Putin threatens NATO & EU ?
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Wait a minute.
The UK government is taking out a loan in 2014, to pay a loan taken out in 1932, to pay a loan taken out in 1917. It looks like the UK Parliament is as clueless as the US Congress which also uses debt to pay off debt and calls that "sound financial planning." It's lunacy.
The UK government is taking out a loan in 2014, to pay a loan taken out in 1932, to pay a loan taken out in 1917. It looks like the UK Parliament is as clueless as the US Congress which also uses debt to pay off debt and calls that "sound financial planning." It's lunacy.
All money is debt matey. FIAT currencies and all that. The only valuation is faith. For all Russia's sabre rattling its now being financially shafted; which hurts most.
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"The UK government is taking out a loan in 2014, to pay a loan taken out in 1932, to pay a loan taken out in 1917"
trick is in the cost of the loans Ken-
Originally it was 5% then refinanced at 3.5% in 1932 - they wre also "infinite" so they just had to pay the interest and never worry about repaying the capital
its a sad reflection on UK economic performance that is was cheaper to keep paying the 3.5% as it would have cost more to replace them at any point in the following 82 years. They can now borrow at lower rates so it makes sense to finally retire them........
trick is in the cost of the loans Ken-
Originally it was 5% then refinanced at 3.5% in 1932 - they wre also "infinite" so they just had to pay the interest and never worry about repaying the capital
its a sad reflection on UK economic performance that is was cheaper to keep paying the 3.5% as it would have cost more to replace them at any point in the following 82 years. They can now borrow at lower rates so it makes sense to finally retire them........
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trick is in the cost of the loans Ken-
Originally it was 5% then refinanced at 3.5% in 1932 - they wre also "infinite" so they just had to pay the interest and never worry about repaying the capital
its a sad reflection on UK economic performance that is was cheaper to keep paying the 3.5% as it would have cost more to replace them at any point in the following 82 years. They can now borrow at lower rates so it makes sense to finally retire them........
its a sad reflection on UK economic performance that is was cheaper to keep paying the 3.5% as it would have cost more to replace them at any point in the following 82 years. They can now borrow at lower rates so it makes sense to finally retire them........
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US sales continued to moderately decrease in 2013. Russian sales increased by 20%.
15 Dec. 2014: Sales by largest arms companies fell again in 2013 but Russian firms? sales continued rising ? www.sipri.org
Even at startex this morning, 100 Roubles to the Pound seemed implausible. Another bad day for the Russian people.
XE.com - RUB/GBP Chart
15 Dec. 2014: Sales by largest arms companies fell again in 2013 but Russian firms? sales continued rising ? www.sipri.org
Even at startex this morning, 100 Roubles to the Pound seemed implausible. Another bad day for the Russian people.
XE.com - RUB/GBP Chart
Ecce Homo! Loquitur...
Russian crisis turns systemic as rouble crashes 13pc
Russia is in the grip of full-blown currency crisis after a panic scramble for dollars sent the rouble crashing 13pc, with contagion spreading to Brazil, Indonesia and across the emerging market nexus.
The rouble smashed through resistance to an all-time low of 65.5 to the dollar in a crescendo of selling on Monday, as oil prices continued to slide and markets braced for a likely default in Ukraine. The Russian currency has lost half its value since President Vladimir Putin first sent forces into Ukraine, setting off a chain of events that the Kremlin can no longer control.
“This is being driven by pure fear. We have crossed a line and the crisis is now self-feeding,” said Chris Weafer, from Macro Advisory in Moscow. “The central bank must intervene immediately with a great deal of money to overwhelm the sense of panic.”......
Russia is in the grip of full-blown currency crisis after a panic scramble for dollars sent the rouble crashing 13pc, with contagion spreading to Brazil, Indonesia and across the emerging market nexus.
The rouble smashed through resistance to an all-time low of 65.5 to the dollar in a crescendo of selling on Monday, as oil prices continued to slide and markets braced for a likely default in Ukraine. The Russian currency has lost half its value since President Vladimir Putin first sent forces into Ukraine, setting off a chain of events that the Kremlin can no longer control.
“This is being driven by pure fear. We have crossed a line and the crisis is now self-feeding,” said Chris Weafer, from Macro Advisory in Moscow. “The central bank must intervene immediately with a great deal of money to overwhelm the sense of panic.”......
