View Full Version : The Russian economy (catch all)
OUTLAW 09
12-19-2014, 09:30 PM
Seems Russia is on the verge of a banking failure after the Rubel firmed.
http://finance.yahoo.com/news/russias-largest-bank-warns-full-185900610.html
#Russia's banks are broke and need to be bailed out now — @washingtonpost
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/12/18/the-latest-bad-news-for-putin-russias-banks-need-to-be-bailed-out-now/ …
@TheEconomist pic.twitter.com/DbhNSYRkql
OUTLAW 09
12-21-2014, 09:34 AM
Russia talks about foreign investment---it seems to now be leaving as the fall of rubel no longer makes Russia an attractive market plus fears of nationalization uttered often in Moscow.
Virtually all of the foreign auto makers (once the pride of Russian investment projects and employers) are slowing and or stopping production.
Car sales are totally dead unless high end where Russians are buying like crazy before the prices rocket.
De-investment coming: Western Firms Slash Russia Investment Over Ruble Fall:
http://www.themoscowtimes.com/business/article/western-firms-slash-russia-investment-over-ruble-fall/513695.html …
pic.twitter.com/b3p3VQcvXx
The week the dam broke in #Russia and ended #Putin's dreams. It’s going to be worse than the default crisis in 1998
http://fw.to/SntebP
Most European suppliers have stopped shipping products to their Russian counterparts and the Russian stores that were sold out are virtually empty with n customers thus no earnings--IKEA has stopped shipping kitchens and kitchen equipment due to heavy price changes of 50% or more.
OUTLAW 09
12-22-2014, 11:24 AM
#Kazakhstan aims to diversify ties away from #Putin Eurasian Union during #Kyiv talks
http://uatoday.tv/politics/kazakhstan-president-aims-to-diversify-ties-away-from-putin-s-eurasian-union-during-kyiv-talks-398801.html …
pic.twitter.com/R20latDsTO
OUTLAW 09
12-22-2014, 12:44 PM
Russia faces full-blown crisis, says Kudrin, predicting defaults and the country's credit rating cut to junk
http://on.ft.com/1x2BChj
@ninaivanovna Russian Central Bank printing money faster than his provision of paper.
Meanwhile, Russia's Central Bank has not published its report of how much they spent propping up the ruble last week
http://cbr.ru/Eng/hd_base/?PrtId=mrrf_7d
OUTLAW 09
12-22-2014, 06:32 PM
SAUDI OIL MINISTER: I Don't Care If Prices Crash To $20 — We're Not Budging
http://uk.businessinsider.com/r-saudis-naimi-says-opec-will-not-cut-output-however-far-oil-falls-mees-2014-12 …
OUTLAW 09
12-23-2014, 09:33 AM
Explains a lot. Russia forcing state firms to intervene in currency market to the tune of $1B daily
http://kommersant.ru/doc/2639259
Now that Putin has ordered Russian companies to support the ruble there is a new chance for currency speculators to cash in even more.
@andersostlund -the fact that a hefty part of the sovereign wealth funds consists of the retirement funds of the Russian people is tragic.
Russian regulators take over retail bank as depositors take fright
http://www.wsj.com/articles/russia-central-bank-to-bail-out-private-lender-trust-bank-1419248842 …
This bank is the first "failed Russian bank in this crisis".
Russia is living by the week now. When the crash comes it will be enormous.
Russian state gas monopoly Gazprom's extraction in 2014 falls to lowest in its history 443-445 billion cubic meters.
http://www.gazeta.ru/politics/news/2014/12/23/n_6771361.shtml …
OUTLAW 09
12-23-2014, 02:00 PM
Russia starts bailing out banks and controlling grain prices as economy faces 'full-blown crisis' - Telegraph
http://www.telegraph.co.uk/finance/economics/11307775/Russia-starts-bailing-out-banks-as-economy-faces-full-blown-economic-crisis.html …
OUTLAW 09
12-23-2014, 03:38 PM
The Potemkin ruble is "floating" at 55.3332, not that it matters, given the heavy intervention:
http://www.bloomberg.com/quote/USDRUB:CUR …
There has been extremely heavy hidden intervention o just keep it at this level--the question is how much longer can the RCB hold the dam?
OUTLAW 09
12-23-2014, 04:43 PM
The Potemkin ruble is "floating" at 55.3332, not that it matters, given the heavy intervention:
http://www.bloomberg.com/quote/USDRUB:CUR …
There has been extremely heavy hidden intervention to just keep it at this level--the question is how much longer can the RCB hold the dam?
Forcing major #Russia corps to sell $1bln/day for months is sure to make their creditors and shareholders happy
http://www.ft.com/fastft/255251
Rating agency has dark forecast: "Moody's now expects Russian GDP to contract by 5.5% in 2015 and 3% in 2016."
Why the ruble stopped falling and what next
http://www.bloombergview.com/articles/2014-12-23/how-putin-stopped-the-rubles-collapse …
OUTLAW 09
12-23-2014, 09:13 PM
Russian Parliament to reject paying debts to all countries sanctioning Moscow for its crimes
pic.twitter.com/PyXvJMm3Zr
OUTLAW 09
12-24-2014, 10:24 AM
Russian Parliament to reject paying debts to all countries sanctioning Moscow for its crimes
pic.twitter.com/PyXvJMm3Zr
#Russia may suspend the debt servicing to "aggressor countries" - EU and US.
Russia says, that the total foreign debt is $ 678,4 billion.
OUTLAW 09
12-24-2014, 12:21 PM
Moody's downgrades Gazprom's foreign currency rating to Baa2; negative outlook http://fw.to/EOeChAQ
Russia begins a $100 billion private-sector bailout as its bonds face 'junk' rating
http://read.bi/1tbxkpF
OUTLAW 09
12-24-2014, 03:38 PM
The Moscow overnight MosPrime rate stands at 23.5 percent. There's no liquidity and it's only a matter of time before banks start failing.
OUTLAW 09
12-25-2014, 08:17 AM
Russia's central bank to refinance exporter debt
http://on.ft.com/1zhyxbu
Good Ruble Jokes.
http://www.rferl.org/content/russian-ruble-jokes/26756902.html …
Standard & Poor’s said there’s at least a 50 percent chance it will take Russia’s rating down within 90 days.
http://bloom.bg/1tbqEYO
Russia debt closer to junk status http://cnnmon.ie/1AXuzHA
Breaking the boundaries. The transformation of Central European gas markets http://www.osw.waw.pl/en/publikacje/point-view/2014-12-10/breaking-boundaries-transformation-central-european-gas-markets …
Low oil prices may stay for 15 years — economists
http://tass.ru/en/economy/768768 …
According to Newsweek, Putin gathered all Russia's oligarchs last week and demanded they convert dollars to Rubles
http://www.newsweek.com/russias-rich-gets-richer-dollars-ruble-plunges-293910#.VJs-gR-mEfk.twitter …
OUTLAW 09
12-26-2014, 09:59 AM
GAZPROM NEFT SELLS MORE THAN HALF OF FX REVENUE.
- So the rumors on fx revenue force sale are true. #USDRUB 50.76/52.70
The pure monetary component of the central bank’s reserves has dropped to about $172B
http://www.bloomberg.com/news/2014-12-25/ruble-defense-curtails-russian-reserves-by-15-7-billion-in-week.html …
OUTLAW 09
12-26-2014, 04:50 PM
GAZPROM NEFT SELLS MORE THAN HALF OF FX REVENUE.
- So the rumors on fx revenue force sale are true. #USDRUB 50.76/52.70
The pure monetary component of the central bank’s reserves has dropped to about $172B
http://www.bloomberg.com/news/2014-12-25/ruble-defense-curtails-russian-reserves-by-15-7-billion-in-week.html …
Russia trebles Trust Bank bailout to $1.9bn:
http://on.ft.com/1zmoEJA #FT
Ruble recovery streak lasted five days; Russia adds duty on wheat exports. http://www.rferl.org/content/russia-ruble-ends-modest-gains-wheat-duty/26763850.html …
OUTLAW 09
12-26-2014, 05:07 PM
Belarusian Prime Minister Mikhail Miasnikovich and his Russian counterpart Dmitry Medvedev discussed joint projects and ways to provide financial support for Belarus in a phone conversation on December 25, state-owned news agency BelTA reports.
The premiers of the two countries agreed to make coordinated economic decisions taking into consideration the global uncertainties. They noted that the Eurasian Economic Union would make it easier to 'overcome the difficulties'.
The agreement on the establishment of the Eurasian Economic Union is to come into force on January 1, 2015. According to Russia's president Vladimir Putin, one of the main goals of the Union is 'to become a pole of the contemporary world and play a role of the effective link between Europe and dynamic Asia-Pacific region'.
U.S. political scientist Zbigniew Brzeziński called the EEU 'Russia's new empire'.
OUTLAW 09
12-26-2014, 07:18 PM
Ruble's day range: 50.7643 - 54.7039 to USD. That is almost 8%. The ruble is still very volatile. I think currency crisis is far from over
OUTLAW 09
12-26-2014, 09:49 PM
Ruble's day range: 50.7643 - 54.7039 to USD. That is almost 8%. The ruble is still very volatile. I think currency crisis is far from over
Oil declines amid stronger dollar, crude oversupply in U.S.
http://www.reuters.com/article/idUSKBN0K403120141226 …
OUTLAW 09
12-27-2014, 10:17 AM
Finally a Russia politician utters a "truth".
#Russia's Vice PM Kozak hopes coal supplies to #Ukraine will solve #Crimea energy crisis.
http://ria.ru/economy/20141227/1040383189.html …
Finally, some truth
Seems Russia might "own" Crimea BUT they definitely cannot supply/support it without the "hated" Ukraine.
OUTLAW 09
12-27-2014, 10:20 AM
Russia's ex-finance minister Kudrin founded platform says ruble might hit 120 per USD ]
http://www.vedomosti.ru/finance/news/37867161/kurs-rublya-mozhet-ujti-na-otmetku-120-130-rublej-komitet
That would mean a complete Russian economic collapse and defaults.
OUTLAW 09
12-27-2014, 02:38 PM
Oil Caps Fifth Weekly Loss on Global Supply Glut Concern
http://buswk.co/1xS0dIy
Ukraine using Gazprom's old pipeline network to transport Ukrainian shale gas to old Gazprom customersin EU is Putin's absolute nightmare
Imagine if Qatar was right next to Europe with existing pipeline network. Thats Ukraine's once shale gas boom is rolling.
Extraction has already begun. Ukraine is the biggest investment opportunity in the world right now.
OUTLAW 09
12-27-2014, 03:37 PM
Russia rations metro tokens in St. Petersburg after public begins bulk panic buying
http://uatoday.tv/business/russia-rations-metro-tokens-in-st-petersburg-after-public-begins-bulk-panic-buying-399965.html …
OUTLAW 09
12-29-2014, 06:05 PM
After (artificially?) having been stabilized, the Ruble is on the run again... pic.twitter.com/ARWDjYJV4O
Putin shoot himself in the foot today pic.twitter.com/I6HeKlOlrn
Brent and Ruble prices met today-- Brent 58,8 $
#Ruble above 58/USD, a 1-day drop of almost 9%. Not comforting news for Muscovites before tomorrow's #Navalny riots.
pic.twitter.com/nHbSpPj7dP
Brent 57,9 $-----10% down for rubel---early 2015 is not looking good for Russian economy
mirhond
12-30-2014, 10:11 AM
Russia rations metro tokens in St. Petersburg after public begins bulk panic buying
http://uatoday.tv/business/russia-rations-metro-tokens-in-st-petersburg-after-public-begins-bulk-panic-buying-399965.html …
Wow, journalists just discovered a mistery hidden in the plain sight, wise and cunning they must be! :rolleyes:
SPB dwellers do it every december as price for mass transit rizes every year, usually in January. We, Muscowites do nothing like this, and guess why? RFID chips! :cool:
OUTLAW 09
01-02-2015, 11:32 AM
Wow, journalists just discovered a mistery hidden in the plain sight, wise and cunning they must be! :rolleyes:
SPB dwellers do it every december as price for mass transit rizes every year, usually in January. We, Muscowites do nothing like this, and guess why? RFID chips! :cool:
mirhond--care to comment on your rubel falling even further? Brent at 57.
