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Remember the wave of bankruptcies that hit shale E&Ps and oilfield services providers in the shale patch between 2015 and 2017? Over those two years, more than 120 oil and gas producers filed for bankruptcy protection in the United States, figures from Haynes & Boone showed last year.

Since then, it seems that life has not been much different for many of these post-bankruptcy survivors.

Bloomberg’s Alex Nissbaum, in a recent story on the fate of those less fortunate drillers, noted SandRidge Energy as “the poster boy” for post-bankruptcy oil and gas companies that are still struggling to get back on their feet but may never succeed.

SandRidge exited bankruptcy last year but has found it difficult to return to growth mode for a number of reasons that are indicative of the challenges that remain in the U.S. shale oil and gas industry.

The most obvious one is that not all shale is created equal, whatever the industry tells us about lowering production costs and improving operational efficiencies.

Let’s forget this mantra for a moment. Everyone wants in on the Permian boom but not everybody wants in on certain parts of Oklahoma, for instance.

As one analyst told Nissbaum about the post-bankruptcy survivors, “The bottom line is a lot of these companies didn’t have very good assets to begin with. You can go through bankruptcy and wipe away debt and that’s all well and good, but the assets they ended up with are still not very attractive.”

…click on the above link to read the rest of the article…

Four Charts: Debt, Defaults and Bankruptcies To See Higher Gold

March 20, 2018

Four Charts: Debt, Defaults and Bankruptcies To See Higher Gold

20, March

– $8.8B Sprott Inc. sees higher gold on massive consumer debt, defaults & bankruptcies
– Rising and record U.S. debt load may cause financial stress, weaken dollar and see gold go higher
– Massive government and consumer debt eroding benefits of wage growth (see chart)

by Bloomberg

Rising U.S. interest rates, usually bad news for gold, are instead feeding signs of financial stress among debt-laden consumers and helping drive demand for the metal as a haven.

That’s the argument of Sprott Inc., a precious-metals-focused fund manager that oversees $8.8 billion in assets. The following four charts lay out the case for why gold could be poised to rise even as the Federal Reserve tightens monetary policy.

Gold futures have managed to hold on to gains this year, staying above $1,300 an ounce even as the Fed raised borrowing costs in December for a fifth time since 2015 and is expected to do so again next week.

The increases followed years of rates near zero that began in 2008. Low rates coupled with the Fed’s bond-buying spree contributed to the precious metal’s advance to a record in 2011. Higher rates typically hurt the appeal of gold because it doesn’t pay interest.

Paper Losses

The U.S. posted a $215 billion budget deficit in February, the biggest in six years, as revenue declined, Treasury Department data show. That’s boosting the government debt load, fueling forecasts for higher yields and raising the specter of paper losses for international investors who own $6.3 trillion of U.S. debt.

Slowing demand for Treasuries from overseas buyers is contributing to dollar weakness against the currency’s major peers, helping support gold prices, according to Trey Reik, a senior portfolio manager at Sprott’s U.S. unit.

Debt-Laden Shoppers

The yield on the 10-year U.S. Treasury, which has been in decline for more than three decades, has risen over 40 basis points this year as the Fed raised rates and U.S. debt ballooned to more than $20 trillion.

…click on the above link to read the rest of the article…

It’s Just Starting: Moody’s Warns A Deluge Of Retail Bankruptcies Is Coming

March 15, 2018

It’s Just Starting: Moody’s Warns A Deluge Of Retail Bankruptcies Is Coming

2017 was a perfect storm for “brick and mortar” retailers who officially lost the war with Amazon, and no less than 30 retail chains filed for bankruptcy in a year in which the CEO of Urban Outfitters said the “retail bubble has now burst“…

… bringing the total number of Chapter 11 cases since mid-2015 to 50, accounting for over $20 billion in liabilities.

So is the worst over for retail, or is the sector just now approaching the eye of the hurricane?

According to the latest Moody’s research report on the retail sector, the rating agency now forecasts at least six retail & apparel issuers defaulting over the next 12 months, with most of these occurring in the first half of the year.

While the good news is that the industry default rate is expected to peak at 12.43% this March, Moody’s cautions that the still-high default forecast for the remainder of 2018 points to more pain before this lower ratings rung in retail stabilizes. Recent defaulters include Tops Markets, which filed for Chapter 11 on February 21, which followed Bon-Ton’s filing on February 4. Charlotte Russe and Charming Charlie both defaulted in December, and Claire’s has hired restructuring advisors.

