11 Countries Near Bankruptcy

Discussion in 'Pakistan' started by Blackwater, Aug 8, 2014.

  1. Blackwater

    Blackwater Veteran Member Veteran Member

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    After years of bitter court battles with creditors, Argentina has defaulted on its debt, according to rating agency Standard & Poor’s. After failing to come to an agreement with creditors from its previous default in 2001, the country missed necessary bond payments on July 31, triggering the default announcement. As of publication, other organizations, most notably the rating agency Moody’s Investors Service and the International Swaps and Derivatives Association, a derivatives trade group, have yet to release public statements confirming the default.


    Argentina is not the only country that has struggled, or even failed, to pay its debt in recent years. It is hardly the only country with a severely impaired credit rating either. Alongside Argentina, Moody’s currently lists 10 other countries with a rating of Caa1 or worse. A Caa1 rating is several notches below Ba1, which still carries substantial credit risk. Based on ratings from Moody’s Investors Service, these are the 11 countries at risk of default.

    Click here to see the countries most likely to default

    The countries with the lowest credit ratings significantly differ from one another. They span the globe, ranging from Greece and Ukraine in Europe, to Pakistan in Asia,:taunt::taunt::taunt::taunt: to Ecuador, Venezuela, and Belize in South America.

    These nations also suffer from vastly different problems. Some nations, such as Ukraine and Egypt, owe their recent downgrades to political conditions. Others, such as Belize and Ecuador, have actually been upgraded in recent years based on their improved financial positions.

    When a government has a great deal of debt relative to the size of its economy, its credit rating may also be lower. Three of the nations potentially at risk of default had among the world’s highest debt levels, at 120% of GDP or more based on 2014 estimates. According to the International Monetary Fund (IMF), Greece’s debt is projected to hit nearly 175% of GDP by the end of this year, more than that of any other nation in the world except for Japan.

    However, not all countries with low ratings necessarily have a large amount of outstanding government debt. For example, Ecuador’s government debt, according to the IMF, was forecast to total just 24.8% of GDP in 2014 — an exceptionally low amount. In many cases, these countries simply do not regularly access international bond markets, either because of small financial sectors or because of debt-restructuring agreements.

    Borrowing funds in the international bond market can be quite expensive for countries with poor credit ratings. Countries have to pay high interest rates on their debt because because investors require greater returns on what they perceive to be riskier investments. For example, a 10-year U.S. Treasury Note pays an annual coupon of just 2.5%. By contrast, a comparable bond recently issued by Jamaica pays out 7.65% a year. In Greece, yields on 10-year government bonds reached 29% in early 2012, right before the country defaulted.

    Often, countries that tap into international bond markets do so in other currencies. For example, nations such as Argentina, Jamaica, Belize, and Ukraine have all issued bonds in other nations’ currencies. The main reason to use common currencies — such as the dollar, yen, and euro — is that their inflation rates are typically far lower than the currencies of the issuing countries. This means that investors do not need to worry as much about their investment losing value.

    In fact, inflation is a major problem in several of the countries with the worst credit ratings. In one such nation, Venezuela, inflation is expected to exceed 50% in 2014, according to the IMF. Argentina’s inflation rates are likely much higher than reported by government statistics on consumer prices, which were long considered highly unreliable.

    Based on credit ratings provided by Moody’s Investors Service, 24/7 Wall St. reviewed the 11 countries with credit ratings of Caa1 or worse. A rating of this level indicates considerable credit risk. Because many of these nations have significant debt in other currencies or have otherwise weak currencies, we used foreign currency ratings and outlooks for these nations. Figures on GDP growth, inflation, unemployment, population and debt levels are estimates for 2014 from the IMF’s World Economic Outlook.

    These are the 11 countries at risk of default.