By David Sheppard
LONDON (Reuters) - Brent crude (LCOc1) reversed early gains to trade near $57 (37 pounds) a barrel on Friday, as the glut of oil that has halved prices since June overshadowed investors repositioning at the start of the year for an eventual recovery.
Brent has fallen to its lowest since 2009 as top exporter Saudi Arabia and other large Gulf producers have declined to cut production in the face of fast-growing U.S. shale oil output, despite pleas from other members in the Organization of the Petroleum Exporting Countries (OPEC).
"Nothing has changed on the supply side. Unless there are some supply cuts, oil markets can't be strong at the moment," said Ken Hasegawa, commodity sales manager at Tokyo's Newedge Japan.
Brent crude (LCOc1) for February delivery was up 8 cents at $57.41 at 0950 GMT, more than $1 below the day's high at $58.54, which was hit within 30 minutes of the open of trading. Prices touched a post-2009 low of $55.81 on Wednesday.
Traders said a number of buy orders would have been placed ahead of the start of the new year's trading, with some willing to bet prices will bounce this year as expensive oil projects are potentially shuttered or cancelled.
Front-month U.S. crude (CLc1) for February delivery was up 28 cents a barrel from Wednesday's close at $53.55, after reaching an intraday high of $55.11 shortly after the start of trading.
Markets were shut on Thursday for the New Year holiday.
Prices faced pressure on Friday after a senior Libyan oil official said a major fire in an oil storage tank at the North African country's largest crude export port had been extinguished.
Iraq, the second-largest producer in OPEC, said exports had averaged the highest since 1980 in December, reaching 2.94 million barrels per day.
Iran's deputy foreign minister on Thursday called on its regional rival Saudi Arabia to take action to support oil prices, saying producer countries across the Middle East will be hurt unless the slump is reversed.
WEAK CHINA DATA
The jump in oil prices early on Friday was also capped by surveys showing weak factory activity in China in December, which underlined the challenges facing the country's manufacturers as they fight rising costs and softening demand in the world's second-largest economy.
China's official Purchasing Managers' Index (PMI) slipped to 50.1 in December from November's 50.3, with weaker-than-expected oil demand growth in China last year contributing to the price collapse.
Euro zone manufacturing also ended 2014 on a subdued note as output, new orders and employment all recorded sluggish growth, a survey showed on Friday.
In the United States benchmark oil prices took some support from data on Wednesday showing inventories (USOILC=ECI) fell by 1.8 million barrels in the last week, but an increase of 2 million barrels at the U.S. crude contract's delivery hub of Cushing, Oklahoma kept gains in check.
OUTLAW 09
01-02-2015, 03:39 PM
Wow, journalists just discovered a mistery hidden in the plain sight, wise and cunning they must be! :rolleyes:
SPB dwellers do it every december as price for mass transit rizes every year, usually in January. We, Muscowites do nothing like this, and guess why? RFID chips! :cool:
mirhond--Brent now at 55.4 USD and what about those mass transit rate increases?
New year, same old song. #Russia Ruble weakens sharply. Drops >5% beyond 60 vs Dollar.
pic.twitter.com/D2qtncwomL
OUTLAW 09
01-05-2015, 01:53 PM
Brent now at the 54 range and still going down----
EEU dead by 2015? Great article on the EEU and it's potential failure---no wonder Russia wants EU/EEU talks---
http://www.foreignaffairs.com/articles/142745/nate-schenkkan/eurasian-disunion#cid=soc-twitter-at-snapshot-eurasian_disunion-000000
OUTLAW 09
01-05-2015, 01:54 PM
2014 was a rough year for Russia's richest men, who lost a combined $46+ billion dollars, per Bloomberg Billionaires
pic.twitter.com/46TODeAU7m
Oil's "glass floors" (pt 94):
#WTI approaching $50 per barrel.
http://www.bloomberg.com/energy/ pic.twitter.com/Fx2diclCQw
OUTLAW 09
01-05-2015, 03:28 PM
2014 was a rough year for Russia's richest men, who lost a combined $46+ billion dollars, per Bloomberg Billionaires
pic.twitter.com/46TODeAU7m
Oil's "glass floors" (pt 94):
#WTI approaching $50 per barrel.
http://www.bloomberg.com/energy/ pic.twitter.com/Fx2diclCQw
The price of oil continues its dramatic fall. The Brent is trading at $54.04 today. That is -$2.38 or -4.22%. Lowest price since early 2009.
Brent is now 53.7-----
Fascinating yarn on head of Moscow hedge fund doing smoke and mirrors disappearing act, and taking the cash with him http://www.wsj.com/articles/chaos-ru...18446?mod=e2tw …
OUTLAW 09
01-05-2015, 04:00 PM
The price of oil continues its dramatic fall. The Brent is trading at $54.04 today. That is -$2.38 or -4.22%. Lowest price since early 2009.
Brent is now 53.7-----
Fascinating yarn on head of Moscow hedge fund doing smoke and mirrors disappearing act, and taking the cash with him http://www.wsj.com/articles/chaos-ru...18446?mod=e2tw …
Russia has now got to truly rethink it's Ukrainian policy---
Brent 53,4 $ and still moving down in market trades
NOW the ruble fall is kicking in as the oil price sinks--truly not good
1 $ = 60 Ruble
OUTLAW 09
01-05-2015, 04:05 PM
A few thoughts on the Eurasian Union's unveiling this week:
http://thediplomat.com/2015/01/eurasian-economic-union-dead-on-arrival/ …
Part resounding thud, part thundering silence.
OUTLAW 09
01-05-2015, 04:13 PM
Russia has now got to truly rethink it's Ukrainian policy---
Brent 53,4 $ and still moving down in market trades
NOW the ruble fall is kicking in as the oil price sinks--truly not good
1 $ = 60 Ruble
Brent 53,3 $
OUTLAW 09
01-05-2015, 04:46 PM
Brent 53,3 $
Now the US oil prices are falling just as fast--NOW under 50
BREAKING: US oil price drops below $50 a barrel, First time since 2009.
BRENT is now 52.9 AND falling--will be interesting to see the impact on the Russian markets and rubel tomorrow---
USD-RUB 60.2083
http://www.bloomberg.com/quote/USDRUB:CUR …
OUTLAW 09
01-06-2015, 04:51 PM
Wow, journalists just discovered a mistery hidden in the plain sight, wise and cunning they must be! :rolleyes:
SPB dwellers do it every december as price for mass transit rizes every year, usually in January. We, Muscowites do nothing like this, and guess why? RFID chips! :cool:
mirhond-price of milk in Moscow has jumped from 45 rubles to 75 rubels today---you have a really great leader and a really great economy there mirhond.
#brent 51,59. Should we consider it a Christmas gift for #Ukraine?pic.twitter.com/O1WpOCjRXQ
OUTLAW 09
01-06-2015, 08:32 PM
Collapsing Ruble due to falling oil prices creating food shortages in #Russia
http://bit.ly/1wkOnkU
pic.twitter.com/rtl6xfgNwB
OUTLAW 09
01-07-2015, 08:36 AM
Brent oil now below $50 http://money.liveuamap.com/en/2015/7-january-brent-oil-now-above-$50 … pic.twitter.com/3Qh2KVi2oY
BNP Paribas says Russia no longer has enough reserves to cover external debt. Derivatives flash default warnings
http://money.liveuamap.com/en/2015/7-january-bnp-paribas-says-russia-no-longer-has-enough-reserves …
BNP Paribas: Russia no longer has enough reserves to cover ext. debt, enters crisis 2x as levered as pre-Lehman crash http://www.telegraph.co.uk/finance/economics/11328974/Russia-faces-perfect-storm-as-reserves-vanish-and-derivates-flash-default-warnings.html …
Gazpromneft Leads Russian ADR Drop as Crude Rout Deepens
http://bloom.bg/1HHmn27
Russian FX reserves fallen from $511bn to $388bn in a year. Total FX debt is $654bn.
Current Russian CDS levels imply a 32% expectation of a sovereign default over the next five years. (Markit)
This is up from 21% three weeks ago.
OUTLAW 09
01-07-2015, 11:22 AM
The Collapsing $Ruble Is Creating Food Shortages as Russian shopkeepers can't update their price lists fast enough
http://uk.businessinsider.com/the-ruble-is-falling-against-the-dollar-as-oil-prices-continue-to-slide-2015-1?r=US …
Will we see a new decade of $20-a-barrel oil, as we saw in the 1990s? http://www.theguardian.com/business/2015/jan/06/oil-price-fall-difficult-economic-future-uk-russia …
Manufacturers face "bloodbath" in Russia as ruble collapses.
http://www.bbc.com/news/business-30552925 …
OUTLAW 09
01-09-2015, 03:43 PM
Brent oil about to go sub-$50 again...
http://www.bloomberg.com/energy/
pic.twitter.com/jQ0PYyy1ID
OUTLAW 09
01-09-2015, 04:28 PM
Brent oil about to go sub-$50 again...
http://www.bloomberg.com/energy/
pic.twitter.com/jQ0PYyy1ID
Crude Brent is at $49.90. Lowest price since early 2009. pic.twitter.com/TPrbzgCxB6
OUTLAW 09
01-09-2015, 04:45 PM
Crude Brent is at $49.90. Lowest price since early 2009.
pic.twitter.com/TPrbzgCxB6
Russian better have a Plan Z by now as Brent is heading towards 40 since it broke through the glass barrier of 50.
Brent crude has continued its fall today, slipping to $49.16 per barrel
pic.twitter.com/NfbGAPnX8F
OUTLAW 09
01-10-2015, 11:58 AM
Fitch downgraded #Russia's credit rating to"junk"level,now expects reduction of #economy by 4%
http://bit.ly/1FBMGsS
pic.twitter.com/loH5Utfe4Y
OUTLAW 09
01-10-2015, 12:12 PM
S Guriev: 'If low oil prices persist, and sanctions remain in place, Russia will run out of cash by the end of 2016'
http://www.project-syndicate.org/commentary/facebook-versus-putin-by-sergei-guriev-2015-01 …
OUTLAW 09
01-10-2015, 12:39 PM
At this rate Brent will break under 40 by the end of next week--once 40 is broken it will actually make the run to 20 to test to see exactly where the ME is ready to support or let oil continue the fall into the upper 10s as their production n costs are in the 2-4 per barrel ranges.
Not sure if it makes 20 exactly just what Russia will do as they have cranked up production in order to make some money just via production but then that drives the oversupply which is the killer right now.
Oil drops to $48 as Gulf official says Opec will keep pumping | via @Telegraph
http://fw.to/seiKmKT
OUTLAW 09
01-10-2015, 05:06 PM
Federal highway "Lena" "M56" (1163 km)
Instead of repair, 44bn rubles were redirected to #Crimea's infrastructure -TT
pic.twitter.com/Q7XSqtLnHT
OUTLAW 09
01-11-2015, 03:05 PM
Tehran (AFP) - Iran's President Hassan Rouhani, flanked by Venezuelan counterpart Nicolas Maduro, vowed Saturday to "neutralise" the threat posed to both countries by plummeting oil prices, in a barely veiled broadside at Saudi Arabia.
OPEC members Iran and Venezuela are reeling from a slide in the cost of crude to around $50 per barrel from $100 just six months ago, a precipitous fall that is straining their budgets.
Losses accelerated after the Organisation of Petroleum Exporting Countries cartel, of which Iran and Venezuela are founders, chose late last year not to cut output despite lower prices and oversupply.
Rouhani, his oil minister and other top officials in Tehran have criticised fellow OPEC member Saudi Arabia for not supporting steps to support higher crude prices.
Rouhani was meeting with Maduro when he again appeared to point the finger at Riyadh, in remarks carried on the Iranian government's website.
"Without doubt, cooperation of countries that are on the same line in OPEC can neutralise the plans of some powers who are against OPEC, stabilising a reasonable price for oil in 2015," Rouhani said.
