The question is whether the economic oligarchs, both licit and illicit, have sufficient influence to persuade Putin to change course. Not sure anyone knows the answer to that question... we'll find out.
The question is whether the economic oligarchs, both licit and illicit, have sufficient influence to persuade Putin to change course. Not sure anyone knows the answer to that question... we'll find out.
“The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary”
H.L. Mencken
Dayuhan--arrest a major oligarch who many say did his business by the book and letter of Russian law after Yukos---his company takes a 27% loss on it's stock and this is the Russian governments response.Originally Posted by Dayuhan
Today from Interfax:
09:07
PESKOV: WE ACKNOWLEDGE POSSIBILITY OF EMOTIONAL MARKET REACTION TO YEVTUSHENKOV'S SITUATION BUT THIS IS NOT REASON TO HINDER INVESTIGATIVE PROCEDURES
That "emotional market reaction" was a total of 27.3% loss in stock value in a single day on a company estimated before the arrest of 8.9B USD.
Does any current Russian government official including Putin "understand" the law of the markets and basic economics 101?
Now down to 33% by 1330 today---that means roughly 3B USD of wiped out shareholder values--and the Russians really understand economics?
Evtushenkov’s investment company, AFK Sistema, dropped 33 percent to 24.558 rubles as of 1:39 p.m. in Moscow.
“This is the new Yukos,” Vadim Bit-Avragim, who helps oversee about $4.1 billion in assets at Kapital Asset Management LLC in Moscow, said by e-mail. “The economy is doing poorly, sanctions have been imposed, and all there’s left to do is to seize tidbits that are left in the country.”
Evtushenkov has a fortune estimated at about $7 billion, according to the Bloomberg Billionaires Index, making him Russia’s 19th richest person. Moscow’s Micex Index dropped 2.2 percent today as investors deemed the arrest as a sign of political instability in the world’s biggest energy exporter.
“This directly hits the investment climate,” Vladimir Tsuprov, the St. Petersburg-based chief investment officer of TKB BNP Paribas, said by e-mail. “Many investors saw geopolitical risks and Ukraine as the main problem, underestimating the internal situation.”
Last edited by OUTLAW 09; 09-17-2014 at 02:40 PM.
Russian humor:
Russians joke over latest currency slide by renaming 50 Rb note "One Euro"
pic.twitter.com/WsV53a0lA6 v
Dayuhan---notice in this article the particular refrence by Gazprom of sinking nautral gas reserves---yes they are playing with the delivery numbers due to the Ukraine--bot on the back side not delivering in the face of sanctions hurts the Russian cash flow when they need dollars--so something is more ongoing than politics.
Look at the estimated figures up through 2017---the gas volumes are actually sinking strongly.
Having come fro an oil background and having worked the oil/gas fields when one was young--there is a direct relationship to oil production and gas production especially in joint fields---where there is oil is always gas to be found.
There have been strong net rumors of sinking oil production also mentioning 2017--here is your prove and it is from Yahoo of the mentioning of sinking oil reserves.
Remember I did indicate by 2020 massive oil prodution losses as compared to now and you questioned the comment since it came from the web.
Gazprom says unable to meet rising gas demand from Europe for now
Reuters
19 hours ago
* Gazprom says adheres to supply contracts with Europe
Gazprom Said to Face Biggest Decline in EU Revenue in 5 Years Bloomberg
( A side article really worth reading if you find it)
Gazprom's Q1 earnings hurt by Ukraine, exports outlook worsened Reuters
(Second intetesting artile worth reading)
By Alexei Anishchuk
MOSCOW, Sept 17 (Reuters) - Russia's Gazprom said on Wednesday it is unable to meet rising gas demand from Europe while it builds up stockpiles ahead of winter, undermining the ability of Europe to supply Ukraine with gas.
Slovakia, Poland, Romania and Austria have all reported slight falls in shipments in recent days from Russia, which is embroiled in a row with the European Union over the crisis in Ukraine.
Some countries in eastern Europe send gas to Ukraine, to which Russia stopped gas flows in June over a pricing dispute.
Gazprom's Chief Executive Officer Alexei Miller told Russian President Vladimir Putin that the company is pumping gas in accordance with contracts with European consumers, but was not supplying extra volumes asked for.
"Gazprom is carrying out stable daily supplies to European consumers. We fully adhere to our contractual obligations," Miller said in a meeting at the Kremlin attended by reporters.