Meanwhile, the Toys “R” Us bankruptcy in September its overnight Chapter 7 liquidation has only added to pressures by accentuating potential pressures between vendors and the more stressed retailers, even as it left some 33,000 employees without a job.

The problem is that it only gets worse from there, and the rating agency expects upcoming maturities for distressed issuers will spike in 2019. Defaults are growing as many struggle with high leverage and challenged operating performance. These challenges are compounded by the biggest risk – mounting maturities – which spike in 2019. Overall, issuers in the Caa1 and lower group face $14.9 billion in public and private maturities due 2018 through 2020 as shown in Exhibit 1. The lion’s share of these maturities (Exhibit 2) is attributable to just five issuers:

Sears Holdings Corp. (Ca negative),
Neiman Marcus Group LTD LLC (Caa2 negative)
Claire’s Stores, Inc. (Ca negative),
BI-LO Holding Finance (Caa1)
Guitar Center Inc. (Caa1 negative).

…click on the above link to read the rest of the article…

On borrowed time: America’s companies have binged on debt; a reckoning looms

March 13, 2018

On borrowed time: America’s companies have binged on debt; a reckoning looms

The total debt of American non-financial corporations as a percentage of GDP has reached a record high of 73.3%

AMERICA’s companies have been powering ahead for years. Amid growing profits, the recession that began in 2007 seems an increasingly distant memory. Yet the situation has a dark side: companies have binged on debt. For now, as the good times have coincided with a period of record-low interest rates, markets have been untroubled. But a shock could put corporate America into trouble.

No matter how it is measured, the debt load looks worrying. When calculated as a percentage of GDP, the total debt of America’s non-financial corporations reached 73.3% in the second quarter of 2017 (the latest available data). This is a record high. Measured against earnings before interest, tax, depreciation and amortisation (EBITDA), the net debt of non-financial companies in the S&P500 hit a ratio of 1.5 at of the end of 2016, a level not seen since 2003. And it remained nearly as high in 2017 (see chart).

To be sure, things are less worrying than they were before the financial crisis. According to a recent analysis by S&P Global Ratings, a ratings agency, for example, debt is now more evenly distributed. Only 27% of American firms in 2017 were highly levered (defined as a debt-to-earnings ratio higher than five), down from 42% of firms in 2007, meaning that fewer firms are immediately at risk.

The use of the extra debt was also somewhat different. Bob Michele of J.P. Morgan reckons that in recent years much of it was used by companies to finance share buy-backs, essentially for purposes of balance-sheet management (rather than, say, big expansions or acquisitions).

Even so, certain industries look particularly vulnerable under their debt loads. David Tesher of S&P Global Ratings says that retail is the sector in America most at risk. Such companies accumulated high levels of debt after more than a decade of private-equity-sponsored activity. They must also cope with tough competition from e-commerce. Around 50 American retailers filed for bankruptcy in 2017 alone, many due to the debt piled on by their private-equity owners. The most prominent example is Toys R Us, which was acquired by a consortium of private-equity firms in 2005. In the case of Payless ShoeSource, a retailer that also went bankrupt last year, creditors argued in court filings that its private-equity owners should share the blame for its collapse; after much argument, the owners agreed to put more than $20m back into the company.

…click on the above link to read the rest of the article…

Thousands More Stores Are on the 2018 Retail Apocalypse DEATH LIST: Are your local stores on the list?

March 4, 2018

Thousands More Stores Are on the 2018 Retail Apocalypse DEATH LIST: Are your local stores on the list?

Every year, it seems like more and more retail outlets are going out of business, resulting in the loss of jobs and local supplies. Last year, hundreds of stores closed, and this year, even more shops are scheduled to shut their doors for good.

The 2018 Death List

This year, in an effort to save their businesses, the following retailers will close hundreds of their stores, according to Fox Business.