Maduro arrived in Tehran late Friday, accompanied by his ministers for oil, foreign affairs, finance and industry, plus Venezuela's Central Bank chief, on what Iranian state media said would be a 24-hour trip.
According to the official remarks, Maduro echoed Rouhani, "calling for the cooperation of oil exporting countries to bring back stability."
Iran's supreme leader, Ayatollah Ali Khamenei, also met Maduro and denounced what he called "the bizarre decrease of oil prices in such a short time."
"This can only be a political act... Our enemies use petrol as a political lever and have certainly a role to play in the lowering of prices," he said, without elaborating.
Iran's present budget was based on an oil price of $100, leaving a big shortfall in recent months. In December, Tehran unveiled a draft budget for the next financial year predicated on $70 per barrel.
Iran and Venezuela pledged to reach agreements during Maduro's trip that would "expand trade and investment, export of technical and engineering services and collaboration in pharmaceuticals."
"Venezuela can be a suitable base for the export of Iran's goods and services to Latin American countries," said Rouhani, who is seeking to reduce Iran's reliance on oil sales by boosting non-oil exports.
Venezuela has the world's largest proven oil reserves but its economy -- 96 percent of the government's foreign currency comes from crude -- has been gutted by inflation and basic goods shortages.
In late December, recession-hit Venezuela reported that inflation for the 12 months to November topped 63 percent -- one of the highest rates in the world.
Maduro travelled to China this week in search of investment and said he secured $20 billion.
"Iran can cooperate to remove Venezuela's needs in housing, road construction, food products and medicine," Rouhani added Saturday.
OUTLAW 09
01-11-2015, 05:28 PM
More bad news for Putin: Russia’s banks need to be bailed out now http://wapo.st/1DQJWX
OUTLAW 09
01-12-2015, 12:38 PM
Brent accustomed & comfortable below $50
http://www.wsj.com/articles/brent-crude-falls-below-50-in-asian-trading-1421039495 …
OUTLAW 09
01-12-2015, 02:40 PM
Here comes 40 per barrel:
Good morning!
It is a new week, and crude oil is making new lows.
Near 8:10 a.m. ET on Monday morning, the price of West Texas Intermediate crude oil was down more than 3% to below $47 a barrel, hitting as low as $46.77 as WTI closes in on another multiyear low.
The latest drop in crude on Monday morning comes after a research note from Goldman Sachs saw the firm put a six-month price target on WTI of $39 a barrel.
OUTLAW 09
01-12-2015, 05:48 PM
Russian firms running out of cash, facing bankruptcies says head of Russian banking assoc.
http://finance.yahoo.com/news/russia-faces-wave-bankruptcies-120700044.html;_ylt=AwrBJR6xu7NUihYApsjQtDMD …
pic.twitter.com/JEl8RWF0ku
OUTLAW 09
01-12-2015, 06:16 PM
Russian Banks Plead for Interest Rate Cut as Borrowing Costs Spiral | Business | The Moscow Times http://www.themoscowtimes.com/business/article/russian-banks-plead-for-interest-rate-cut-as-borrowing-costs-spiral/514253.html …
Ukraine's Hard Currency Reserves Suffered Biggest Fall Since Soviet Era in 2014 | Business | The Moscow Times
http://www.themoscowtimes.com/business/article/ukraine-s-hard-currency-reserves-suffered-biggest-fall-since-soviet-era-in-2014/514257.html …
OUTLAW 09
01-13-2015, 06:37 AM
The unravelling union: Putin's plans for Russian-led regional integration are in disarray
http://on.ft.com/1yc2Y5f pic.twitter.com/KHXtnm4pYF
Russia’s Sinking Economy Could Provoke Unrest and Revolutions in Central Asia and Caucasus.
https://foreignpolicy.com/2015/01/12/how-russias-sinking-economy-could-provoke-unrest-on-its-doorstep/ …
The new world oil order: US crude drops below $46/bbl for first time since Apr2009.
pic.twitter.com/fh2Ptdp9P3
Crude Oil (Brent) is at $46.54. The Brent has fallen about 10% this week. Might hit $40 per barrel already next week.
Russia face wave of bankruptcies, Banks may need more than $155B in capital for credit and foreign exchange losses.
http://cnnmon.ie/1y34R5H
OUTLAW 09
01-13-2015, 09:49 AM
Back to over 65 rubles to the dollar as oil continues its slide #RUB #oilprice
pic.twitter.com/CJyN9ClXZG
OUTLAW 09
01-13-2015, 10:41 AM
Abu Dhabi (AFP) - The United Arab Emirates said on Tuesday that OPEC will no longer move to shore up crude prices, arguing that rising North American shale oil output needs to be curbed.
World prices have been falling since June but the pace of the slide accelerated in November when the Organisation of the Petroleum Exporting Countries (OPEC) decided to maintain its production unchanged at 30 million barrels per day.
Analysts say that richer cartel members like the UAE have been ready to accept the price fall in the hope that it will force higher-cost shale producers out of the market.
"We cannot continue to be protecting a certain price," UAE Energy Minister Suhail al-Mazrouei said.
"We have seen the oversupply, coming primarily from shale oil, and that needed to be corrected," he told participants in the Gulf Intelligence UAE Energy Forum in Abu Dhabi.
Oil prices continued their slide towards six-year lows in Asian trade on Tuesday after Brent crude closed below $50 a barrel the previous day for the first time since April 2009.
The fall came after Wall Street investment titan Goldman Sachs slashed its price outlook, adding to anxiety about global oversupply, weak demand and soft growth in the key Chinese and European markets.
Brent crude for February delivery fell $1.33 to $46.10 a barrel -- around its lowest point since April 2009.
US benchmark West Texas Intermediate shed $1.13 cents to $44.94 -- its weakest level since March 2009.
Mazrouei said the UAE remains "concerned" about balance in the oil markets but "cannot under any circumstances be the only party responsible," in reference to rising output from non-OPEC members.
Oil producers outside the cartel should be rational about their output, he said, adding that current prices are "not sustainable" for them.
"We are telling the market and other producers to be rational, to be like OPEC and look at growth in the market," Mazrouei said.
He said that if OPEC had opted to cut production, other producers would have stepped in to make up the lost output and the cartel would have lost market share without any effect on prices.
Mazrouei said current prices were "not sustainable," particularly for producers outside the Gulf region.
He said that with oil below $50 a barrel, it was uneconomic for shale oil producers to keep investing in increasing production.
"Shale oil brings almost four million (barrels per day) for the United States, and the hope is that it will bring another four million by 2020. That cannot be sustained, produced or invested in at the current oil price," he said.
Mazrouei said he did not expect a swift recovery in prices.
"It is unlikely that we'll see a sudden rise," he said.
Bear markets are always big challenges for oil exporters but this one does certainly come at one of the worst times for a country like Russia hit by many, mostly self-inflicted problems at once. Every additional time span at such low prices increases the pressure on the Russian economy and the Russian budget.
As was discussed before the Ruble crash does absorb a great deal of the direct damage on the budget but comes with high inflation, huge credit pressure and makes the Russian market far less attractive, reducing foreign investments even further. In short especially for European companies Russia as a market has turned from a golden opportunity to expand into a blood bath, as lots of the cost drivers are in euros but the revenue in euro has been cut by well over a third.
With Russian forces still occupying the Crimea and parts of SW-Ukraine and no political solution in sight and all the macro indicators pointing towards a recession with high inflation it is difficult to find bright spots in the Russian economy. A boost might actually come from the often very volatile energy market, but could it be in time for the economy and the political system?
The banking sector in Russia is of course under massive strain and I will maybe give it a closer look later. I mentioned earlier the very much exposed Austrian Raiffeisen, it's stock has lost more then 60% of it's value in one year.
P.S: That Iranian-Venezuelian show is deeply tragicomic, a parody of two pretty powerless politicians being busy for their internal audience. It would be nice to check that statement in a couple of years, but I and pretty much everybody else will have forgotten it by then...
Iran and Venezuela pledged to reach agreements during Maduro's trip that would "expand trade and investment, export of technical and engineering services and collaboration in pharmaceuticals."
"Venezuela can be a suitable base for the export of Iran's goods and services to Latin American countries," said Rouhani, who is seeking to reduce Iran's reliance on oil sales by boosting non-oil exports.
So with what will Venezuela pay those goods?
OUTLAW 09
01-14-2015, 10:11 AM
Official inflation 11.4% in Russia in 2014 but @aifonline price survey says it was actually 29.5%, only getting worse
http://www.aif.ru/money/mymoney/1419721 …
Much to the chagrin of global oil producers, $50 per barrel may become the ceiling, not the floor, for oil prices http://www.project-syndicate.org/commentary/oil-prices-ceiling-and-floor-by-anatole-kaletsky-2015-01 …
Russia Update: Ruble is at 66.51 to $1, Euro is at 78.39, Brent is at $45.83
http://goo.gl/6uPRFB
As oil prices plummet, Russia plans to cut its budget by 10 percent across all areas - except for military spending.
http://www.wsj.com/articles/russia-facing-budget-cuts-on-oil-price-western-sanctions-1421223776?ref=/home-page …
Russian fin minister: cut all expenditure by 10%, except for defense ...cuz healthcare & food is no priority http://www.reuters.com/article/2015/01/14/us-russia-crisis-idUSKBN0KN0Q620150114 …
Indeed official Russian numbers have to be taken with additional grains of salt after the country is partly on a war footing.
On a different note for some time the Russian government has obviously tried to muster the non-CBR fx reserves for it's delaying actions against the ruble's full. There are still considerable amounts of hard currency left but they have been depleted. Certainly it would be almost as foolish to look just at the CBR reserves (or it's selling rate) as it would be to only take the Russian state debt into account. Lots of countries (re-)discovered that the hard way in recent years.
I also anticipate a strong hit in demand in sectors like cars once the effect of anticipated purchases out of fear of steep price hikes diminishes and credit conditions hit large swaths of the Russian consumers.
OUTLAW 09
01-14-2015, 12:19 PM
Siluanov: RCB to sell 500bn Rubles of Foreign Reserve Fund (max for 2015)
http://tass.ru/en/economy/771075 …
Sberbank CEO;Oil key factor in Russia's slowdown:
http://tass.ru/en/economy/771076 …
Sanctions ineffective:
http://tass.ru/en/economy/771072 …
OUTLAW 09
01-14-2015, 02:08 PM
Sberbank president German Gref predicting "massive" crisis in Russia's banking industry
http://www.interfax.ru/business/417761
pic.twitter.com/eMRAl0qXfT
Russia's ex-PM #Primakov calling for Kremlin's retreat from eastern #Ukraine http://www.kommersant.ru/doc/2645293
pic.twitter.com/egOd9xyTFw
OUTLAW 09
01-15-2015, 09:03 AM
Top European Lending Bank Hit by Russia's Ruble Slide and Ukraine | Business | The Moscow Times
http://www.themoscowtimes.com/business/article/top-european-lending-bank-hit-by-russia-s-ruble-slide-and-ukraine-crisis/514397.html …
Putin Ally Chemezov to Take Over Aviation Industry | Business | The Moscow Times
http://www.themoscowtimes.com/business/article/putin-ally-fights-to-control-russia-s-defense-industry/514393.html …
Appears Russia is running out of money these days after they stated they would accept the court decision.
TASS: Russia - Too early to say if Russia will pay in Yukos case — justice minister
http://itar-tass.com/en/russia/771232 …
OUTLAW 09
01-15-2015, 11:53 AM
Appears the Russian Rubel Exchange problem has been solved.
Russia Update: Moscow Authorities Order Currency Exchange Boards Removed
http://goo.gl/v5gVzT "
OUTLAW 09
01-16-2015, 04:31 PM
Hague starts charging interest on $50bn Yukos fine:http://tass.ru/en/russia/771565 …
Could add $1.7bn in 1 yr.