"Once gas is collected in our underground storage, then we will be able to satisfy the (extra) demand of our European consumers," he said.
EU industry experts and European Commission officials held the latest in a series of meetings on Tuesday to assess the security of the EU's energy supplies.
EU sources, speaking on condition of anonymity, said the issue of how much gas Gazprom was supplying to the European Union had been raised and that EU officials had said Gazprom had been adjusting volumes but within contractual limits.
The European Commission has repeatedly said that storage levels are comfortable for now, but they are concerned about the longer term.
CHINA TALKS
Miller said Gazprom will produce 463 billion cubic metres (bcm) of gas this year, which is down from a previous estimate of 496.4 bcm published in May and 487.4 bcm pumped in 2013.
He also reiterated that Gazprom had been in talks with China on supplying gas on top of the previously agreed 38 bcm per year after 2019 via a so-called Western route.
Russia set its sights on energy-hungry Asian markets a decade ago and struck a landmark deal with China in May to supply it with gas from Russia's east Siberian fields.
Gazprom's previous discussions on delivering additional gas to China via the Western route have met with a lukewarm response from Beijing.
Miller told Putin that Gazprom and China have been discussing an increase in supply volumes via the route by up to 100 bcm per year, an ambitious task given a decline in the company's production levels and China's tough stance in the negotiation process.
Gazprom's chief added that the company would be able to satisfy gas demand both in Asia and in Europe
The Russian Economy: Can Growth be Restored within the Economic System? by Susanne Oxenstierna, hosted on the FOI of Sweden is well worth a read. Roughly forty pages.
A bit of it's conclusions...
Market forces play only a limited role in the Russian economy and to improve the prospects for growth with ‘western’ economic policy or to improve the institutional framework will be difficult and have a limited effect. Only parts of the economy profit from market reforms and stronger institutions. The old rent dependent sector has strong political support. It follows that more substantial political reforms are needed to solve the structural impediments and efficiency problems of the Russian economy. Society needs to become more democratic and more transparent
...
Today the Russian society is polarised on many political and economic issues, but civil society is weak and restricted and cannot fulfil its function either as watchdog or as a channel of ideas and entrepreneurship. Without political reform and a market-oriented democratic government it is difficult to see how the performance of the economy could improve.
Last edited by Firn; 09-18-2014 at 10:19 PM.
... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"
General Ludwig Beck (1880-1944);
Speech at the Kriegsakademie, 1935
As some here expected Russia is facing a tough budget:
It doesn't of course mean that the Russian balance sheet isn't still quite solid, but the Russian economy will continue to suffer and the some elements of the crisis and the sanctions will kick in with some lag.Admitting that macroeconomic stability was a "fragile" thing, Prime Minister Dmitry Medvedev told his ministers the state will not borrow excessively and will keep spending tight.
"This is the first time when work on the federal budget, the three-year budget, took place in such difficult circumstances, when an economic slowdown was exacerbated by the implementation of sanctions," Medvedev said.
"The main problem that we face today is the high level of uncertainty when it comes to how fast trust will return, how soon businesses become interested in investing, how the consumer market grows and what steps our partners will take."
A little side-story:
Meanwhile, on the gas front:Economy Minister Alexei Ulyukayev said the arrest of billionaire Vladimir Yevtushenkov on money laundering charges had hurt, not helped, Russia's business climate. These marked the first critical comments by an official since the chairman of Sistema, a telecoms-to-oil conglomerate, was put under house arrest on Tuesday.
"This is certainly reflected in the investment climate. It is clear that the suspicion that there is some economic motive behind this complicates investors' decision-making," Ulyukayev told reporters, adding that the situation could spur capital flight.
Russian gas producer Gazprom is likely to record its lowest output this year since its creation a quarter of a century ago after cutting supplies to Ukraine and losing market share to domestic rivals.
Gazprom reduced its 2014 production forecast this week, and analysts regard even this figure as overoptimistic due to Moscow's battle with Kiev over gas prices and its role in the conflict in eastern Ukraine.
Falling output could put further pressure on the economy, which relies heavily on oil and gas sales and is already slowing to a crawl partly as Western sanctions start to bite.
At least war is mostly far from cheap and the Russians are already paying part of the price for Putin's invasions...
Last edited by Firn; 09-18-2014 at 10:38 PM.
... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"
General Ludwig Beck (1880-1944);
Speech at the Kriegsakademie, 1935
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