since the early 1990s. Projections from the Congressional Budget Office suggest that interest costs could exceed $1 trillion annually by 2026. Growing debt service requirements reduce the fiscal space available for other priorities such as infrastructure, healthcare, or longer-term investment. Growth expectations are also softening. The Federal Reserve Bank of Philadelphia's Q2 2025 survey anticipates real GDP growth at 1.4%, a downgrade from earlier forecasts. At the same time, investment activity is losing momentum. Private domestic investment has been impacted by global supply disruptions and elevated borrowing costs, while tariff-related distortions have raised the price of imported components. The Fed's ability to maneuver is becoming more limited. Lowering rates to stimulate growth would weaken the dollar further and raise import prices. Holding rates steady or tightening to defend the currency would drive up borrowing costs and potentially slow the economy even more. Both directions carry trade-offs that are more binding than in previous cycles. What emerges is a policy environment where inflation may remain sticky, economic growth may continue to ease, and the government's financial flexibility may narrow further. Without structural adjustments, the current path points toward an extended period of reduced policy effectiveness and intensifying systemic strain. Bitcoin btc-0.03% Bitcoin, gold, and other hedges are gaining importance as structural alternatives in a system visibly under fiscal and monetary strain. In less than a year since approval, spot Bitcoin ETFs in the U.S. have attracted over $135 billion in assets. The iShares Bitcoin Trust accounts for more than half of that total. Participation is no longer limited to crypto-native firms. Capital is now coming from pension funds, family offices, and institutional allocators seeking exposure to a supply-capped, independent asset. The total crypto market cap crossed $3.5 trillion in the second quarter of 2025. Bitcoin accounts for close to 60% of that value and reached a peak of $111,970 in May. Volatility has declined over the past three years, improving Bitcoin's risk profile compared to earlier cycles. Weaker correlations to equities and fixed income have made Bitcoin more attractive in multi-asset portfolios, especially during periods marked by rate uncertainty and dollar weakness. Gold remains a key beneficiary of the current transition. Central banks purchased more than 1,000 tonnes in 2024 and are expected to add around 900 tonnes more in 2025. A recent World Gold Council survey found that 76% of central banks plan to raise their gold allocations over the next five years. Market forecasts continue to point to deeper integration of these assets into global portfolios. Long-term projections estimate that Bitcoin's market cap could approach $5 trillion, representing a small but meaningful share of global wealth allocation. Gold, while more established, continues to benefit from steady central bank demand and interest from investors looking to preserve purchasing power amid ongoing currency depreciation. As debt levels rise and the dollar's global role faces greater scrutiny, demand for these assets is likely to keep expanding unless there is a credible reversal in the fiscal and monetary policies that underpin current pressures.
Yahoo
20-06-2025
- Business
- Yahoo
An inflation surge could swamp Trump's presidency. This one investment will keep your money safe.