A decade-long period of a steadily rising oil prices (and that of other raw materials) has given Russia a feeling of strength, bordering on invulnerability, which has made the country more assertive, and ready to use any opportunity to deploy its military power. Based on his analysis of Russian behaviour over the past 50 years, Daniel Gros finds that the abrupt reversal of this trend since the summer of 2014 portends a much less aggressive Russian stance as long as the price of oil remains at present le
http://www.ceps.eu/book/price-oil-and-sovietrussian-aggressiveness
OUTLAW 09
01-17-2015, 03:25 PM
Warnings of Russian Financial Crisis Spread as Banks Start Failing | Business | The Moscow Times http://www.themoscowtimes.com/business/article/warnings-of-russian-financial-crisis-spread-as-banks-start-failing/514503.html …
#Putin sacks U.S. trained economist In charge of ruble at #Russia's Central Bank.
Via @Forbes
http://www.forbes.com/sites/kenrapoza/2015/01/16/putin-sacks-u-s-trained-economist-in-charge-of-ruble-at-central-bank/ …
Putin's Capital Amnesty Could Put Russia on Money Laundering Blacklist | Business | The Moscow Times http://www.themoscowtimes.com/business/article/putin-s-capital-amnesty-could-put-russia-on-money-laundering-blacklist/514470.html …
OUTLAW 09
01-17-2015, 04:37 PM
#Fitch lowered the #ratings of 30 major #Russia|n financial institutions and #bank|s.
http://bit.ly/1y9oQiW
pic.twitter.com/vPMoFRmq15
Why Crimea Now Has the Second-Highest Inflation Rate in the World (http://www.businessweek.com/articles/2015-01-15/crimeas-inflation-is-second-highest-in-the-world)
News that inflation is running above 63.4 percent in Venezuela won't astonish anyone familiar with that economy. But the locale with the second-highest inflation rate in the world may be more surprising: Crimea.
Consumer prices on the Russian-annexed peninsula in December were 42.5 percent higher than a year earlier, according to data released this week by Crimea's official statistics service. Prices for some food items, such as eggs, meat, flour, and fruit, were up more than 60 percent. That pretty much wipes out the hefty increases in government salaries and pensions that Moscow announced for Crimea after its annexation last spring.
I predicted economic turmoil in Crimea high but underestimated of course some factors.
OUTLAW 09
01-23-2015, 02:22 PM
#Sberbank's Gref: the current situation is rather dramatic for Russian banks http://www.cnbc.com/id/102362787
OUTLAW 09
01-23-2015, 07:59 PM
Russia's Central Bank claims it spent ~$6,8B last week propping up the ruble http://www.cbr.ru/eng/hd_base/?PrtId=mrrf_7d …
OUTLAW 09
01-26-2015, 01:08 PM
Really interesting development--first Russia cannot economically support the Crimea and now...........
Russia stopped the funding of #Transnistria: "This excessive burden", - media
http://liveuamap.com/en/2015/26-january-russia-stopped-the-funding-of-transnistria-this …
OUTLAW 09
01-26-2015, 03:47 PM
Russian oil giant Rosneft to issue $6.1 billion of bonds amid fears of another ruble rout
http://read.bi/1zNYaGs
pic.twitter.com/iXfflG9cVB
OUTLAW 09
01-26-2015, 04:51 PM
US may disconnect Russia from SWIFT system
http://uatoday.tv/news/us-may-disconnect-russia-from-swift-system-405227.html …
With SWIFT cutoff already on the table, we are edging closer to the rupture of EU-Russia energy trade
Russia’s SB Bank stops client withdrawals
http://on.wsj.com/1BfjmRa
Real test for RCB on level of intervention
U.K. Wants EU to Block Russia From SWIFT Banking Network
http://bloom.bg/1qLIXzH
pic.twitter.com/3NYBSvWy12
OUTLAW 09
01-26-2015, 08:50 PM
Ruble plunges toward 70/$ after S&P downgrade to junk. Now down 7% today at 68.7/$
http://www.finam.ru/analysis/profile2C8800000B/?market=41 …
OUTLAW 09
01-27-2015, 12:25 PM
Deputy of Russian Central Bank directorate in Amur region shoots dead three colleagues and himself in the office http://rusnovosti.ru/posts/361867
Food Prices in Kaliningrad Rising Far Faster than Officials Say, Sparking Fears and Anger
http://windowoneurasia2.blogspot.com/2015/01/food-prices-in-kaliningrad-rising-far.html …
S&P downgraded Russia's credit rating to junk status
http://cnnmon.ie/1ynDj6j
pic.twitter.com/4JybQjbBVW
OUTLAW 09
01-27-2015, 01:06 PM
#Silunaov added that the S&P ratings agency... possibly made its decision without taking into account the anti-crisis plan
Russia's Finance Minister #Siluanov: "our task is not to spend the sovereign reserves thoughtlessly" http://www.reuters.com/article/2015/01/27/russia-crisis-siluanov-sp-idUSL6N0V628X20150127 …
#Russia refuses financial aid 4 #Moldova's breakaway region #Transdniestr 4 the first time. Got financial problems?
Russian business map "Who gets most of consumers' money". Beer, cigarettes etc.
http://rbcdaily.ru/magazine/business_maps/download/562949993752246
OUTLAW 09
01-27-2015, 03:26 PM
Russian business map "Who gets most of consumers' money". Beer, cigarettes etc.
http://rbcdaily.ru/magazine/business_maps/download/562949993752246
Interesting chart----
OUTLAW 09
01-27-2015, 03:27 PM
Moscow warns again on SWIFT- Medvedev: "our economic reaction [to being barred], and any other for that matter, will be unlimited
Medvedev threatens the West with "unrestrained reaction" if Russia is cut off SWIFT. Really awful brinkmanship.
http://flashnord.com/news/medvedev-prigrozil-zapadu-na-vozmozhnoe-otklyuchenie-rf-ot-sistemy-swift …
Europe may tighten sanctions on Russia as soon as Thursday over heightened Ukraine violence http://bloom.bg/1zpRU8l
Ben Judah @b_judah
This operetta by Shuvalov and Kostin only means one thing: exclusion from SWIFT appears to be the Russian elite's pain threshold
OUTLAW 09
01-27-2015, 05:58 PM
Fmr #Russia`n dep.min. of energy Milov: Rus reserves only existing on paper
http://www.epravda.com.ua/rus/news/2015/01/27/523909/ …
pic.twitter.com/7oo6dtcZ7s
OUTLAW 09
01-28-2015, 10:11 AM
Russia Finance Minister estimates external shocks to cause losses of $200 billion
http://kommersant.ru/doc/2655453
#Russia invites new sanctions
http://blogs.reuters.com/macroscope/2015/01/28/russia-invites-new-sanctions/
An LDPR lawmaker is indignant at the doubling of the price of porridge at the parliament canteen (Rus):
http://www.gazeta.ru/business/news/2015/01/28/n_6867097.shtml …
OUTLAW 09
01-28-2015, 11:48 AM
SWIFT Ban for Russia---
may cause Russia’s GDP to shrink by 5% - former Russian finance minister Alexei Kudrin
Greek stocks and bonds tumble. @moved_average cites "the rhetoric surrounding Russia"
http://www.bloomberg.com/news/articles/2015-01-28/greek-bonds-decline-with-stocks-as-new-government-takes-charge … pic.twitter.com/7JV4uGoHn3
OUTLAW 09
01-28-2015, 12:02 PM
From Interfax today:
13:37 Retail lending growth in Russia could be almost zero - Central Bank
13:23 Double rating downgrade not critical for Russian bank bonds - Central Bank
13:20 CB to quote ruble at 67.1506 rubles/$1 and 76.2629 rubles/EUR1 on January 29
12:48 RUSSIAN MINFIN CONSIDERING CUTTING RATES OR VOLUME OF FX DEPOSIT AUCTIONS, OR DROPPING THESE ALTOGETHER - MOISEYEV
12:47 RETAIL LENDING, EXCLUDING MORTGAGES, TO HAVE ALMOST ZERO GROWTH IN BASELINE SCENARIO – SIMANOVSKY
11:49 Russian regional debt grows 20% to over 2 tln rubles in 2014
There is certainly a torrent of bad news coming in for the Russian economy. As for many financial and economic data can seem steril and cold to many I think it is useful to look at it sometimes from more individual level:
Living Standards Slide for Russia's Struggling Pensioners (http://www.themoscowtimes.com/business/article/living-standards-slide-for-russia-s-struggling-pensioners/515018.html)
"In the 1990s there was nothing in the shops but fridges were full," Lisitsyn said, referring to the collapse of the Soviet Union which shattered supply lines and the command economy, forcing many to rely on home-grown produce.
"Now it's the other way round — there's everything in the shops but fridges are all but empty," said the former military officer and radio factory worker.
Sitting at a small formica table in the kitchen of his two-room flat in a Moscow suburb, Lisitsyn said he struggles to keep up with price rises for food and medicine, saying sometimes he walks into a shop "only to walk out again."
According to the article the average monthly pension in 2014 was around 10.000 rubles or 150$ at the current exchange rate which is of course amazingly little by Western standards. In general high inflation in basic stuff like food impact mostly the poor and in this case old, although the high rural proportion might reduce that connection in Russia to some degree. But living in the many little villages in very basic housing comes of course also at a price. The pensioners rappresent somewhat under a third of the Russian population.
It's a trend not lost on Putin, whose role as a protector of stability, social conservatism and generous state spending has won a strong following among the elderly. Their loyalty is now being tested by a financial crisis triggered by low oil prices and Western sanctions imposed on Russia over Ukraine.
I focused more on food prices and hadn't thought so much about medicine, which is mostly imported.
Russians perturbed at price rise, ruble fall - poll
13:56 January 28, 2015 Interfax
Rising food and everyday goods prices seem to be the biggest problem for Russians, at least, 77 percent say so (74 percent in Moscow), Levada Center told Interfax.
The respondents are no less concerned about the ruble fall (65 percent across the country and 70 percent in Moscow) and the performance of outpatient clinics and hospitals (62 percent on the whole, and 63 percent in Moscow).
http://rbth.co.uk/news/2015/01/28/russians_perturbed_at_price_rise_ruble_fall_-_poll_43208.html)
OUTLAW 09
01-29-2015, 08:47 AM
$Ruble sinking like Russian submarine Kursk.
Ruble's Slide Resumes on #Ukraine Sanctions Concern as Oil Drops
http://www.bloomberg.com/news/articles/2015-01-28/ruble-s-slide-resumes-on-ukraine-sanctions-concern-as-oil-drops …
OUTLAW 09
01-29-2015, 09:17 AM
Russian Ruble about to hit 69 to the US dollar as oil sinks to a 6-year low.
pic.twitter.com/x74JnAow9s
New EU Sanctions Loom Over #Russia's Struggling Ruble
http://tmt-go.ru/515083
Russians blame the Central Bank, not their government's actions in #Ukraine for the current crisis. #RussianLogic http://www.themoscowtimes.com/opinion/article/did-russia-s-central-bank-kill-the-ruble/514979.html …
Extreme shortages evidently in Moscow:
Fearing sanctions (?), Russia's PACE delegation took light bulbs, toilet paper when they cleared out their offices: http://goo.gl/yodvOv
OUTLAW 09
01-29-2015, 09:38 AM
From Interfax today referencing economy:
12:17 Central Bank pulls AkademRusBank license
12:02 Rosneft requesting 1.3 tln rubles for 28 projects from NWF - ministry (Part 3)
12:00 Investment may decline over 10% in 2015; consumer demand - 7%-9% - Ulyukayev (Part 2)
10:56 Naftogaz suing Gazprom for $6.2 billion for transit reduction, adaptation of contract to EU terms
10:46 Public procurement from "friends and relatives" of high-ranking officials should be stopped - Kremlin official
10:23 GAZPROM MUST SETTLE 390 MLN EURO UNICREDIT LOAN IN 2015 AT EURIBOR PLUS 2.75% - COMPANY
OUTLAW 09
01-29-2015, 10:15 AM
Without China's help, Russia would already be having trouble financing war in Ukraine, @GordonGChang writes:
http://goo.gl/c4GKHC
It is estimated that Russia is spending approximately 20 to 29M USDs per day during the fighting and that since August 2014.
