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Russian Stocks Crash As Central Bank Scrambles, Hikes Rates Most Since 1998 Default
Following a 150bps rate hike by the central bank - the largest since the 1998 default -desperate to halt capital outflows and a collapsing currency, Russian stocks have crashed 11% led by some of the country's largest banks. USDRUB rose to just shy of 37 - the weakest RUB rate on record - but rallied back a little on the rate hike but the MICEX stock index tumbled 11% to almost 2-year lows with Sberbank (Russia's largest bank) down 17% and VTB (2nd largest bank) down 20%. Between the threat of economic sanctions from the West and simple risk-aversion-based capital flight, as one analyst noted, "uncertainty risks a further escalation in domestic capital outflow."
MICEX is down 11% today alone...
Ruble at record lows against the USD...
It was the biggest increase in a Russian benchmark rate since June 1998, less than two months before Russia defaulted on domestic sovereign bonds and devalued the currency. The refinancing rate used to be the central bank’s main reference.
The Banks have been battered...
- Sberbank, Russia’s biggest bank, drops 17%, loses most since 2008
- VTB, Russia’s second-bigest lender, tumbles 20%
- Bank St. Petersburg falls 16%
- Bank Vozrozhdenie declines 10%
- Nomos Bank slides 12%
European and U.S. leaders have threatened sanctions against Russia, creating risks that economic growth will stall, demand for the country’s assets will dry up and a selloff in the currency will deepen. "There is a risk of international backlash against Russia at a time when the economy faces an increasing need for foreign capital inflows... This uncertainty risks a further escalation in domestic capital outflow."
Around the world, stock markets are tumbling with Europe down around 2% - almost its largest drop in 7 months; and Japan down 600 from Friday's highs.
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OK.. So now China dumps all their US bond and equity positions..
And the war is on!
All they have to do is call Yellien and she will buy them all. China should dump all their treasury holdings and we should stop buying chinese shit. If we dont buy it, then we dont need to re-pat the dollar back.
Thks should create a flight to the safety of Tesla, Salesforce.com, Priceline,, Lululemon, Amazon, Herbalife, Twatter, Facefuk, etc.
I don't know why Putin doesn't bypass Obama and speak directly with Jamie Dimon.
I thought today might be a little interesting...
Nothing can function outside the Budapest memorandum. If promises by the President of the US are not upheld everything goes poof. It will be upheld.
On the other side of the world, the news is the exact opposite, who wants to throw casino dice for a day?
Guess why it's called a "memorandum" and not a "treaty"...
it's an international treaty
My Phyzz stack is looking pretty shiny today.
“All they have to do is call Yellen and she will buy them all”
?? Who do you think is shorting it with every electron of fake Fed fiat they can find.
.
No, it's a memorandum.
Additionally, the US violated it by instigating the overthrow of the Ukrainian government.
In other words, go piss up a rope.
ergo it's "just a piece of paper"
even more worthless than a Constitution.
I'm sure the list a Barryisms about the US Constitution, executive privilege, negative rights et al. would provide an virtually endless sea of hypocrisy from which to fish... but I can't stand Stompyfeet videos.
It is like renewal of wedding vows aka the Helsinki Act signed by all parties in 1975 took prior to the collapse of the USSR. It is just a formal redeclaration for the Russian Federation post USSR that they still would abide by it.
.
can't ..... stop .... laughing ...... coffee... through ... nose ... help ...
The farce is strong with that one...
"There will be costs." Literally.
SWIFT, CERTAIN AND SEVERE.
Russia itself could wind up in a Skinner Box here.
Who's defending Moscow here as the Russian economy collapses?
There nothing like the threat of a nuclear exchange to make investors lose confidence. Of course in New York that's already priced in.
But Krugman said that a nuclear exchange would be bullish for window replacements.(:-(
You mean Daddy Bush? Anyways, it looks to me like this was a planned all along to destabilize Russian finance, see if they can't get one more color reveolution off the ground.
Many are unaware that The Great Depression was instigated in large part by European bank failures.
The bank collapses started in Belgium, I believe.