Abercrombie & Fitch: 60 more stores are charted to close
Aerosoles: Only 4 of their 88 stores are definitely remaining open
American Apparel: They’ve filed for bankruptcy and all their stores have closed (or will soon)
BCBG: 118 stores have closed
Bebe: Bebe is history and all 168 stores have closed
Bon-Ton: They’ve filed for Chapter 11 and will be closing 48 stores.
The Children’s Place: They plan to close hundreds of stores by 2020 and are going digital.
CVS: They closed 70 stores but thousands still remain viable.
Foot Locker: They’re closing 110 underperforming stores shortly.
Guess: 60 stores will bite the dust this year.
Gymboree: A whopping 350 stores will close their doors for good this year
HHGregg: All 220 stores will be closed this year after the company filed for bankruptcy.
J. Crew: They’ll be closing 50 stores instead of the original 20 they had announced.
J.C. Penney: They’ve closed 138 stores and plan to turn all the remaining ones into toy stores.
The Limited: All 250 retail locations have been closed and they’ve gone digital in an effort to remain in business.
Macy’s: 7 more stores will soon close and more than 5000 employees will be laid off.
Michael Kors: They’ll close 125 stores this year.
Payless: They’ll be closing a whopping 800 stores this year after recently filing for bankruptcy.
Radio Shack: More than 1000 stores have been shut down this year, leaving them with only 70 stores nationwide.
Rue 21: They’ll be closing 400 stores this year.

…click on the above link to read the rest of the article…

Oil Market Fears: War, Default And Nuclear Weapons

March 1, 2018

Oil Market Fears: War, Default And Nuclear Weapons

The U.S. is one of the few areas of the world in which there is an energy investment boom underway, a development that could smooth out the uncertainties of geopolitical events around the world. At the same time, outside of the U.S., there is a deterioration of stability in many oil-producing regions, aggravating risks for both oil companies and the oil market, according to a new report.

Financial risk firm Verisk Maplecroft explores these two trends as they play out simultaneously. The U.S. shale sector has emerged from years of low oil prices, damaged but still intact. Importantly, the shale industry “can ride out price dips and respond quickly to upticks, weakening OPEC in the process,” James Lockhart-Smith, director of financial sector risk at Verisk Maplecroft, wrote in the report. Combined with deregulation at the federal level, the oil industry is in the midst of an investment boom in the U.S.

Meanwhile, things are not so rosy elsewhere. Verisk Maplecroft surveyed a long list of countries, and produced its Government Stability Index (GSI), which uses some predictive data and analysts forecasts to take stock of geopolitical risk in various countries over the next few years.

The results are not encouraging. The number of countries expected to see a deterioration of stability “significantly outnumber those we see becoming more stable,” the firm said. The reasons are multiple, including low oil prices, but also the erosion of democratic institutions. Related: Something Unexpected Just Happened In LNG Markets

“We don’t see increasing instability necessarily ending in coups or significant political upheaval, but a less predictable above-ground-risk environment is likely to emerge,” Verisk Maplecroft’s Lockhart-Smith said. “Arbitrary decision making, possible measures to buy off key stakeholders or an inability to pass regulatory reforms will be the main risks to projects in these countries, as their governments seek to stabilise and maintain their influence.”

…click on the above link to read the rest of the article…

The Coming Banking Crisis & The End of Bailouts

February 22, 2018

The Coming Banking Crisis & The End of Bailouts

Behind the curtain, there is a growing concern about a serious banking crisis beginning once again in Europe. Many governments are talking about the crisis behind-the-curtain and we are now beginning to see steps that are being taken to end the TO-BIG-TO-FAIL policies that dominated the 2007-2009 Crash.

The United States is looking at a new radical bank rescue policy where the government is proposing to revise a central pillar of the idea of bailing out banks creating new financial regulation with a new Chapter 14 bankruptcy procedure. They are looking at eliminating the risk of taxpayers’ costs to bail out banks. They are investigating the means for an orderly resolution so that the taxpayers do not have to bail out the banks. This development is causing some concern among the high-flying Wall Street banks, for if that is the case, then another crisis as 2007-2009 will result in even Goldman Sachs closing. The proposal looks to shift the burden to the shareholders and creditors of that bank. This means depositors who are thus creditors.

In Australia, we see similar legislation being proposed. This is the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Bill 2017. This also authorizes bail-ins bringing an end to the bailout.

On Closer Inspection, Debt of Bankrupt Spanish Construction Firm Grows Four-Fold

February 18, 2018

On Closer Inspection, Debt of Bankrupt Spanish Construction Firm Grows Four-Fold

What happens if cases like this prove to be the rule rather than the exception?

Spain appears to have a brand-new Abengoa — the imploded energy giant whose fabulous accounting tricks pushed creditors into a black hole — on its hands: Isolux was until recently a fairly large privately owned infrastructure company with operations spanning the globe.