Simple math places the approximate cost since August at well over 3.6B USDs as the low end and 5.4B at the high end.
OUTLAW 09
01-29-2015, 10:32 AM
https://meduza.io/news/2015/01/29/glava-prezidentskoy-administratsii-zapretil-chinovnikam-barstvovat …
Putin’s chief of staff says state corruption & officials mooching off the people is a threat to Russian sovereignty.
Mooching seems to be the new approved Russian term for corruption at the highest levels.
OUTLAW 09
01-29-2015, 10:56 AM
VTB bank buys 400b rubles of Rosneft bonds. Hidden state subsidy for "current expenses," analyst says:
http://goo.gl/K6eeCA
OUTLAW 09
01-30-2015, 11:12 AM
Rubel now appears to be in a death spiral and the end is still not in sight--if a 2% rate reduction caused this much damage.
Russian economy is in deep trouble if a drop of interest rate from a whopping 17% to still extreme 15% makes the Rouble sink like a stone.
Russian central bank cuts interest rates, trying to walk back the body blow it dealt to Russia's economy in December. http://www.wsj.com/articles/bank-of-russia-cuts-interest-rates-1422614890 …
Agence France-Presse ✔ @AFP
#BREAKING Ruble accelerates fall after central bank makes surprise interest rate cut
FT calls cut in interest rates 'a dangerous move by the CBR' - http://www.ft.com/fastft/270382 Result: sharp fall in rouble: http://www.bbc.co.uk/news/business/market_data/currency/12/158238/intraday.stm …
OUTLAW 09
01-30-2015, 11:24 AM
Interfax on the Rubel from today:
13:49 DOLLAR HITS 71 RUBLES, EURO ABOVE 80 FOR FIRST TIME SINCE DECEMBER FOLLOWING DROP IN CBR KEY RATE
13:49 Dollar, euro soar against ruble following unexpected change in Central Bank's key rate
13:47 Central Bank lowers key rate to 15% from 17% pa
13:47 Russian GDP to have annual decline of 3.2% in H1 2015 - Central Bank
12:55 PART OF RUSSIA'S ANTI-CRISIS RESERVE CAN BE USED TO SUPPORT REGIONAL BANKS THAT ISSUE MORTGAGES – SHUVALOV
12:55 Shuvalov: winter crop situation 'challenging' in many regions
12:00 Russian gov't orders ministries to prevent excessive rise in prices for fertilizers, combustibles
OUTLAW 09
01-30-2015, 11:58 AM
RUSSIA NEWS SERVICE @EINRussiaNews
#Russia gives $3 billion Crimea bridge contract to #Putin ally http://s.einnews.com/rskKHi52Be
Rouble tumbling again... last time it was at these levels the CBR felt the need to RAISE rates pic.twitter.com/aFDIpYRxsl
OUTLAW 09
01-30-2015, 02:52 PM
Morgan Stanley predicts 5.6% drop in Ru GDP 2015
http://tass.ru/en/economy/774388 …
The oil crash has wiped $393 billion off energy company balance sheets
http://bloom.bg/1yKuqno
OUTLAW 09
01-31-2015, 09:14 AM
Morgan Stanley has a rather scary prediction for the Russian economy - it's doomed #Russia http://www.businessinsider.com/morgan-stanley-thinks-the-russian-economy-is-doomed-2015-1 …
Putin Fingerprints Seen All Over Surprise Interest-Rate Reversal http://www.bloomberg.com/news/articles/2015-01-30/russian-whiplash-on-rates-roils-market-crying-foul-over-politics …
Why Russia’s grip on Europe’s gas markets is weakening. Russia losing its levers one by one. http://on.wsj.com/1BvJAiu pic.twitter.com/n2LMecmc1t
OUTLAW 09
02-01-2015, 08:17 AM
Russian Nationalist Demands Soviet Exchange Rates to Solve Ruble Crisis. http://www.themoscowtimes.com/business/article/russian-nationalist-demands-soviet-exchange-rates-to-solve-ruble-crisis/515168.html … pic.twitter.com/f7fwwQI9dz
Russian businesses in great trouble, $77 billion foreign corporate debt to pay in 2015. http://www.businessinsider.com/heres-why-russian-businesses-are-in-so-much-trouble-2015-1 … pic.twitter.com/5Yj2B1UG1I
As crisis increases, vodka prices decrease. “@KermlinRussia: Сынок, теперь ты будешь больше пить: pic.twitter.com/DfVCOKx84i
OUTLAW 09
02-02-2015, 12:49 PM
Sberbank starts limiting customer withdrawals from their own accounts.
Today other Russian banks started following the example from Sberbank.
Russische Sberbank limitiert Bargeldauszahlungen. Andere wollen folgen.
OUTLAW 09
02-05-2015, 10:17 AM
#Ruble falls again at #Moscow Exchange: 1USD=68.79RUB, 1EUR=78.12RUB http://zloy-odessit.livejournal.com/1116575.html pic.twitter.com/K19uRNR42b
Krugman adds a fresh macro angle (http://krugman.blogs.nytimes.com/?_r=0) to the debate:
But let’s not talk about Latin America. Instead, let’s talk about Russia. Putin’s thrashing, his evident decision to reject advice from economists who tell him anything he doesn’t want to hear, feel very familiar to me and I’m sure many others who’ve followed Latin America over the decades. Basically, it sounds a lot like good old-fashioned macroeconomic populism.
...
So Putin seems to have brought something new, or at least formerly rare, into the world of economic policy: macroeconomic cronyism, an effort to suspend the laws on economics on behalf, not of the broad populace, but a tiny group of well connected malefactors of great wealth. Innovation!
Obviously the conyism is an old story, but it's mix is a new take on an old fallacy. Perhaps the worst luck for the Russian citzien was that Putin was so lucky with the high commodity prices. Those were of course a massive boost for the Russian economy and helped the country and it's citizens to get high growth and economic stability but it allowed the leader to get credit for poor personal performance and to take the Russian economy far along a dangerous path into the wrong direction...
Number of Western Foreigners in Russia Drops by Half a Million (http://www.themoscowtimes.com/news/article/number-of-western-foreigners-in-russia-drops-by-half-a-million/515456.html).
Note in includes tourists, still it is a very steep drop by any standards.
The total number of Western foreigners in Russia, including tourists, reportedly dropped in January by about half a million year-on-year amid deepening political tensions and a deteriorating domestic economy.
There were 1.23 million Westerners in the country last month, down from 1.73 million in the same month last year, news agency RBC reported Wednesday, citing the Federal Migration Service.
Western workers in Russia have been overall important cogs in the Russian economy, especially with it's interactions with Western companies. For the Russian demographics more important is the 70% crash in the number of non-Western migrant workers. Their immigration has been one of the two big reasons for the slight Russian population growth and have greatly enlarged the labour pool especially for the lower bracket of the job market.
The human dimension (https://www.youtube.com/watch?v=j8X69f2FoxY) of the economic downturn and various new laws help to understand the motivations behind the stark numbers. This should have a considerable impact on the Russian labour market and demographics if the recession is deep and harsher laws remain and get applied.
OUTLAW 09
02-06-2015, 01:42 PM
Russia National Wealth Fund illiquid soon? Moscow Times: http://www.themoscowtimes.com/business/article/russia-s-anti-crisis-national-wealth-fund-an-overview/515524.html … pic.twitter.com/p35lyAO7on
OUTLAW 09
02-08-2015, 01:07 PM
Oops! Russia's foreign trade with China fell by 36,4% in January 2015 http://tass.ru/ekonomika/1752527 … Turning East seems not going well either
OUTLAW 09
02-16-2015, 12:17 PM
#Russian bank “Sudostroitelny” with 20 million of individual deposits went bankrupt. Sign of things to come? http://www.gazeta.ru/business/2015/02/16/6413969.shtml …
Oil had a big rally (http://www.bloomberg.com/news/articles/2015-02-16/crude-oil-bears-betting-on-supply-glut-miss-market-rally-energy) recently. As I pointed out earlier the commodity markets and especially oil are liable to big swings which are in my humble opinion impossible to anticipate. Obviously the oil prices are still far too low to balance the Russian budget but every period of less low prices helps financially. Overall it is certainly a shame that a large European country like Russia is to such an extent dependable on the situation on the commodity markets.
'Putin Has Stolen Hundreds of Billions of Russia's Wealth' (http://www.themoscowtimes.com/business/article/browder-putin-has-stolen-hundreds-of-billions-of-russia-s-wealth/515988.html) is not a new accusation by any means. Still it makes for an interesting interview.
"Some people, including myself, believe that he's the richest man in the world, or one of the richest men in the world, with hundreds of billions of dollars of wealth that was stolen from Russia," said Browder, whose company was once Russia's largest foreign investor
OUTLAW 09
02-25-2015, 05:06 PM
Russia calls in $1.16m Soviet-era debt from Nepal. Signs it's starting to hurt
http://www.minfin.ru/ru/press-center/?id_4=33101 …
Russia's insider traders know Putin's plans http://www.bloombergview.com/articles/2015-02-25/russia-s-insider-traders-know-putin-s-plans …
Russian consumption of meat dips for the first time in 10 years. http://slon.ru/fast/economics/potreblenie-myasa-i-ptitsy-v-rossii-upadet-vpervye-za-10-let-1219268.xhtml …
Russia in Free Fall
by Anders Aslund, Peterson Institute for International Economics
Op-ed in Capital
February 25, 2015
Since November 2014, it has been obvious that the Russian economy would shrink sharply this year, and the January statistics indicate a serious decline has started. The Russian Ministry of Economic Development has forecast a decline of GDP of 3 percent this year, while the Central Bank of Russia predicts a decline of 4.5 to 5 percent at an oil price of $50 per barrel. These forecasts appear overly optimistic. An abrupt fall of 10 percent seems more likely, because key Russian indicators look worse than in 2009, when Russia's GDP contracted by 8 percent.
In July 2014, the United States and the European Union imposed serious financial sanctions on Russia. In parallel, the global oil price started falling and with it the ruble. As if these factors were not bad enough, the Kremlin is pursuing an economic policy that aggravates the decline.
http://piie.com/publications/opeds/oped.cfm?ResearchID=2756
It will be rather interesting to see how, how much and how quickly Russia continues to spend it's funds like the NWF. Aslund does seem to support an old opion of mine, that Putin thinks that he knows how to handle the current crisis because he could deal with the big recession and Georgia. However Ukraine is not Georgia and the economic crisis of 14/15 is not 08/09 (nor 1998 for that matter).
Naturally, Putin is reacting against this blow, but his reactions are not the least reassuring. His bottom line is that he knows how to handle crisis because he did so in 2008–09. That is true, but none of the G-20 leaders did so worse than Putin, and now he wants to repeat his failure. His flawed idea then was to pour money into state corporations and his cronies, and they have grown even worse in recent years. Then, Putin wasted $200 billion on his flawed bailouts. Now, he can only afford $38 billion on his anti-crisis program, which will not make any difference, which is perhaps the best one can say about it.
All in all Putin does so far a fine job at squeezing the Russin economy and he is coming closer to the breaking point. We will see things develop. Lots of variables involved with commodity prices not the least ones.
OUTLAW 09
03-04-2015, 09:35 AM
Gazprom Neft Reports Massive Quarterly Loss After Ruble, Crude Plunge http://www.bloomberg.com/news/articles/2015-03-02/gazprom-neft-reports-quarterly-loss-after-ruble-crude-plunge …
Will oil prices double dip and hit a new low at $30? http://oilprice.com/Energy/Oil-Prices/Could-Oil-Prices-Plummet-A-Second-Time.html … pic.twitter.com/BV7MkrVmi1
Economy Min says Russia's 'anti-sanctions' fueled unprecedented food-price rises in Jan: +22.1% for fruits/vegetables
Squeezed? 45% of Russians say directly affected by sanctions now, up from 5% in Aug (50% not affected, vs 92% in Aug) http://wciom.ru/index.php?id=459&uid=115168 …
OUTLAW 09
03-14-2015, 05:23 PM
Selling the Family Jewels by Stephen Blank http://www.interpretermag.com/selling-the-family-jewels/ … - Russia selling off assets to China
The ruble recovered in recent months considerable against the USD and obviously more so against the Euro which push against inflation. Much depends of course on the commodity prices, especially oil and the depth of the Russian recession.
