The Russian economy (catch all)

[OUTLAW 09]

Russia is slowly ever so slowly getting to the point of confirming the slackening/drop off of oil production under the current figures starting in 2020 which means a hit for the finance side of the Russian budget.

This Interfax press release from today will slowly start the march to 2020---if they are indicating a plateau now what is then due in 2020. 2014 and three years makes it 2017--slowly getting to the magic number of 2020.

Interfax fro today:
13:04 Russian hydrocarbons output to remain on plateau for at least three years - ministry

Notice no mention that it going back up and "for at least" is not a good sign.

[OUTLAW 09]

It does now seem that in fact the Russian economy is and or was just one great Ponzi scheme meaning borrowing from the left hand to pay the right and doing it on cheap interest loans on shot 90 day lines of credit and or bank loans ---all in USDs---the sanctions have been in effect for how long now? and the targeted companies are now screaming for Russian government support which they will have to provide unless they want to the banks and oil companies to declare bankruptcy.

The core question just how long can the Russian CB hold out under the strain?

Better yet just how long can Russian Foreign Reserves hold out---a number of companies are having extreme difficulty in getting their hands on USDs due to the high exchange rates and they need upwards of 41B USDs to pay back bank/private venture groups lines of credit and loans due this month.

#Sberbank is seeking financing from Russia's pension funds & insurance companies to bolster its strained capital base http://www.themoscowtimes.com/article/507992.html

IMO Putin and his inner circle absolutely did not see this freight train coming at them when they annexed the Crimea and went into the Ukraine.

[OUTLAW 09]

Seems Russia is now complaining the sanctions did not go through the UN or WTO-----and they had anticipated the whiplash to hurt Europe which it has apparently not done as Russia had hoped for.

From Interfax today:

Duma chief: West bypassed UN, WTO in sanctioning Russia

MOSCOW. Sept 29 (Interfax) - The head of Russia's lower house of parliament has accused the West of unlawfully bypassing the United Nations and World Trade Organization in slapping its Ukraine-related sanctions on Russia.

"All this time the sanctions that have been introduced bypassed UN decisions and WTO rules, have run against common sense, and have had nothing at all to do with the course of settlement of the internal Ukrainian crisis," State Duma Chairman Sergei Naryshkin said in a letter to the president of the Parliamentary Assembly of the Council of Europe and the leaders of political groups in PACE.

It was five months after the West came up with its first set of sanctions that Russia took retaliatory measures, which is "a degree of restraint that is hard not to notice," Naryshkin said in his letter, whose text has been published by his office on Monday.

"We believed that the entire senselessness of this race of inflicting losses on each other would come home to our European partners, but this has never happened," he said.

Meanwhile, the war of sanctions has already done considerable harm to all European countries, Naryshkin said. "Responsibility for this now lies with all those who have given direct or indirect support to their main initiators," he said.

He claimed that "arbitrary interpretations" of facts had led to groundless accusations against Russia and to sanctions against Russian officials and businesses.

"Everyone has noticed that Europe did this as a follow-up to American measures," he said. "Was this not the reason that the European Union countries were prompted to be the first to introduce the so-called 'sectoral sanctions?"

"However, now that a new cold war is being forced onto the world, European politicians would be well-advised to be more careful - not to lie about a threat from Russia. That depends on the United States," Naryshkin said.

[kaur]

Russian Roulette, reloaded
- Russia latest financial account data show Moscow may not be the first to blink
by Silvia Merler on 30th September 2014

http://www.bruegel.org/nc/blog/detai...ette-reloaded/

[OUTLAW 09]

http://www.bruegel.org/nc/blog/detai...ette-reloaded/

kaur---all good points but the inherent problem is Russian banks and companies needing dollars to balance out outstanding lines of debt due this month and next month and again in early 2015 all totally well over the 130B USD mark as well as the Russian companies and banks needing USDs to pay for their overseas imports which are targeted in USDs and contracts that are still delivering even in the face of the various Russian bans.

Shifting to China has always been an idea but shifting as fast as they Russian economy is sinking ----they will not make the shift in time.

Yesterday they were only .3 away from CB involvement in supporting the Ruble---the market will push the CB to provide support and once that support wall is broken through there is no telling where it will go and the CB cannot support the Rubel for long is the general take even from Russian economists.

Again it seems the Russian economy is really just one very large Ponzi scheme which hit the wall when the sanctions came into play---the bigger question is just how much foreign currency reserves does the CB currently really have and can one trust even their numbers?

If the article figures are correct they have lost easily over 10% of their FC reserves just in the last month and that type of hit cannot go on for long for any country.

[OUTLAW 09]

And the Russian economy news just keeps on getting bad-----

Another miserable day for the Russian ruble
http://www.businessinsider.com/ruble-falls-2014-9 …
(though, partly good news for Russia's budget, which earns in dollars)

BBG story forces ruble to weaken to a threshold where Central Bank says it will intervene

Huge Scoop by BBG's Pismennaya ``Russia Said to Weigh Capital Controls If Net Outflows Intensify.'' Watch the markets now !

[OUTLAW 09]

And the price of oil just keeps falling and falling even though OPEC oil production is climbing.

IMO OPEC is driving up production to just get the same amount of USDs as before just doing it with more oil--and there is a weak demand coming out of china that is not helping.

Will be interesting to see how the Russian stock market takes this news today and the rest of the week.

A report from Reuters that OPEC had increased its output to a level not seen in nearly two years, combined with a stronger dollar, torched crude prices following the report. OPEC produced nearly 31 million barrels of crude per day in September, according to Reuters, up from 30.15 million barrels in August.