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And despite saying it won't interfere to prop up the currency and despite committing Ł4.5bns last week to doing just that, the Central Bank of the Russian Federation (Bank of Russia) has just announced it's raising interest rates from 10.5% to 17%. This is history either unfolding or unravelling before our eyes.. Putin's gamble.
http://www.cbr.ru/eng/press/pr.aspx?...6T01_04_09.htm
http://www.cbr.ru/eng/press/pr.aspx?...6T01_04_09.htm
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The Russian currency has lost half its value since President Vladimir Putin first sent forces into Ukraine, setting off a chain of events that the Kremlin can no longer control.
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I don't think he had/has an end game. He went into it, full of his own PR, and he's been badly burned. Russia's destiny (and his, I suspect) are no longer in his control. I hope the results of his vanity and his insanity were worth it to him.
JP Morgan is reporting that Russia's central bank needs to make $100bn or more of its reserves available to markets, just to meet dollar demand.. so stand by for capital restrictions. On the plus side then, fewer charmless and sunburnt legless Russians staggering about the pool by mid morning.
JP Morgan is reporting that Russia's central bank needs to make $100bn or more of its reserves available to markets, just to meet dollar demand.. so stand by for capital restrictions. On the plus side then, fewer charmless and sunburnt legless Russians staggering about the pool by mid morning.
Ecce Homo! Loquitur...
Russia risks Soviet-style collapse as rouble defence fails
Russia has lost control of its economy and may be forced to impose Soviet-style exchange controls after "shock and awe" action by the central bank failed to stem the collapse of the rouble. “The situation is critical,” said the central bank’s vice-chairman, Sergei Shvetsov. “What is happening is a nightmare that we could not even have imagined a year ago."
The currency crashed to 100 against the euro in the biggest one-day drop since the default crisis in 1998 as capital flight gathered pace, despite a drastic rise in interest rates to 17pc intended to crush speculators and show resolve. Yields on two-year Russian bonds spiralled to 15.36pc, while credit default swaps are pricing in a one-third chance of a sovereign default. The shares of Russia’s biggest lender, Sberbank, fell 18pc.
Neil Shearing, from Capital Economics, said the spectacular failure of the rate shock may bring matters to a head. “If a rise of 650 basis points won’t do the job, we are near the end. That means stringent capital controls,” he said. Michal Dybula, from BNP Paribas, said the rouble's plunge risks setting off a systemic bank run. “A large-scale run on deposits, once under way, would make capital controls pretty much unavoidable,” he said, adding that the authorities may start by forcing state-controlled companies to sell foreign assets and repatriate funds........
The rouble crash has doubled the cost of servicing nearly $700bn of external debt owed by Russian banks, companies and state bodies, mostly in dollars. They must repay $30bn this month and a further $100bn next year. Oil giant Rosneft has requested $49bn of state aid to weather the crisis. Traders in Moscow expressed fury at the central bank’s refusal to deploy its $416bn of foreign reserves to “turbo-charge” the defence of the rouble, though the authorities may have intervened in late trading. The currency clawed back some ground - to 69 against the dollar - after one of the wildest days of the modern era. Eugene Kogan, from Moscow Partners, said the Russian stock market faces “slow death” over the next six months as liquidity vanishes.
It is clear that the authorities are guarding their reserves jealously after burning through $100bn this year to little avail. BNP’s Tatiana Tchembarova said what remains no longer covers external debt, unlike 2008 when there was still ample cover. “In addition to being twice as levered, Russia is entering this crisis with lower reserves,” she said. The government has already committed $143bn in foreign reserve spending for next year. “We think that more will be required to support Russia’s banking system,” she said. The Kremlin had to spend $170bn rescuing the banks in the 2008-2009 crisis.........
The central bank knows that Russia’s seemingly large reserves are a Maginot Line. Yet its attempt to defend the rouble only by raising rates is itself lethal. Even before the latest move it warned that the economy could contract by 4.7pc next year in a scenario of $60 oil prices. The slump may now be far worse as a violent monetary squeeze sends tremors through the banking system and sets off a wave of corporate bankruptcies. BNP Paribas said each 100-basis point rise in rates cuts 0.8pc off GDP a year later. Rates have risen 750 points in a week.