The state is under increasing pressure to act as the lender or equity injector of the last resort (http://www.themoscowtimes.com/business/article/russia-to-subsidize-struggling-carmakers-with-166-million/517755.html) for the many businesses just above water.
Russia will provide carmakers with 10 billion rubles ($166 million) in subsidies, the government said Thursday, in a bid to support an industry struggling to cope with the country's economic downturn.
However, the industry is only expected to return to growth in 2016 and is therefore likely to need more government support than the measures announced on Thursday.
Of course it was easy to predict that due to the high foreign portion of the value chain costs would be driven up by the ruble rout. Factor in the expected contraction of demand and it becomes quite a problem...
In addition to lower sales car producers have seen their margins fall by 10 to 15 percent as a result of the ruble weakening, which has increased the cost of imported components, as well as higher metals prices, the government said on its website.
OUTLAW 09
03-21-2015, 07:03 AM
Serbank CEO stated yesterday that over 45% of all Russian banks will be facing serious financial difficulties within the next four months. the finance sector is facing some serious and major issues and there seems on answers.
Then this yesterday as well:
Russian central bank: 1/5 banks experiencing difficulties. 2/3 banks will account for a loss, end of 1st quarter. http://top.rbc.ru/finances/20/03/2015/550bfaaa9a79471b923eaa6c …
OUTLAW 09
03-23-2015, 01:19 PM
Russians who have bank accounts in UK receiving requests from UK authorities to prove the origin of deposited funds. http://www.interfax.ru/business/431556
Russian Central Bank claiming the UK is trying to prevent the return of funds back to Russian under the new Russian Tax/Fines Amnesty Law.
OUTLAW 09
03-23-2015, 06:11 PM
Siluanov: if the budget deficit not reduced the entire emergency Reserve Fund will be spent & Russia will have to start printing money
Russian railways chief Yakunin says Russia can overcome neoliberal, Western-style economics by....building railroads http://siberiantimes.com/business/investment/news/n0160-plans-for-new-transport-route-unveiled-to-link-pacific-with-atlantic/ …
Russian Cheese production (http://www.themoscowtimes.com/business/article/russian-cheese-production-surges-30-after-ban-on-western-imports/521891.html) surged 30% in the first four months of the year after sanctions against the West, well ahead of meat, chicken and fish. Of course it is worth to point out that the changes were more extreme for the categories with smaller tonnage. It is also no suprise that ramping up cheese production is easier then to catch (besides the fish farming) even if less milk was produced...
According to the FAO, in 2005 the Russian fishing industry harvested 3,190,946 tonnes of fish from wild fisheries and another 114,752 tonnes from aquaculture. This made Russia the ninth leading producer of fish, with 2.3 percent of the world total.[4] Source:Wiki
All in all, inflation hit pretty hard:
Combined with a steep devaluation of the ruble currency late last year, Moscow's ban on Western food imports spurred year-on-year food price inflation to 23.7 percent in the first quarter of the year, according to Rosstat.
------
I often wrote about the deeper long-term damage inflicted by Putin's war and the tensions and sanctions between Russia with it's receding economy. Western technology and expertise, key in many areas, will be harder to access and use.
Import substitution is one of them (http://www.themoscowtimes.com/business/article/import-substitution-to-cost-russia-50-billion/521892.html), be in pharma or ships (http://www.themoscowtimes.com/business/article/sanctions-force-russia-to-abandon-next-gen-warship-construction-plans/521911.html)
Despite the incentives for Russian business to substitute the industrial output (http://www.themoscowtimes.com/business/article/russian-industrial-output-plunges-45-in-april/521923.html) has fallen. The latest month seems a bit on the high side, maybe a bit too much noise. Overall this points to a deeper crisis, especially if the budget cuts will be harsh.
Sergei Guriev explains "Political Origins and Implications of the Economic Crisis in Russia"
This simple fact pinpoints a very intuitive explanation for the slowdown: Russia is no longer attractive for investors, neither foreign nor Russian. This explanation is also consistent with the fact that Russia experienced a net capital outflow of 3 percent of its GDP in 2012 and 2013. Also, Russian stocks were traded at about a 50 percent discount to other emerging markets even before Crimea.
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The investors are leaving Russia for a very simple reason: Russia’s investment climate (the rule of law and protection of investors’ rights) is very poor—at least relative to competing capital destinations. For a high-income, urbanized, and educated country, Russia is unusually corrupt.
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Rule of law and fighting corruption constrain the elite’s ability to extract rents from the economy and, thus, to hold on to power. Although these reforms are likely to result in faster GDP growth and prosperity for the whole country, they will reduce the incumbent elite’s ability to enjoy this prosperity.
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This problem is the key explanation of the Russian elite’s pref- erence for the status quo. The elite chooses to avoid institutional reforms that may raise the probability of political transition. More- over, high oil prices, and therefore substantial resource rents, further increase aversion to reforms by making incentives for staying in con- trol even higher.
The situation is therefore very close to the Brezhnevist zastoi (lit- erally, “stagnation”), the last period of Soviet history when high oil prices resulted in a lack of economic dynamism in the Soviet Union. Important economic reforms were delayed, economic growth dis- appeared, and once oil prices went down in the mid-1980s—the Soviet Union went bankrupt and disintegrated.
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The Crimean adventure has shown the world that Russia’s eco- nomic development and its integration into the global economy are a second-order priority for the Russian elite and can certainly be sac- rificed if the regime feels threatened. In the long run, this will under- mine investor confidence and remove the plausibility of restoring economic growth in Russia. Russian economic performance may still temporarily improve—for example, in the form of another oil price surge. However, long-term economic growth is unlikely to return, at least until a political transition takes place.
Sergei Guriev is a professor of economics at Sciences Po, Paris. From 2004 to 2013, he was a tenured professor of economics and rector of the New Economic School in Moscow. In 1997–98, Guriev vis- ited the Department of Economics at the Massachusetts Institute of Technology for a one-year postdoctoral placement, and in 2003–04, he worked in the Department of Economics at Princeton University as a visiting assistant professor.
https://www.aei.org/wp-content/uploads/2015/05/Putins-Russia.pdf#page=27
Russian author of Four Russias concept Natalia Zubarevich, who expressed her thought in AEI book already mentioned comments situation in Russian regions.
Four Russias and a New Political Reality
NATALIA ZUBAREVICH
https://www.aei.org/wp-content/uploads/2015/05/Putins-Russia.pdf#page=27
Paul Goble. Staunton, June 11 – Novgorod oblast was technically in default earlier this year because of poor management and because Moscow paid the region what it owed a month after debt payments became due, Natalya Zubarevich says, but she suggests that there won’t be series of defaults. What there will be is something worse – the destabilization of finances at that level.
This means, the director of regional programs at the Moscow Independent Institute of Social Policy, that there will be something “worse than default,” a situation in which regional governments will have to impose draconian cutbacks in health, education and housing and the population will suffer
And it can be summed up this way, Zubarevich says: Earlier, budgets were balanced by money from the center. Now, however, the regions have had to cut social spending: “26 regions without taking inflation into account have cut spending on education, 21 on health care, and 16 on social policies. If the figures are adjusted for inflation, these numbers would be much higher.
http://windowoneurasia2.blogspot.be/2015/06/financial-instability-in-russias.html
I think that Guriev points into the right direction, althought the future is generally rather difficult to predict. Lots of brainpower has certainly left Russia as it has become a far less attractive place to do business.
I found the latest Guardian article rather interesting (http://www.theguardian.com/cities/2015/jun/08/why-migrants-fleeing-moscow-permits-economy):
Irina Rodionova, a manager at a cleaning business that has contracts with a number of shopping centres, said 30% to 40% of the company’s labour needs are unmet because lots of Kyrgyz and Uzbeks have left. In a bid to find more workers, it recently raised salaries from 15,000 to 20,000 roubles a month for men and from 12,500 to 17,500 roubles a month for women. “With the smaller salary, we couldn’t find anyone,” she said.
The food price shock should hit those generally the hardest. Stioll clearly the Russian economy is still far better then in the countries mentioned, including Ukraine:
“If America was next door, [migrants] would all leave,” Karimov said. “But what’s next door is Ukraine, Uzbekistan, Tajikistan, where the level of living is lower and there are no jobs. There’s nowhere to go.” Says Vladimir Anandiyev, 24, from Kirovohrad, Ukraine, who worked with his twin brother Vitaly at a construction materials store for four years until it cut wages and laid off staff this year: “[In Ukraine] you need to search for work, and even if you do find it, it will pay a low salary. Here, it’s bad. But there, it’s critical.”
Capital controls, what capital controls? The Russian Minister of Economic Development says njet (http://video.cnbc.com/gallery/?video=3000264018), at least he has now plans. Of course he wouldn't say so, wouldn't he? Capital controls are that kind of stuff you want to blitz the markets with. :wry:
As long as investors have to fear heavy economic sanctions and Russian reactions it is difficult to see how we don't end up north of a $ 150bn - in a $ 2000bn GDP economy. As some have already pointed out in this thread the key Russian figures are almost singing sweet songs now to foreign investors after rather gross initial reactions from the Duma floor. A couple of smart guys must have told them what was already clear in the first pages of the thread - if Russia hits foreign investors hard it cuts much deeper into it's own flesh...
It may be seen as a very unfair advantage of Western economic power, but a huge advantage it still is.
1) We know that Russian already imposed (http://www.reuters.com/article/2014/12/23/us-russia-crisis-rouble-idUSKBN0K10KD20141223) informal capital controls.
As Putin Stalls on Economic Reforms, Investors' Frustration Grows (http://www.themoscowtimes.com/business/article/as-putin-stalls-on-economic-reforms-investors-frustration-grows/524301.html) sums up many feelings about the Russian economy.
2) Actually I wasn't that bad with the estimate I made a year ago:
But the ruble is down by more than a third against the U.S. dollar compared to before the crisis in Ukraine, capital flight was more than $151 billion in 2014 and the Central Bank expects the economy to decline 3.2 percent this year.
3) At least by now it should be obvious that Putin hit Russia far harder with his 'counter'-sanctions then the West.
Point three was certainly the easiest score, the second one was an educated guess and point one was a clever move by the Bank of Russia which had obviously, as it was it's job, prepared for a spectrum of capital controls.
4) I also predicted very early a Russian recession for the right reasons even if I was supported by events I didn't see coming like the oil crash.
5) I saw a longer term conflict coming pretty quickly after the Russian invasion of Crimea.
It is very hard to see how the Russian government can avoid a (deep) recession if the crisis continues for (months) weeks. Lots of shocks hitting the economy at the same time just as the monetary policy is forced to move into the wrong direction and fiscal policy will very likely be quite costly to finance...
Now I will go through some of the older stuff to check for stuff I did get wrong, which should be also a good deal :)
1) I didn't expect outright Crimean annexation by Russia.
2) I also didn't think Putin would be as 'stupid' to invade the Donbas.
3) I underestimated the extent of the Russian inflation, even if I was on the high side compared to official Russian ones.
4) I didn't saw the oil crash coming.
5) The Bank of Russia suprised me with some of their actions which were obviously aimed at some market participants.
Such political decisions tend to be (far) harder to anticipate compared to a good deal of the economic trends. The same goes for timing on the stock market. While I outperformed it by a double-digit large margin in the last two years I firmly convinced that nobody can know what it will do in the short run.