    Read more: 11 Countries Near Bankruptcy - 24/7 Wall St. 11 Countries Near Bankruptcy - 24/7 Wall St.
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  3. Blackwater

    Blackwater Veteran Member Veteran Member

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  4. HMS Astute

    HMS Astute Regular Member

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    [​IMG]
     
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  5. Meriv90

    Meriv90 Regular Member

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  6. HMS Astute

    HMS Astute Regular Member

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  7. Meriv90

    Meriv90 Regular Member

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    No problem if you are speaking about Public debt, we got worse rating by far, but that stands only for our 134%(2014 data meanwhile ranking is 2012) and your 76%, at the end we have 314, 200% less than you,

    United Kingdom | Which Advanced Economy Has the Most Debt? | TIME.com
    ------------------------------------
    Italy

    Total Debt as a percentage of GDP: 314%

    Household: 45%

    Nonfinancial Corporations: 82%

    Financial Institutions: 76%

    Government: 111%

    ---------------------------
    UK

    Total Debt as a percentage of GDP: 507%

    Household: 98%

    Nonfinancial Corporations: 109%

    Financial Institutions: 219%

    Government: 81%

    --------------------------------
    Now imagine a bankruptcy of both systems, what happens?

    OK italian government goes KO but Companies,civil society and Households survive the crisis, in your case it is the exactly contrary.

    EDIT: From bussinesweek september 2013 Europe's Countries Ranked by Debt Per Capita - Businessweek

    Aug. 13, 2012: Bank of England Governor Mervyn King sees “no obvious end in sight” to the euro crisis

    The financial crisis in Europe resulted in huge expansions in government spending. Here’s a ranking of countries based on gross external debt per capita, including both government and private debt.

    [​IMG]
     
    Last edited: Aug 9, 2014
  8. HMS Astute

    HMS Astute Regular Member

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    Really had to scroll all the way down to find Italy! LOL. let alone it's soaring unemployment rate, poverty, and low gdp per capita. i can understand why a lot of young italian students and professionals are flocking to the UK everyday in order to seek a better life. the grass must be a lot more greener on the other side.

    [​IMG]
    [​IMG]
    [​IMG]
     
  9. Meriv90

    Meriv90 Regular Member

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    That ranking is only on your public debt, why don't you search for the other 430% percent rating (you won't find it, there isn't, at max you can find the amount of Non performing loans and hard to value assets). Meanwhile i ill keep my 39k debts vs your 149k. Please enjoy your 110k debt more.
     
  10. HMS Astute

    HMS Astute Regular Member

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    don't worry.

    i will enjoy my much higher FDI, HDI, highest advanced economy GDP growth in the world, GDP per capita, better education, welfare, infrastructure, hospital and lower unemployment rate. let me know if you need any bailout.
     
  11. Meriv90

    Meriv90 Regular Member

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    Wrong, from your compatriots (The economist, good enough?)
    International: The lottery of life | The Economist
    [​IMG]
     
  12. HMS Astute

    HMS Astute Regular Member

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    Debt per capita.
    [​IMG]


    Net government debt.
    [​IMG]


    Debt by % of gdp.
    [​IMG]


    Foreign Direct Investment.
    [​IMG]


    Biggest exporters in the world.
    [​IMG]





     
    Last edited: Aug 9, 2014
  13. Meriv90

    Meriv90 Regular Member

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    OK i stop here, from one side you have The economist, Business week and Time, on the other wikipedia copy paste, i'm sorry i started this, next time i will look for a better interlocutor.
     
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  14. HMS Astute

    HMS Astute Regular Member

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    shouldn't have criticised other country's economy since at the first place and especially if you're an italian lol. its just amusing and it's more like an April Fool's day.

    i have nothing against Italy, which is one of PIGS countries that stay on bailouts and handouts, which is one of my favourite holiday destinations and that's it.

    lots of young italian students, workers and professionals are flocking to UK lately, and i think this is fantastic.

    all sources are published by IMF, World Bank and the last one is Forbes.
     
    Last edited: Aug 9, 2014
  15. HMS Astute

    HMS Astute Regular Member

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    Last edited: Aug 9, 2014

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