America's financial outlook has darkened under President Donald Trump's leadership. All three major credit-rating agencies now rank U.S. federal debt one notch below triple-A, and Jamie Dimon, the chairman and CEO of JPMorgan Chase JPM, has warned of a crack in the U.S. bond market. With the 10-year U.S. Treasury yield BX:TMUBMUSD10Y at 4.4% on Wednesday and the 30-year rate BX:TMUBMUSD30Y at 4.9%, holders of nominal U.S. debt should be prepared for significant real losses. The principal risk is not U.S. sovereign default, but rather unexpected increases in medium- and long-term interest rates, owing to market expectations of higher inflation. Fiscal policy under Trump is unsustainable, as it was under former President Joe Biden — but even more so if the Trump administration's 'big, beautiful' budget passes in anything like its current form. 'I'm at my wit's end': My niece paid off her husband's credit card but fell behind on her taxes. How can I help her? Why the biggest-ever 'triple witching' options expiration could deliver a jolt to Friday's trading Israel-Iran clash delivers a fresh shock to investors. History suggests this is the move to make. 'I prepaid our mom's rent for a year': My sister is a millionaire and never helps our mother. How do I cut her out of her will? I'm 75 and have a reverse mortgage. Should I pay it off with my $200K savings — and live off Social Security instead? The January 2025 Financial Report of the United States Government makes this clear. The U.S. ratio of federal debt held by the public to GDP at the end of the 2024 fiscal year was around 98%, although $4.7 trillion of the $28.3 trillion in federal debt was held by the Federal Reserve — meaning it is erroneously categorized as held by the 'public,' when really the central bank's accounts should be consolidated with those of the federal government. Under current policy and based on the report's assumptions, federal debt held by the public would reach 535% of GDP by 2099. Stabilizing the U.S. debt-to-GDP ratio requires that the annual primary federal deficit (excluding interest payments) fall by an average of 4.3% of GDP over the next 75 years. And yet, the federal deficit and primary deficit were 6.4% and 3.3% of GDP, respectively, in fiscal-year 2024 — far above what can be justified with the economy near full employment. Read: America's debt is at a breaking point — Trump's tax bill might just push it over the edge With the U.S. Congress so dysfunctional, no one has any faith that it will deliver the required deficit reduction. Democrats do not do permanent spending cuts, and Republicans do not do permanent tax increases. The federal government does own about 28% of U.S. land (roughly 640 million acres), as well as other real commercial assets that could yield significant additional nontax revenues if properly managed. But neither party — nor even the misnamed Department of Government Efficiency — appears to have considered this option, so the federal deficit as a share of GDP is likely to rise over the next few years. With no foreseeable improvement in fiscal policy, there are two possible outcomes. First, the U.S. government could default. There has long been a small, but recurrent, risk of a technical, short-lived default if Congress fails to raise, suspend, extend, revise or abolish the federal debt ceiling on time. Fortunately, it has averted this scenario 78 times since 1960, and we expect it to continue doing so. As matters stand, the debt ceiling (including debt held by federal agencies) is set at $36.1 trillion, and debt subject to the limit is also $36.1 trillion. If needed, the Treasury has a highly liquid asset (the Treasury General Account held with the Fed) worth $332.9 billion that it can use to meet its obligations, and it may temporarily use 'extraordinary measures to continue to borrow additional amounts for a limited time.' The second, more likely possibility is that the Fed will monetize enough federal debt to prevent default. Since U.S. federal debt is serviced in dollars, 'printing money' is always an option. But, as the Fed well knows, a large-scale monetization of federal debt would result in significantly above-target inflation. We believe the Fed will do this without its operational independence being revoked by Trump. To get the Federal Open Market Committee to do something it does not want to do, the president would need to control the majority of its 12 voting members. These include the seven members of the Federal Reserve Board of Governors and five (out of 12) regional Federal Reserve Bank presidents who vote at any given FOMC meeting. Neither the president nor Congress can appoint or fire Federal Reserve Bank presidents. The Board of Governors must approve them, and only the board can remove them. The president nominates board members, but the Senate must confirm them. Board members' current term limits imply that, assuming none are fired, Trump will have the opportunity to nominate only two new members. True, with the power to fire board members 'for cause' — meaning 'inefficiency, neglect of duty, or malfeasance' — Trump could try to replace a majority of the members with loyalists. But this seems unlikely. Whether the 'for