When the group declared bankruptcy last July, its cash flow in Spain was barely enough to cover a month’s operating costs. The group had a a total workforce of 3,884 and 119 infrastructure projects under development of which 39 were still operational and the remaining 90 had been halted.

The company tried to reduce its debt addiction through agreements with investment funds but they fell through. It also made two attempts to go public, in Brazil and Spain. Both failed.

The bankruptcy proceedings affected seven subsidiaries. At the time, the company stated that it owed €405 million to suppliers, that its total financial debt — including those companies not included under the Spanish Insolvency Act filing — was €1.3 billion, of which €557 million was associated with project financing, and that the total deficit on the group’s balance sheet was about €800 million.

Turns out, according to the bankruptcy receivers, the shortfall is actually €3.8 billion — four-and-a-half times the company’s original estimate — and the group’s total debt, at €5.7 billion, is over €4 billion more than the amount stated by the company 10 months ago.

This amount does not include the group’s dual or contingent liabilities. The receiver’s report concludes that the current situation will probably culminate in the liquidation of the entire group.

How did all this come to pass? According to the receiver’s report, the collapse of the real estate bubble in Spain and the drastic reduction in public work tenders during the crisis led Isolux to massively expand its international operations, as many large Spanish companies did in the aftermath of the housing bubble collapse.

…click on the above link to read the rest of the article…

War Spending Will Bankrupt America

February 18, 2018

War Spending Will Bankrupt America

“Why throw money at defense when everything is falling down around us? Do we need to spend more money on our military (about $600 billion this year) than the next seven countries combined? Do we need 1.4 million active military personnel and 850,000 reserves when the enemy at the moment — ISIS — numbers in the low tens of thousands? If so, it seems there’s something radically wrong with our strategy. Should 55% of the federal government’s discretionary spending go to the military and only 3% to transportation when the toll in American lives is far greater from failing infrastructure than from terrorism? Does California need nearly as many active military bases (31, according to militarybases.com) as it has UC and state university campuses (33)? And does the state need more active duty military personnel (168,000, according to Governing magazine) than public elementary school teachers (139,000)?”

— Steve Lopez, Los Angeles Times

Mark my words, America’s war spending will bankrupt the nation.

For that matter, America’s war spending has already bankrupted the nation to the tune of more than $20 trillion dollars.

Now the Trump Administration is pushing for a $4.4 trillion budget for fiscal year 2019 that would add $7 trillion to the already unsustainable federal deficit in order to sustain America’s military empire abroad and dramatically expand the police state here at home. Trump also wants American taxpayers to cover the cost of building that infamous border wall.

Truly, Trump may turn out to be, as policy analyst Stan Collender warned, “the biggest deficit- and debt-increasing president of all time.”

For those in need of a quick reminder: “A budget deficit is the difference between what the federal government spends and what it takes in. The national debt, also known as the public debt, is the result of the federal government borrowing money to cover years and years of budget deficits.”

…click on the above link to read the rest of the article…

Drastic Pension Cuts Will Hit California, Kentucky, Other States

January 16, 2018

Drastic Pension Cuts Will Hit California, Kentucky, Other States

The CA Supreme Court will rule on pension cuts. Curiously, the court’s ruling will be irrelevant in case of bankruptcy.

Please consider California’s Brown Raises Prospect Of Pension Cuts In Downturn.

California Governor Jerry Brown said legal rulings may clear the way for making cuts to public pension benefits, which would go against long-standing assumptions and potentially provide financial relief to the state and its local governments.

Brown said he has a “hunch” the courts would “modify” the so-called California rule, which holds that benefits promised to public employees can’t be rolled back. The state’s Supreme Court is set to hear a case in which lower courts ruled that reductions to pensions are permissible if the payments remain “reasonable” for workers.

“There is more flexibility than there is currently assumed by those who discuss the California rule,” Brown said during a briefing on the budget in Sacramento. He said that in the next recession, the governor “will have the option of considering pension cutbacks for the first time.”

That would be a major shift in California, where municipal officials have long believed they couldn’t adjust the benefits even as they struggle to cover the cost. They have raised taxes and dipped into reserves to meet rising contributions. The California Public Employees’ Retirement System, the nation’s largest public pension, has about 68 percent of assets needed to cover its liabilities. For the fiscal year beginning in July, the state’s contribution to Calpers is double what it was in fiscal 2009.

“In the next downturn, when things look pretty dire, that would be one of the items on the chopping block,” Brown said.