Lars Christensen, from Danske Bank, said the Kremlin’s actions have led to the “absolutely worst possible outcome” since the botched move is enough to do grave damage, without solving anything. “They should have let the currency go rather than killing the economy. Investment is in freefall, and I fear this shock is going to be even bigger than in 2008-2009. Nothing suggests that oil is going to rebound quickly this time,” he said............
There is no sign yet of relief from the oil markets. Brent crude fell below $59 a barrel on Tuesday for the first time since the depths of the Great Recession in 2009. The fallout from the crisis is already hitting banks linked to Russia and Ukraine. The share price of Austria’s Raiffeisen fell 8pc in Vienna. More than 240pc of its tangible equity is exposed to the region. The biggest external lender is France’s Societe Generale, with €25bn of exposure, or 62pc of tangible equity. Contagion is spreading across the emerging market nexus, hitting countries such as Turkey and India that should be beneficiaries of lower oil prices. “There is absolutely no liquidity anywhere. The system is stressed and we have a crunch all over the place,” said one hedge fund trader. There are signs that the sell-off is becoming self-feeding as investors withdraw money from emerging market bond funds, forcing the funds to liquidate holdings into the downturn. In some cases managers are acting tactically, selling “proxies” such as Turkish debt given the difficulty of exiting Russian positions.
The rouble has now fallen 56pc against the dollar over the past year. Russian GDP has shrunk to $1.1 trillion, smaller than the economy of Texas, and half the size of Italy’s. The effect has been to double Russia’s external debt to at least 70pc of GDP, a high-risk level for rating agencies.
“A Russian downgrade to junk is only a matter or time,” said Tim Ash, from Standard Bank.
Russia has lost control of its economy and may be forced to impose Soviet-style exchange controls after "shock and awe" action by the central bank failed to stem the collapse of the rouble. “The situation is critical,” said the central bank’s vice-chairman, Sergei Shvetsov. “What is happening is a nightmare that we could not even have imagined a year ago."
The currency crashed to 100 against the euro in the biggest one-day drop since the default crisis in 1998 as capital flight gathered pace, despite a drastic rise in interest rates to 17pc intended to crush speculators and show resolve. Yields on two-year Russian bonds spiralled to 15.36pc, while credit default swaps are pricing in a one-third chance of a sovereign default. The shares of Russia’s biggest lender, Sberbank, fell 18pc.
Neil Shearing, from Capital Economics, said the spectacular failure of the rate shock may bring matters to a head. “If a rise of 650 basis points won’t do the job, we are near the end. That means stringent capital controls,” he said. Michal Dybula, from BNP Paribas, said the rouble's plunge risks setting off a systemic bank run. “A large-scale run on deposits, once under way, would make capital controls pretty much unavoidable,” he said, adding that the authorities may start by forcing state-controlled companies to sell foreign assets and repatriate funds........
The rouble crash has doubled the cost of servicing nearly $700bn of external debt owed by Russian banks, companies and state bodies, mostly in dollars. They must repay $30bn this month and a further $100bn next year. Oil giant Rosneft has requested $49bn of state aid to weather the crisis. Traders in Moscow expressed fury at the central bank’s refusal to deploy its $416bn of foreign reserves to “turbo-charge” the defence of the rouble, though the authorities may have intervened in late trading. The currency clawed back some ground - to 69 against the dollar - after one of the wildest days of the modern era. Eugene Kogan, from Moscow Partners, said the Russian stock market faces “slow death” over the next six months as liquidity vanishes.
It is clear that the authorities are guarding their reserves jealously after burning through $100bn this year to little avail. BNP’s Tatiana Tchembarova said what remains no longer covers external debt, unlike 2008 when there was still ample cover. “In addition to being twice as levered, Russia is entering this crisis with lower reserves,” she said. The government has already committed $143bn in foreign reserve spending for next year. “We think that more will be required to support Russia’s banking system,” she said. The Kremlin had to spend $170bn rescuing the banks in the 2008-2009 crisis.........
The central bank knows that Russia’s seemingly large reserves are a Maginot Line. Yet its attempt to defend the rouble only by raising rates is itself lethal. Even before the latest move it warned that the economy could contract by 4.7pc next year in a scenario of $60 oil prices. The slump may now be far worse as a violent monetary squeeze sends tremors through the banking system and sets off a wave of corporate bankruptcies. BNP Paribas said each 100-basis point rise in rates cuts 0.8pc off GDP a year later. Rates have risen 750 points in a week.