cause' criterion has been met will be contested in the courts, and the Senate would have to confirm Trump's appointees. Read: Trump's pick to replace Fed Chair Powell could rock your mortgage and retirement. Buckle up. Similarly, Congress could revise the Federal Reserve Act to replace the Fed's monetary-policy objectives with a mandate to buy or sell sovereign debt according to the wishes of the Treasury. But this, too, is unlikely. And the same goes for a scenario in which the Treasury sets a rapidly depreciating exchange-rate target for the dollar DXY that can be achieved only through large-scale Fed purchases of U.S. public debt that generate high inflation. However, fiscal dominance — indeed, fiscal capture — is very likely, because the need to avoid a domestic and global financial crisis will force the FOMC's hand. It will do whatever is necessary to prevent a U.S. government default, because the Fed's financial-stability mandate (the Financial Stability Act of 2010 mentions the Fed 179 times) undoubtedly trumps its monetary-policy mandate of maintaining maximum employment, stable prices and moderate long-term interest rates. The Fed cannot credibly threaten to refuse to monetize debt and deficits to compel fiscal retrenchment by the Treasury, let alone Congress. Thus, the Fed will have no choice but to engage in sovereign-debt purchases that it knows to be incompatible with its monetary-policy objectives. With nominal interest rates for medium- and long-term U.S. sovereign debt far below the levels consistent with realistic expectations of future inflation, serious capital losses on nominal debt instruments (public and private) are likely. The inflation surge could be no more than three years away. As the prospect of fiscal capture comes into view, investing in Treasury inflation-protected securities (TIPS) and other indexed public and private debt instruments will become increasingly attractive. Willem H. Buiter, a former chief economist at Citibank and former member of the Monetary Policy Committee of the Bank of England, is an independent economic adviser. Anne C. Sibert is professor emerita of economics at Birkbeck, University of London. This commentary — 'U.S. Debt Holders Should Brace for Impact' — is published with the permission of Project Syndicate. Read: 'You are going to panic,' Jamie Dimon tells regulators about what will happen when the bond market cracks More: What's at stake if world's most powerful market finally buckles after decades-long U.S. debt splurge 20 companies in the S&P 500 whose investors have gained the greatest rewards from stock buybacks Israel-Iran conflict poses three challenges for stocks that could slam market by up to 20%, warns RBC I'm 51, earn $129K and have $165K in my 401(k). Can I afford to retire when my husband, 59, draws Social Security at 62? 'It might be another Apple or Microsoft': My wife invested $100K in one stock and it exploded 1,500%. Do we sell? Why the stock market will be performing a high-wire act over the summer, according to UBS
Yahoo
18-06-2025
- Automotive
- Yahoo
Invitation to Autoliv's Q2, 2025 Earnings Call
STOCKHOLM, June 18, 2025 /PRNewswire/ -- Autoliv Inc., plans to publish its Financial Report for the second quarter 2025 on Friday, July 18, 2025 at 12:00 Central European Time (CET). The report will be available at In addition, a teleconference will take place the same day. Q2 2025 Earnings Call: Date: July 18, 2025 Time: 14:00 - 15:00 CET Main speaker: Mikael Bratt, President & CEO To attend by webcast, please use the link on our web or the link below: To attend by phone, use the link below to register your participation and obtain your personal pin code and phone number: Audio replay will be available after the conference until July 18, 2026: Transcript will be available on: For more information about Autoliv, please visit Best regards,Anders TrappV.P. Investor RelationsEmail: +46 709578171 This information was brought to you by Cision The following files are available for download: Invitation ALV Q2 25 Webcast Telco July 2025 View original content: Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
18-06-2025
- Automotive
- Yahoo
Invitation to Autoliv's Q2, 2025 Earnings Call
STOCKHOLM, June 18, 2025 /PRNewswire/ -- Autoliv Inc., plans to publish its Financial Report for the second quarter 2025 on Friday, July 18, 2025 at 12:00 Central European Time (CET). The report will be available at In addition, a teleconference will take place the same day. Q2 2025 Earnings Call: Date: July 18, 2025 Time: 14:00 - 15:00 CET Main speaker: Mikael Bratt, President & CEO To attend by webcast, please use the link on our web or the link below: To attend by phone, use the link below to register your participation and obtain your personal pin code and phone number: Audio replay will be available after the conference until July 18, 2026: Transcript will be available on: For more information about Autoliv, please visit Best regards,Anders TrappV.P. Investor RelationsEmail: +46 709578171 This information was brought to you by Cision The following files are available for download: Invitation ALV Q2 25 Webcast Telco July 2025 View original content: SOURCE Autoliv Sign in to access your portfolio