I don`t think China has any chips with the Russians on this one.
Really?
http://www.ibtimes.com/china-russia-dump-us-dollar-bilateral-trade-248234
http://www.marketwatch.com/story/china-russia-to-drop-dollar-in-bilatera...
On Crimea. Not in general.
http://news.sky.com/story/1219922/russia-and-china-in-agreement-over-ukraine
China bought the land under western Ukrains a while back from the previous bunch of Kleptocrats. China's interest is most certainly that Russia takes the whole enchilada, so they can get their slice back (then there is the whole Fuck the USD, Bitchez group of nations)
I read somewhere it was an austrian bank, but i dont remember where i read it.
It was actually Credit-Anstalt in Austria that collapsed, setting off the dominoes for the global banking collapse of the 1930s.
"Creditanstalt had to declare bankruptcy on May 11, 1931. This event resulted in a global financial crisis and ultimately the bank failures of the Great Depression.[2]:2–3 [3][4] Too big to fail, Chancellor Otto Ender had the CA ultimately rescued, distributing the enormous share of costs between the Republic, the National Bank of Austria and the Rothschild family. Plans of a nationalisation schemed by the Social Democrats were rejected. However, the institute was de facto state-owned after Chancellor Engelbert Dollfuß in 1934 ordered the merger of the institute with the Wiener Bankverein, thus changing its name to Creditanstalt-Bankverein."
http://en.wikipedia.org/wiki/Creditanstalt
And in 1931, there was no all powerful US Fed that could miracle the necessary funds in a nanosecond. These events won't be allowed to happen again. But when it goes..............we will all be Amish!
George Soros has great timing, consistently, when it comes to front running...errr, I mean predicting...yeah, that's the ticket..geopolitical events.
Got to love him don't you? But take heart, he's looking really old and will be going to his reward soon enough.
>> his reward soon enough.
I sort of look at is as our reward.
I had a priest once who said if you knew a real ass the best thing to do was pray for his EARLY reward.
Russia, I thought, did not have much in the way of treasuries....funny how most of the countries out there really getting creamed financially, are doing so because of a lack of dollars.
So China has a hedge?
not so much a hedge as a tether... judo can be like that sometimes...
Funny you should say that fonz. Is that "lack of dollars" by choice? Just wait until Russia announces trade deals with China and Iran.
We sell a lot of produce to Brazil. My contacts there have already said that this year they would like to pay in Real, not dollars.
My question to them was "why"? Their answer was "simply so that they don't have to worry about the exchange rate".
It's almost like they are printing as much Real as they like and are more interested in the real product or something....
Yeah, piss off Russia, I wonder how much of the E.Z.'s oli and natural gas come from Russia?
That's the thing though, right Laws? Of course they want to pay you in Brazilian currency, but if it were up to you, would you accept it? At the moment theirs is the depreciating currency, not ours.
To clear up any confusion for the meatheads who like to jump on me for such statements, I am not endorsing this, just pointing it out.
I have several international customers. I'll keep an eye on the FX market, but will most likely accept their currency and wait for our to depreciate before exchanging. Oddly enough, I was thinking of expanding my operation to Brazil, there's some great soil down there. Having some Real on hand will come in handy. I have a former employee already in Sao Paulo working on some details.
You would be nuts to take real over the dollar right now. The whole world is running back to the the bosom of grandma yellen.
+1 for the use of meatheads !!!
Is $139 billion a lot, or not? They could probably do some damage with a mass dump, but they're no China.
http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt
it's nothing
dumps require buyers... someone will buy whatever is dumped, guaranteed
No, their currency is back by gold, along with a few other country's. So since we can't even compete with it, trying to talk it down is the only viable option left.
the US has eight times the gold reserves of Russia and produces more gold per year out of the ground than Russia does... hmmm, who can compete now
Really? Based on what data?
gimme a break, go look it up
No countries currency is backed by gold AND THIS PRECISELY WHY THAT IS, and why NO CURRENCY will be backed (convertible) by gold in the near future.