Lars Christensen, from Danske Bank, said the Kremlin’s actions have led to the “absolutely worst possible outcome” since the botched move is enough to do grave damage, without solving anything. “They should have let the currency go rather than killing the economy. Investment is in freefall, and I fear this shock is going to be even bigger than in 2008-2009. Nothing suggests that oil is going to rebound quickly this time,” he said............
There is no sign yet of relief from the oil markets. Brent crude fell below $59 a barrel on Tuesday for the first time since the depths of the Great Recession in 2009. The fallout from the crisis is already hitting banks linked to Russia and Ukraine. The share price of Austria’s Raiffeisen fell 8pc in Vienna. More than 240pc of its tangible equity is exposed to the region. The biggest external lender is France’s Societe Generale, with €25bn of exposure, or 62pc of tangible equity. Contagion is spreading across the emerging market nexus, hitting countries such as Turkey and India that should be beneficiaries of lower oil prices. “There is absolutely no liquidity anywhere. The system is stressed and we have a crunch all over the place,” said one hedge fund trader. There are signs that the sell-off is becoming self-feeding as investors withdraw money from emerging market bond funds, forcing the funds to liquidate holdings into the downturn. In some cases managers are acting tactically, selling “proxies” such as Turkish debt given the difficulty of exiting Russian positions.
The rouble has now fallen 56pc against the dollar over the past year. Russian GDP has shrunk to $1.1 trillion, smaller than the economy of Texas, and half the size of Italy’s. The effect has been to double Russia’s external debt to at least 70pc of GDP, a high-risk level for rating agencies.
“A Russian downgrade to junk is only a matter or time,” said Tim Ash, from Standard Bank.
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10 year Russian bonds, when I looked the other day, were only marginally below junk anyway.. god knows what they are now. Each Xmas, I shuffle my fantasy league play fund and retain new holdings for 12 months (nothing big, just a few hundred blatts in each) only. 5 years ago, this JPM fund formed part of my thinking and although I really wanted to keep it, my own rules compelled me to bang out. Thankfully! Fear and greed can affect us all.
JPM Russia | JP Morgan Asset Management | Fund factsheets | FE Trustnet
JPM Russia | JP Morgan Asset Management | Fund factsheets | FE Trustnet
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Al, the reason Russian sales increased by 20% is that ordinary Russian people have seen this coming and would rather buy something,say a car, or fridge, than have a pile of Roubles to look at.
Ecce Homo! Loquitur...
Putin's economic lies over Russia have been dangerously exposed
Vladimir Putin has been cornered - and now he could now lash out
.......The most dangerous outcome is that Mr Putin responds to the crisis by lashing out. He knows that time is against him. The European Union is dismantling his most important business model – the corrupt and exploitative export of pipeline gas. Nato is getting its act together, ending a decade of military weakness and indecision. The Russian leader needs a game-changer – something that can rewrite the rules and show the Russian people that their economic sacrifice is merely the cost of political glory. He also knows that geopolitical tension is a surefire way of sending the oil price up again. As the country’s woes deepen, and his options narrow, Mr Putin’s recklessness will come to the boil. Stand by to be scalded.
Vladimir Putin has been cornered - and now he could now lash out
.......The most dangerous outcome is that Mr Putin responds to the crisis by lashing out. He knows that time is against him. The European Union is dismantling his most important business model – the corrupt and exploitative export of pipeline gas. Nato is getting its act together, ending a decade of military weakness and indecision. The Russian leader needs a game-changer – something that can rewrite the rules and show the Russian people that their economic sacrifice is merely the cost of political glory. He also knows that geopolitical tension is a surefire way of sending the oil price up again. As the country’s woes deepen, and his options narrow, Mr Putin’s recklessness will come to the boil. Stand by to be scalded.
Nato is getting its act together, ending a decade of military weakness and indecision.
Lonewolf50,
That wasn't ORAC's assertion, he was quoting from the article in the Daily Telegraph, so you'd be better off directing your question to the defence, economic and foreign affairs correspondents of the Torygraph.