A nice update (http://www.bloombergview.com/articles/2015-07-29/russia-can-t-help-being-a-gold-bug) on the current state of Russia's gold reserves.
http://assets.bwbx.io/images/iHcJ4QJOwwEE/v1/-1x-1.jpg
Posted those earlier:
http://goldminersreport.com/wp-content/uploads/2013/11/Russian_Official_Gold_Holdings_2006_to_2013.png
http://goldsilverworlds.com/wp-content/uploads/2014/03/gold_price_2006_2014.gif
Interesting to see that the stop their sell-off of US securities:
According to the U.S. Treasury, after keeping its investment below $70 billion in February, March and April, the Russian central bank increased it to $70.6 billion in May. Yet gold purchases continue. After a hiatus in January and February, the central bank acquired almost 2.2 million ounces over the next four months.
If they can handle the liquidity side of the problem the recent purchases might prove to be a pretty smart decision in the mid term - or not. I'm far from a Gold bug but who knows where the price will go in the next years. In any case the lower oil prices are a far bigger problem...
Russia: Gazprom, a Behemoth No More (http://www.eurasianet.org/node/74501) tracks the fall of Putin's favorite geopolitical weapons. Indeed it was never a normal company, a mystery inside an engima which certainly didn't focus on increasing the value for it's shareholders. From the heights of 2008 and predictions of a trillion $ market value it has shrunk to a 1/7, trading at somewhat over 50 billion $.
When it comes to Gazprom’s commitments to Chinese exports, the news for the company may not be much better. Initially, when the $400-billion, 30-year deal was announced in May 2014, it was widely seen as a major geopolitical victory for Putin and Russia. But details of the agreement remain a secret, suggesting that there is little good news for Gazprom in it. The limited information that has emerged supports this assumption.
Lots of interesting bits in that articles with many links to follow. Maybe I will take a closer look at it's financial reports. The price seems really low even if the recent sanction troubles of one offshore gas field reinforce the political risk but sometimes the market get it wrong.
Overall the Russian economy is like it's former giant in bad shape and it is difficult to find positive signs.
Fortune has also covered Gazprom (http://fortune.com/2015/04/29/gazprom-pays-a-high-price-for-putins-ukrainian-adventure/):
The bigger, and chronic, problem is that the company is having to service those debts from a narrowing sales base: the 444.9 billion cubic meters (15.7 trillion cubic feet) that it produced last year was down 9% on the year, the lowest in its two decades as a joint-stock company, and nearly a third below what it was producing a decade ago. European customers cut their demand by 15 billion cubic meters last year, or 8.5%, while sales to the former USSR (mostly Ukraine) fell by 19%, or over 10 bcm. It’s no exaggeration to say that they will prefer any alternative source of gas (except maybe the shale under their own feet) to Gazprom’s as long as economics will allow them to.
Ulenspiegel
08-09-2015, 04:04 PM
"European customers cut their demand by 15 billion cubic meters last year, or 8.5%, while sales to the former USSR (mostly Ukraine) fell by 19%, or over 10 bcm. It’s no exaggeration to say that they will prefer any alternative source of gas (except maybe the shale under their own feet) to Gazprom’s as long as economics will allow them to."
That is much too simple. Primary energy esp. NG demand is determined by weather in central Europe, around 45% of the German imports are used for room heating, 45% for industrial process heat and <10% for generation of electricity.
2014 was a very warm year, therefore, demand for heating fuels was low, first six months of 2015 were much colder and as a result NG consumption was higher (IIRC ~3%) than first six monts of last year.
The second aspect is that there is a huge excess capacity of coal fired power plants in Europe (as a result of the German energiewende and economic crisis), which provide cheap alternatives in the fields of electricty generation and CHP, NG lost around 30% of its share in the German electricity market after 2010. This happened without any changes of the German energy policy, the European picture is very similar.
At least in Germany we do not see a shift from Russian sources to others, instead a general reduction of demand and it is a save bet that this development will continue as new buildings have a much lower energy demand than older ones. The long term perspective is IMHO a 1% annual demand reduction.
On the plus side for Gazprom is the fact that domestic European production of NG is decreasing and LNG is more expensive than Russian NG delivered by pipelines.
I pretty much agree with your points, the main thrust of the post was the great fall of Gazprom which executives once talked about a trillion market value to a mere 1/15th of such ambitions...
It is important to keep some key facts in one's mind when discussing this topic:
1) European demand and Russian supply are natural matches dictated by geography. Commodities have gone west and technology and products east for similar reasons for hundreds of years.
2) When it comes to NG both sides are tied tightly together by pipelines and nearness as the product's global market is highly fragmented due to it's particular properties and existing infrastructure.
The paper "The Impact of Lower Gas and Oil Prices on Global Gas and LNG Markets" (http://www.oxfordenergy.org/wpcms/wp-content/uploads/2015/07/NG-99.pdf) offers are global perspective on the said issues. Interestingly is the remark about Gazprom:
Through quantitative scenario analysis, the paper explores the major uncertainties in the global gas system connected by flexible LNG to 2030. The lack of clarity on Russia’s future preferred commercial behaviour however, adds a level of complexity most market participants would prefer to ignore. Gazprom is occupied on many fronts in both political and commercial spheres. At some point however the need to adopt a more market-oriented strategy is likely to rise on its list of priorities. While the timing of this is at present uncertain, the conclusions of this paper would strongly suggest that this is a development that players in the wider LNG-connected global system should be closely monitoring.
Personally I think the lower demand projections makes are more likely for Europe, maybe still a bit overestimated.
3) The liquid in LNG comes at a substantial price which makes it's import only attractive under special circumstances as extremely low (US) prices or ridiculous (Russian) behaviour. Asia seems right now considerably more attractive for US exports then Europe.
Putin's Gazprom must be quite careful not to push European costumers not too hard to avoid big incentives for various investments in infrastructure to handle LNG, store NG or better link the European pipelines.
http://ec.europa.eu/eurostat/statistics-explained/images/8/81/Gross_electricity_generation_by_fuel%2C_GWh%2C_EU-28%2C_1990-2013.png
Gross electricity generation by fuel, GWh, EU-28, 1990-2013.png
4) Coal and gas power dying out in Europe (http://www.ft.com/cms/s/0/c8a17956-ff12-11e4-8dd4-00144feabdc0.html#axzz3ij0TKq1N) is a tad dramatic for my taste but investment is certainly increasingly flowing towards renewables. The energy demand for room heating should indeed slowly fall for various reasons. We discussed the role of energy consumotion in the energy security thread.
http://ec.europa.eu/eurostat/statistics-explained/images/b/b4/Derived_heat_generation_by_fuel%2C_TJ%2C_EU-28%2C_1990-2013.png
Derived heat generation by fuel, TJ, EU-28, 1990-2013.png
I will have to leave it there for today. Overall the picture is not bright for Gazprom and Russia but we won't see a drastic shift away from Russian fossil fuel supplies in particular if nothing stupid happens.
OUTLAW 09
08-14-2015, 06:20 PM
http://euromaidanpress.com/2015/08/14/russian-perfect-storm-oil-at-25-ruble-at-125-inflation-at-30/
Russian “perfect storm”: oil at $25, ruble at 125, inflation at 30%
2015/08/14 • Russia
Vladislav Zhukovsky, an economist known for predicting disasters in the Russian economy and for then turning out to be right, says that the situation is more dire than almost anyone imagines because oil is heading to 25 US dollars a barrel, the ruble to 125 to the US dollar, and inflation to 30 percent.
He attracted widespread attention earlier this week for an appearance on RBK, but the analyst for the Rikom Group gave more detailed answers to the URA.ru news agency. If he is even partially correct, Russia faces not a “black Monday” or a “black September” but a “black” and bleak future.
Indeed, Zhukovsky argues, the combination of falling oil prices, the collapse of the ruble exchange rate, and rising inflation means that Russia is entering what might be described as “a perfect storm,” one with the capacity to destroy much of the country’s economy this year and next.
And this situation is made worse by the fact that many at the top of the Russian economic pyramid are behaving as they did in 1998, betting on an ever weaker ruble by buying hard currency and then planning to get back into the Russian market later at firesale prices and thus improving their position but not the country’s.
These people, Zhukovsky says, “have their families, portfolios and property abroad. They are interested in having the situation in Russia be as bad as possible and the ruble to fall as far as possible so that they will be able to sell their apartments there and buy them here on the cheap.”
In 1998, at the time of defauls, the Russian stock market fell 80 percent, the ruble fell 84 percent, “and all our bureaucrats … took the money they had and converted it into hard currency. “When the market collapsed, they bought shares at three cents on the dollar. The very same thing is happening now.”
Moreover, Zhukovsky adds, after the coming collapse “the American, European or Chinese investors will come.” They too will take advantage of the low prices just as they did in 1992 and 1993
Unless the government changes course, the ruble has no prospects even at the current price of oil, and oil prices are going to continue to fall, the economist says. Eleven of Russia’s 14 oil processing firms are now operating at a deficit; and consequently, “what we see today is just the quiet before a very strong storm.”
Russian officials are in denial about all of this, and their projections are not predictions of the usual kind: they are issued only to convince people that things will somehow turn out all right. The numbers don’t lie, but officials do. None of their predictions about the ruble exchange rate, prices for oil and inflation have ever been confirmed by events.
The Russian economy has not reached its bottom, he says; indeed, it doesn’t have one “because the economy has no limited given that it is in a state of disintegration and is constructed on crude aligarchic raw materials capital.” Thus the ruble could fall to 75 to the dollar by the end of the year and more than 125 per dollar sometime in 2016.
Even if oil prices were to rise to 70 dollars a barrel, that would not be enough to prevent a further decline in the Russian economy. And given that the actual price will be much lower, that decline will be very steep indeed. As prices fall to 40 dollars a barrel, Zhukovsky says, Rsusia will discover “a third bottom” and then “a fourth” and so on.
Russians need to recognize that the low oil prices are not the product of “a conspiracy of the US and the Arabs against Russia.” Instead, they are the result of an Arab effort to drive down the price so that the latest technological innovations in extraction technology the Americans have will not be profitable.
Russia isn’t part of the equation for either, Zhukovsky says, but this also means, the basic trend won’t change anytime soon. Moreover, if Russia sits and does not make fundamental change, the new oil extraction technologies
I think I have said many times I have no idea where oil prices will be in a couple of months and the last year has proven it to me many times. They might hit 25$ or not, the ruble might roll to 125 or not and the inflation might reach new heights or not but something has become even clearer: The current Russian economy is largely built on the export of commodities throught which it funds it's large public sector and social expenditures.
Today the markets accelerated their sell-off and among the hardest hit was anything linked with commodities, indeed the specific Bloomberg index fell to a 16 year low (http://www.bloomberg.com/news/articles/2015-08-24/bloomberg-commodity-index-slides-to-lowest-level-in-16-years):
The Bloomberg Commodity Index of 22 raw materials from oil to metals lost as much as 3 percent to 85.1752, the lowest level since August 1999. Shares in miners and explorers including Glencore Plc, BHP Billiton Ltd. and Exxon Mobil Corp. tumbled while Brent crude fell below $45 a barrel for the first time since 2009.
If prices remain relatively low and the political climate bad the Russian economy will be in terrific trouble and reveal ever more just how much of it's relative success was due to influx of mostly Western capital, know-how and technology.
The IMF Country Report No. 15/211 (https://www.imf.org/external/pubs/ft/scr/2015/cr15211.pdf) offers a wealth of information with the graphic galore starting around page 22.
Medium-term policy challenges. An ambitious and credible medium-term fiscal consolidation program is necessary to adjust to lower oil prices. Changes to the fiscal rule should be considered to support medium-term fiscal sustainability. Boosting potential growth will require implementation of structural reforms. This would include (i) strengthening governance and protection of property rights; (ii) lowering administrative barriers and regulation; (iii) increasing competition in domestic markets; (iv) enhancing customs administration and reducing trade barriers; and (v) improving the transparency and efficiency of public investment procedures.
Reinvigorating the privatization agenda, as soon as market conditions permit, would enhance economic efficiency. A deeper and more efficient financial system would improve the allocation of capital thereby enhancing economic growth.
I confess I had to chuckle going from (i) to (iv)...