Pension Cuts Are Coming

It’s refreshing to hear a politician admit the obvious: Pension cuts are coming.

However, whether or not the cuts are “reasonable” is irrelevant in cases of bankruptcy. Bankruptcy is under federal, not state law.

…click on the above link to read the rest of the article…

The Time Has Come: Venezuela May Be In Default In Under 48 Hours

October 26, 2017

The Time Has Come: Venezuela May Be In Default In Under 48 Hours

This past weekend, Venezuela failed to make $237 million in bond coupon payment, blaming “technical glitches” when in reality it simply did not have the money (or wish to part with it). Adding the $349 million in unpaid bond interest accumulated over the past month as of last Friday, that brings Caracas’ unpaid bills to $586 million this month, just days before the nation must make a critical principal payment. And, as BofA sovereign debt analyst Jane Brauer writes, while the bank’s base case assumption is that Venezuela will make its debt service payments this year, “the probability of a short term default has increased substantially with coupon delays” and it could come as soon as this Friday, when an $842 million PDVSA principal plus interest payment is due, and which unlike typical bond payments does not have a 30 day grace period but instead is followed by a second $1.1 billion PDVSA coupon on Nov 2, also without a 30 day grace period.

As Brauer writes, Venezuela has been in as similar situation of payment uncertainty in the recent past, with bond prices plummeting right before a big payment. For example, just before a big principal payment was due in April 2017 Venezuela received a $1bn loan from Russia just one week before the due date. At that time Ven 27s dropped 16% in a month (from $52 to $45) and recovered completely within a month. Ven 27 has fallen to $35, as Venezuela has demonstrated that it will be a challenge to make all payments on time. The difference between now and April is that coupon payment delays then came after, not before the payment.

Meanwhile, Venezuela has managed to redefine the concept of payment “on time” which now means “by the end of the grace period”

…click on the above link to read the rest of the article…

Hartford Could Default On Its Debt As Soon As Next Month, Moody’s Says

October 19, 2017

Hartford Could Default On Its Debt As Soon As Next Month, Moody’s Says

Moody’s latest warning about Hartford Connecticut is its most dire yet.

In a report issued Thursday, the ratings agency’s analysts said Hartford, Connecticut’s once-proud capital city, could default on its debt as soon as next month, forcing the capital of the country’s wealthiest state (on a per capita basis) into bankruptcy.

If the city doesn’t change course (and given its shrinking tax base and the departure last year of Aetna, a major insurance company that was founded in Hartford and had located its headquarters in the city for more than 150 years, reforms appear unlikely), receive a state bailout or strike some kind of deal with its creditors, Moody’s says lenders can expect it to run up annual deficits in excess of $60 million through the next 20 years.

Moody’s (along with its rivals Fitch and Standard & Poor’s) downgraded Hartford’s credit rating on Sept. 26 to Caa3 from Caa1, reflecting a view that creditors would only manage to recoup between 60% and 80% of their principal should Hartford default.

Of course, there’s no guarantee that the state government will be there to support troubled Hartford. Four months into the fiscal year, Connecticut is the only state in the country that hasn’t passed a budget as lawmakers the state’s lame-duck Democratic Gov. Dannel Malloy joust over how to close a $3.5 billion two-year budget deficit. In a reflection of the state’s broader fiscal crisis (as is the case in many US states), Moody’s says Hartford’s public employee unions represent a “significant constraint” to cutting the city’s deficit, as the Hartford Courant points out.

Moody’s called Hartford’s unions “a constraint” to trimming the city’s deficit. “Contractual salary increases and employee benefits are significant contributors to the city’s long term structural imbalance,” the report read. Unions would have to make “significant concessions” for Hartford to narrow those deficits, it said.

…click on the above link to read the rest of the article…

Creditworthiness of New York and Illinois: One is Bankrupt

October 18, 2017

CREDITWORTHINESS OF NEW YORK AND ILLINOIS: ONE IS BANKRUPT

Summary

Unless used for capital improvements, any new Illinois State borrowing, regardless of security structure, will amount to nothing more than kicking the can further down the road.
Markets remain open to uncreditworthy government borrows longer than they should. In a low interest rate environment, investors will stretch credit standards.
Benchmark bond ratings are at variance with the rating agencies.

Everyone knows Illinois’ financial condition is poor. Conventional thinking seems to be that a bond default, should that happen, would be many years in the future. Pardon me, but wasn’t that the thinking right up to Puerto Rico’s, “We can’t pay” announcement? To answer the question of just how badly off is Illinois, I assembled a list of key creditworthiness indicators and applied them to New York, a highly rated state, and Illinois.

