As we continue to cover the pension crisis that is unfolding in the United States (recently here and here), it is important to remember that these problems are not unique to just the U.S.
Malaysian CDS rose to near 3-month highs and the Ringgit has spiked over 300 pips - back near recent lows - after the Malaysian slushfund government investment fund 1MDB is reportedly in default. This is exactly the scenario we laid out last week that initially sent the currency lower and CDS higher, as the Abu Dhabi sovereign wealth fund has by all appearances started a potential waterfall default on Malaysian sovereign debt (due to cross-default triggers at the sovereign).
Submitted by Michael Snyder via The Economic Collapse blog,
Regular readers know that we've covered Alberta's decline at length (refresher here), so there is no need to give much of a backstory other than to say that the situation seems to get worse for the Canadian province as each day passes even as oil has rebounded in the past two months.
As out friends from Fasanara Capital remind us, despite record liquidity injections by the PBOC in the past few days, Chinese repo rates have resumed continue breaking higher.
The move is odd, given ongoing record liquidity injections (RMB 680 bn last week, RMB 150 bn today).
As Fasanara's Francesco Filia writes, "the mind inevitably goes to excess credit troubles in China and potential for CNH selling-off" and adds that the "move directly affects leveraged positions on bonds, funded by short-term repos."