Ukraine: military (Aug '14 to mid-June '15) closed

[OUTLAW 09]

Global capital markets are called "global" for a reason. Lines of credit are available in plenty of places, and Gazprom doesn't do all that much business with the US. US-only sanctions will be a minor issue at most, and are not going to change anyone's behavior. The US simply doesn't dominate the global financial landscape in the way it once did. Overall that's a good thing for the global economy, but it does reduce US leverage, particularly over Russia, where economic linkages are not that strong.

I think you're also underestimating the extent to which the US needs the Europeans in this as equal partners. If the US looks inclined to go it alone, many in Europe will be inclined to fold up the tents and let the US do it. Forcing Europe to lead in regional affairs is very much a legitimate goal for the US, just as forcing Japan to step up in Asia is a major goal there. If the US jumps out in front, will the other partners do their share? Not bloody likely.

The US cannot police the world alone, and allies need to accept that, step up, and do their share, even if that means the US has to simply refuse to go unilateral. Forcing regional allies to take an equal part in managing affairs in their areas is a goal as important as anything specifically related to the Ukraine.



That's not going to work for long enough to make a difference. Everyone in the oil market knows that the SPR is finite and needs to be replenished, and that when replenishment starts, the US will have to buy more than it consumes: demand will increase. That means a scramble to stock up in anticipation, and it means producers with financial reserves will cut back in order to sell their oil at the higher prices that will commence when the US has to replenish the reserves. The more the US releases, the faster the scramble will get, because the more the US releases, the sooner and more aggressively they will have to replenish.

Even in the very unlikely event that the US on its own could depress oil prices far enough long enough to seriously hurt Russia, have you considered the collateral damage in other countries that depend on oil revenue? Think Nigeria, Venezuela, Mexico, etc...

Trying to manipulate oil prices as a weapon is a lot more complicated in reality than it is in the minds (using the term loosely) of the blogosphere. That's why you don't see credible analysts proposing it.

Dayuhan---that pointing this out to you as you sometimes while looking at the picture see the small things not what is staring you in the face. By the way the comments I had on oil in fact came from one of the best oil commenters in the business not from the blog world.

If all of what you say is correct--assuming it is correct then explain why VTB and Rosneft are asking the Russian Central Bank for support because they have a total of 34B due the end of this year and beginning next year in debt services and cannot get financial support from US and nearly now impossible in the Far East capital markets.

Think about it---all banks--global in nature have to clear their USD accounts through NYC and for that they must get a US license to do business---even if just clearing USDs.To clear even USDs for a Russian sanctioned person or companies risks that bank losing it's US license and if lost they cannot clear USDs regardless where those dollars reside and if they cannot clear that means a business disaster for them.

That my friend is the current globalness of banking.

Currently all Russian companies and banks that have been hit with sanctions are standing in line and have formally asked the Russian CB for support---notice no response from the CB---alone VTB and Rosneft have asked for 45B USD and the CB has only 450B in foreign currency available on top of the demands for the Yukos court decision that they must pay in order to remain credible banking wise..

Secondly oil---have you honestly checked how the current prices for sour crude are dropping and fast---Russia defines their needs last week to be 104 per barrel actually up from their previous statement of 95.

Sour crude is expected to drop to the support range of 90 and if it breaks through that then the bottom cannot be seen. Right now in the face of massive intl political events which should be driving the prices up they are in fact sinking on their own---ever wonder why?