My take on "getting its act together" would he the large scale military exercises conducted by NATO in Poland and the Ukraine, the ongoing increase in operations like Baltic airspace policing, deploying USAF F-16's to Poland, stockpiling military equipment in the eastern half of the alliance and increased border surveillance.
That wasn't ORAC's assertion, he was quoting from the article in the Daily Telegraph, so you'd be better off directing your question to the defence, economic and foreign affairs correspondents of the Torygraph.
My take on "getting its act together" would he the large scale military exercises conducted by NATO in Poland and the Ukraine, the ongoing increase in operations like Baltic airspace policing, deploying USAF F-16's to Poland, stockpiling military equipment in the eastern half of the alliance and increased border surveillance.
My take on "getting its act together" would he the large scale military exercises conducted by NATO in Poland and the Ukraine, the ongoing increase in operations like Baltic airspace policing, deploying USAF F-16's to Poland, stockpiling military equipment in the eastern half of the alliance and increased border surveillance.
Increased Baltic Ops: Well, now that we have added 3 Baltic states to NATO, we need to do exercises there. Otherwise, the capability of actual coalition operation is a chimera, a fraud.
Deploy USAF F-16's to Poland. As they've been part of NATO for well over a decade ... that should be "ops normal, we det to alliance territory as a matter of habit." You're telling me that this is a sign of NATO getting its stuff together? Hardly. It's basic ops. It's also as much an example of bilateral ops as anything "NATO" in character.
Adding equipment and increase in border surveillance.
OK, that's improving posture in a zone of potential trouble. You'd rather expect a DEFENSIVE alliance to do that, wouldn't you?
Sorry, not impressed. (Had the opportunity to serve in NATO proper for a few years).
The underlying political fault lines within the Alliance cannot be so easily masked by the above mentioned smoke screens. I think we all can remember how many nations it takes to get anything done as an alliance.
All of them.
Mr pr00ne,
By getting its act together, NATO needs to do the following, ahem; all member states, with immediate effect, should commence plans to convert to wartime economic production. We need to introduce rationing straight away. During the last lot, the population was fed better than ever before or since, everyone had a properly balanced diet and nobody had type 2 diabetes and gastric bands were unheard of. The Armed Forces of all member states should be expanded fourfold with a call up of all reservists and plans for the invasion of Russia commenced, possibly with landing points along the Black Sea coast and should the Baltic states have already been over run by the Russians then we may need to look at landing grounds along the Baltic coast and ....... where's everyone gone?
FB
By getting its act together, NATO needs to do the following, ahem; all member states, with immediate effect, should commence plans to convert to wartime economic production. We need to introduce rationing straight away. During the last lot, the population was fed better than ever before or since, everyone had a properly balanced diet and nobody had type 2 diabetes and gastric bands were unheard of. The Armed Forces of all member states should be expanded fourfold with a call up of all reservists and plans for the invasion of Russia commenced, possibly with landing points along the Black Sea coast and should the Baltic states have already been over run by the Russians then we may need to look at landing grounds along the Baltic coast and ....... where's everyone gone?
FB
Last edited by Finningley Boy; 17th Dec 2014 at 21:57.
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Russia's entire economy is highly dependent on selling oil and natural gas. With the price of oil nose diving, the Russian Ruble is in "catastrophic decline". And the outlook for increased oil prices is grim. The US has two huge oil fields coming on line, either one alone has more reserves than all of Saudi Arabia BEFORE they started pumping oil. The US will soon not only be energy independent, but will be a huge exporter of oil. And that does not include the huge oil field in Canada also just coming on line. Once the pipeline from Canada to the Texas gulf coast is complete, North America will be awash in oil.
No amount of sabre rattling and invading of neighbors is going to change the realities for the Russion economy.
One last point: Here in the States the concept of "drill here, drill now" as a means to reduce oil prices and reduce our oil dependency was laughed to derision by the left. I just paid $2 per gallon for gasoline. Looks like all the oil coming on line is doing exactly what our leftists said never would or could happen.
No amount of sabre rattling and invading of neighbors is going to change the realities for the Russion economy.
One last point: Here in the States the concept of "drill here, drill now" as a means to reduce oil prices and reduce our oil dependency was laughed to derision by the left. I just paid $2 per gallon for gasoline. Looks like all the oil coming on line is doing exactly what our leftists said never would or could happen.
Last edited by KenV; 18th Dec 2014 at 19:24.