COMMENTARY AND BENCHMARK PRIVATE BOND RATINGS

The State of New York is managing its financial resources and obligations in a better-than-average manner. Particularly, the State’s employee pensions are reported to be 90% funded, but the general fund deficit must be contained and then eliminated. Unfunded OPEB costs are too high and can be renegotiated. Funded and pro forma unfunded long-term contractual obligations equaled 23% of general fund revenue in FY ended June 30, 2017, and exceeds the 15% threshold for a Benchmark AA or AA+ credit rating.

*Both NYS income tax and sales tax bonds are payable from annual general fund appropriation. For additional information, click here.

COMMENTARY AND BENCHMARK PRIVATE BOND RATINGS

The State of Illinois, in my opinion, is past the point of no return. It does not have the ability to raise taxes or cut spending to the degree necessary to reduce the annual cost of bond and retiree benefits from 33% to a sustainable level. The amount of debt issued by Illinois requires a moderate 8% of general fund revenues to pay P&I.

…click on the above link to read the rest of the article…

It’s Over for Sears Canada

October 11, 2017

It’s Over for Sears Canada

Brick and mortar meltdown.

Sears Canada hired the same leading bankruptcy advisory firm on June 12 that had represented Target Canada in its insolvency proceedings. Ten days later, it filed for bankruptcy protection to restructure its capital and its operations, shutter dozens of it 225 stores and lay off nearly 3,000 employees, but planned to continue operating. Today it said that the restructuring efforts failed, and that it would seek court approval to liquidate, shutting all its remaining stores and laying off its remaining 12,000 employees.

Retailers are notoriously difficult to restructure. Once they’re this deep in trouble, after years of losses, they own few assets and are burdened with debts, as everything has been sold or pledged to creditors. Their suppliers, who’ve been burned too many times, are getting skittish. Lenders are getting desperate. And acquirers can be impossible to find. Most retailer bankruptcies start out as restructurings but end as liquidations.

To stay alive while losing money for years, Sears Canada has sold off most of its real estate holdings, and the most valuable assets are already gone. What’s left are C$1.1 billion ($880 million) in liabilities.

“The company deeply regrets this pending outcome and the resulting loss of jobs and store closures,” the company said in the statement.

Pending court approval to begin the liquidation process, Sears Canada said that it would kick off liquidation sales at its stores as soon as October 19 and continue through the holiday selling period.

In the bankruptcy filing in June, the company spoke of its “reinvention” and its “brand reinvention,” how it “rebooted its customer experience and service standards,” and how its “newly designed site built in-house by a new technology team” and some other factors would make this restructuring work.

…above link to read the rest of the article…

This Is What The Death Of A Nation Looks Like: Venezuela Prepares For 2,300% Hyperinflation

October 10, 2017

This Is What The Death Of A Nation Looks Like: Venezuela Prepares For 2,300% Hyperinflation

Back in January 2016, we showed what the collapse of Venezuela looks like, when in addition to charting Venezuela’s imploding currency (which back then was trading at a positive expensive 941 bolivars to the dollar), we presented what at the time was the IMF’s latest Venezuela inflation forecast, which stunned us as it surged from 275% in the just concluded 2015 to a whopping 720% at the end of 2016.

Fast forward nearly two years until today, when the IMF released its latest estimate of what it believes will happen to Venezuela’s economy in the coming year and a half. What is striking, besides the fact that Venezuela has somehow still managed to avoid bankruptcy, is that the IMF now expects Venezuela’s hyperinflation to reach a staggering 2,349% in 2018, after rising by “only” 626% this year, the highest estimate for any country tracked by the IMF. While the South American country stopped reporting economic data in 2015, the IMF estimates that last year inflation clocked in around 254%, a number which is set to soar in the coming years for obvious reasons.

At the same time as residents scramble to find alternative currencies to the local paper which will lost all of its purchasing power over the next year, the IMF predicts the “intensification of the political crisis in Venezuela” will lead to a further decrease in economic output. As a result, GDP is expected to shrink 6% in 2018, after dropping an estimated 12% in 2017.

And, as oil production declines and uncertainty increases, unemployment is forecast to increase to about 30% in 2018, also the highest and followed by South Africa’s 28% and Greece’s 21% .

…click on the above link to read the rest of the article…

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