Bruegel's report The systemic roots of Russia’s recession
http://bruegel.org/2015/10/the-systemic-roots-of-russias-recession/
Bruegel's report The systemic roots of Russia’s recession
http://bruegel.org/2015/10/the-systemic-roots-of-russias-recession/
Good catch as it sums them up neatly.
mirhond
11-09-2015, 10:42 PM
https://www.opendemocracy.net/sean-guillory/ukraine-is-ripe-for-shock-doctrine
While a crisis of faith, of sorts, has resounded in western discourse on the economic effectiveness of austerity, this scepticism, rather ironically, dissipates when you cross over into the remnants of the Iron Curtain.
Neoliberalism’s flagellants reside east of the Elbe. There, ideological purity remains, if not redoubled. Former patients of shock therapy are now its most devoted converts. This was not only demonstrated by Estonian, Latvian, Lithuanian, Slovak, and Polish officials’ unyielding support for ‘tough reforms’ in Greece, but the general lack of sympathy among their populations for the Greek people. Past shock therapies have left them numb, docile, and inured to the calamities of neoliberal logics.
The neoliberal faith is expanding further eastward as well. The Ukrainian leadership have shown their unbridled readiness to exchange one master, Russia, for another: western finance and corporate capital. Even in light of the Troika’s ‘fiscal waterboarding’ of Greece and the utter failure of austerity as economic policy, the Ukrainian government is willing, even enthusiastic, to implement reforms prescribed by the IMF not only with the blind faith that they will stimulate economic recovery, but also in the name of ‘European values’, which are now subject to much scrutiny.
mirhond, if you don't live in "gas station", then you have to drag yourself out from the "end of golden age" somehow. Show me the other way than neoliberal. State railways fallen king turned academics (after ambassador episode ;) Yakunin has shown his way https://www.project-syndicate.org/commentary/are-sanctions-helping-russia-by-richard-a--werner-and-vladimir-i--yakunin-2015-10 This is also theory at the moment. In Russia there is another professor called presidential advisor Sergei Glazyev. His solution to revival of Russia and Eurasian project is working in Ukraine at the moment.
mirhond
11-10-2015, 07:17 PM
mirhond, if you don't live in "gas station", then you have to drag yourself out from the "end of golden age" somehow. Show me the other way than neoliberal.
Your faith is strong and steadfast, I see, Thatcher bless you and Reagan smiles on you :D
mirhond, show me the working alternative and I'm glad. After reading this discussion even Russia's own bright heads can't see it.
И все же: сколько понадобится снова времени, чтобы слезть с волны самодержавия и несвободы?
Гуриев: Я остаюсь оптимистом — все будет нормально, но не в ближайшие несколько лет. Завтра будет хуже, чем сегодня, но послезавтра будет совсем хорошо.
Аузан: Я думаю, что при нашей жизни начнутся изменения, но это будет очень длительный процесс. В России были только одни длинные реформы — реформы царя Александра II. Вот я бы очень хотел, чтобы мы опять вошли в длинную волну реформ. Потому что с короткой волной мы все время будем повторять одну и ту же картинку. Если мы это сделаем, то шанс на успех — 10–12%, если ничего не будем делать — ноль.
http://www.newtimes.ru/articles/detail/103328
mirhond, it seems you share the thoughts mentioned here.
One of the main conclusions of the workshop is that political liberalism as an ideology and as a political thought in Russia has been largely discredited. Western countries and international organizations have probably underestimated the trauma of the collapse of the Soviet Union, which instilled in a significant part of the Russian public a distrust toward liberalism, there understood as an ideological justification to destroy the Soviet Welfare state. This disqualification of political liberalism, associated by the Russian public opinion with neoliberal economic practices responsible for huge socioeconomic inequalities, contributes largely, today, to the call within Russia for a return to a Great Power status.
We need to remember that a large part of the Russian society has been calling for Russia’s international prestige and a comeback to some Soviet practices and conservative values since the early 1990s – with the electoral successes of the Communist Party for instance – long before “greatpowerness” and conservatism became the flagship of Putin’s third mandate. Indeed, for part of the public opinion, Russia’s greatpowerness is synonym for a strong state domestically, capable of reinstating a paternalistic social-economic order.
http://www.resetdoc.org/story/00000022596
mirhond
11-18-2015, 02:55 PM
mirhond, show me the working alternative and I'm glad. After reading this discussion even Russia's own bright heads can't see it.
http://www.newtimes.ru/articles/detail/103328
You know, I almost always laugh when venerable economists talk about history: for many of them the real world is a subcase of some crackpot economic theory, they really don't bother with facts and data. But thanks, anyway, I'll put this in my collection.
mirhond, it seems you share the thoughts mentioned here.
We need to remember that a large part of the Russian society has been calling for Russia’s international prestige and a comeback to some Soviet practices and conservative values since the early 1990s – with the electoral successes of the Communist Party for instance – long before “greatpowerness” and conservatism became the flagship of Putin’s third mandate. Indeed, for part of the public opinion, Russia’s greatpowerness is synonym for a strong state domestically, capable of reinstating a paternalistic social-economic order.
http://www.resetdoc.org/story/00000022596
Captain Obvious rescued us again, but this stuff does not belong to this thread, actually. Copy this to the relevant thread, please.
davidbfpo
11-18-2015, 04:37 PM
From Mirhond:
Captain Obvious rescued us again, but this stuff does not belong to this thread, actually. Copy this to the relevant thread, please.
Posts 627-632 have been copied from the Ukraine (non-military) thread as they belong here.
With Russia's Economy, Talk Is Cheap (Op-Ed) (http://www.themoscowtimes.com/opinion/article/with-russias-economy-talk-is-cheap-op-ed/540320.html) by Mark Adomanis.
Some Russian analysts have spoken of the "war between the television and the refrigerator," a pithy way to describe an escalating clash between a politicized propaganda narrative in which Russia is "rising from its knees" and an increasingly bleak economic reality in which inflation, shortages, and recession loom ever larger.
In terms of what Western Russian analysts should pay attention to I would rephrase this slightly as the fight between Sputnik (a state-run news agency) and Rosstat (the state statistics service).
I found I also increasingly useful to ignore a lot of the output which was designed to be noise and look at the research articles and statistics. Maybe the best frame for thought was actually the old Collapse of an Empire: Lessons for Modern Russia (http://www.amazon.de/Collapse-Empire-Lessons-Modern-Russia/dp/0815731140). Mark Thoma once joked (http://economistsview.typepad.com/economistsview/2011/04/re-kindleberger.html) that new economic thinking means reading old books. In this case it worked surprisingly well.
As always, reality has exceedingly little regard for abstract ideological notions.
Great quote that.
Return of Russia's economic rollercoaster (http://www.dw.com/en/return-of-russias-economic-rollercoaster/a-18951127):
His son is a captain in the fire brigade. His salary was 60,000 rubles a month but he had told his father that the ministry in charge of the emergency services had just announced to its employees that their salaries would be slashed to 15,000 a month - around 190 euros.
In February the government announced its members would take a 10-percent cut from their 250,000 ruble a month pay packets, but this goes far beyond that.
"I'm so mad I just want to punch the minister in the face," the driver said, wondering how on earth his family would survive.
I guess the author means by 15,000 and not to 15,000. However the follow snippet tells an even worse story:
Tough times
On hearing this we rang a friend who works for the fire department, albeit at a lower rank. His story was worse. He hadn't been paid for December. He won't be paid in January and said he'd be lucky if he was paid in February - and if he is, it won't be at his usual rate.
Russian Cinema Attendance during New Year was down 30% (http://www.themoscowtimes.com/business/article/russian-cinema-attendance-during-new-year-down-30/555573.html), so the great wage decline of 2015 (http://www.bloomberg.com/news/articles/2015-11-19/russia-sees-biggest-decline-in-wages-retail-sales-since-1999) did take its toll also there.
There is also an interesting bit about the flight of capital, which was a big topic in this thread and with $150 billion a big flow in 2014:
A few months back staff at airports actively started asking if passengers were carrying cash out of the country since amounts above $10,000 must be declared. The last time they asked me, my reply was simple: "Unfortunately not," but the border guard said I'd be surprised how many people were carrying bags of cash in their hand luggage.
Two worthwhile updates by Mark Adomanis (http://www.forbes.com/sites/markadomanis/2015/12/22/dont-look-now-but-russias-banking-system-is-still-a-mess/), including a neat chart:
Please note that all of the above concerns domestic, ruble-denominated debt. Foreign currency debt gets most of the attention in the press, there’s been a long series of articles about how the ruble’s collapse would lead to the bankruptcy and general ruin of the Russian corporate sector, but in absolute terms it is a relatively small part of the picture.
http://blogs-images.forbes.com/markadomanis/files/2015/12/TotalLoansOverdue.png
As of November 2015, even with the ruble’s nosedive past 70 per dollar, the total amount of delinquent foreign currency debt was about 17% the size of overdue ruble-denominated debt. That is to say that, by itself, the Russian construction sector now has more overdue loans than the overdue foreign currency debt of all Russian companies in all sectors. That, to put it mildly, is a problem.
A good update on the Russian construction sector (http://www.forbes.com/sites/markadomanis/2016/01/11/moscow-just-set-a-record-for-residential-construction-is-a-housing-bust-on-the-way/)
None of this means that “Russia is doomed” or that we’re on the precipice of a societal collapse. Housing is relatively modest as an overall share of Russian GDP, and “over-investment” in real estate has never approached the crazy scale seen in places like Spain or China. A housing bust would be painful, especially for developers, but it wouldn’t be fatal.
Nonetheless, housing was one of the few brights spots in the Russian economy. Continued high output in the construction sector helped prevent unemployment from heading even higher or the recession from being even deeper. During 2016, that is going to change.
Crude crashing below $30 per barrel (http://www.bloomberg.com/news/articles/2016-01-12/wti-oil-falls-below-30-for-first-time-since-dec-2003), even if softened by the correlated ruble fall, is of course bad news for the Russian budget. I don't know where the oil price be in a couple of months or years but every month of such low prices hurts the Russian economy badly.
Two charts to keep in mind before going into the interview with the Russian Finance Minister:
http://assets.bwbx.io/images/i5DNX_CQP.mc/v3/-1x-1.png
http://assets.bwbx.io/images/iwiJat4bL3SM/v3/-1x-1.png
So let us see the reaction of the Minister (http://www.bloomberg.com/news/articles/2016-01-13/russia-s-59-billion-budget-cushion-may-not-last-the-year-chart)...
In short budget cuts are necessary to avoid a situation like back in '98 were the budget and balance sheet were not strong enough to stop the financial meltdown. According to DW some of cuts have already happened without much ado. Needless to say that any budget cut in this situation will have a negative impact on demand and the economy as a whole, especially in a country like Russia were the public sector and de-facto SCE make up much more of it compared to your typical Western country...
There is no doubt that the Minister hopes that ressources prices rally. Personally I guess that real prices will be higher in years to come, but every month this bear market lasts will inflict harm on the Russian budget and the Russian economy...
In short budget cuts are necessary to avoid a situation like back in '98 were the budget and balance sheet were not strong enough to stop the financial meltdown. According to DW some of cuts have already happened without much ado. Needless to say that any budget cut in this situation will have a negative impact on demand and the economy as a whole, especially in a country like Russia were the public sector and de-facto SCE make up much more of it compared to your typical Western country...
There is no doubt that the Minister hopes that resources prices rally. Personally I guess that real prices will be higher in years to come, but every month this bear market lasts will inflict harm on the Russian budget and the Russian economy...
Resources have indeed moved considerably higher* and are a huge help to support the economic policies of the government on which a large proportion of the economy rests.
Skilled actions by smart folk in important positions have been key to quell the flames of a financial crisis by usually choosing usually quickly the lesser evil. Still the Russian economy suffered heavy blows over the last years and is clearly relatively weaker then four years ago. The overall long term economic trends are also overall negative and relative positive development to a very negative one on a year-to-year comparison is still overall - well - a relative negative one...
Firn
Maybe I will do a short update with some proper facts in the coming weeks.
*I guess that in a couple of years the price of oil will be lower again. However I don't short out of principle...
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