Currency wars are very easy to initiate, and even the French demonstrated they could win them against the US and the FRB.
they can't do that, it would collapse their own economy... I'm starting to wonder how many times this has to be pointed out... I guess once more
No, China is on the side of the West. Especially if we promise they can take the Russian Far East (Vladivostok, Amur...). Russia has a lots of non-slavic regions that would make nice, independent countries. Nobody wanted to split Russia, but it seems they insist...
china and russia, will work together, they see the usa as damaged and like other wolves know what animal to attack, weakness, irrational actions, bluster then fold, damn what an image obuma has created in the worlds mind..
The world laughs as he polishes his peace prize.
And none of this is manipulated by the western banksters of course ;)
All this will do is encourage Russia, China, and all the rest of them to get the hell away from the petro dollar
Or regulate value of the currency.
Bankster 1; Can you believe that prick Putin is fucking with our pipeline grab?
Bankster 2; That's okay, we have enough pull in-country to crash his markets.
Bankster 1; Great! Then he won't have anything left in his bag of tricks!
Russia lives and dies by the petro dollar and this move in Crimea has cemented Putin in place for the unforeseeable future. There are consequences for your actions, even economics has a 'physics' to it.
Russia can MANDATE that oil and gas sold to the EU be priced and settled in euros. The Europeans really don't want their shit-wipes appreciating, but they don't want the fuel supply cut off either.
that sounds like a threat to me.
they are settling in USD? are you sure about that?
I have absolutely no fucking idea what currency they are actually settling transactions in now, or how uniform any policy is across existing supply contracts (regardless they can instantly convert it to any other worthless fiat at no cost since Gazprom has its own banksters and central bank membership card).
However, in order to invoke force majeure, they need a legal fig leaf from the State. Moreover, the Russian CB's is probably more concerned with geopolitical optics, headline shock-and-awe or driving a bigger share of paper oil contracts to non-USD denominated over the long term, than whatever Gazprom is actually doing.
The Euro is propped up by trillions of US dollars propping up their banks.
It is a circle jerk and Putin forgot he is in the circle.
The Ruble has been weakening since 2011. It's not like this started overnight.
And not just the Russian Rouble. Credit crisis has been stalking many places, including Ukraine, Syria, Libya...
What goes around comes around...
BTFD. The correction is OVER. The DOW futures fell by 100 points....... oh my. fucking bulltards.
BULLISH
OK. Here goes. Write them down -- no handouts here!: 724 Solutions, Ariba, Digital Island, Exodus, InfoSpace.com, Inktomi, Mercury Interactive, Sonera, VeriSign and Veritas Software.
We are buying some of every one of these this morning as I give this speech. We buy them every day, particularly if they are down, which, no surprise given what they do, is very rare. And we will keep doing so until this period is over -- and it is very far from ending. Heck, people are just learning these stories on Wall Street, and the more they come to learn, the more they love and own! Most of these companies don't even have earnings per share, so we won't have to be constrained by that methodology for quarters to come.
-i guess you all know who wrote that
Capital is always and forever a coward. /sarc
Spermbank (Russia's largest bank) down only 17%? Cum on, you can do better than that. anyone Pootin bets on a bigger fail?
English translation?
I think he is saying that Putin is an A-hole and that he has shorted the Ruble.
Currency assassination.
Play ball or get "papered!"
Bankers around the world are "pushing on strings" folks. Just wait until interest rates rise in 'merica.
Remind me, what's Russia's Debt:GDP ratio again? Compared to say Japan (or 'merica).
Russian state debt is small but its banks and private corporations are in huge debt to the west
This is because russian central bank was not financing its own economy and companies were forced to borrow from abroad
So what? Private businesses (should) go bankrupt if they fuck up. Paper is paper, this is more about the exchange for real goods and services as well as commodities.
http://www.marketwatch.com/story/china-russia-to-drop-dollar-in-bilatera...
I wonder how much oil and natural gas the E.Z. gets from Russia?
Russia would be wise to borrow as much as they can in dollars and then say "Fuck you come and get it".
There you go. My thoughts exactly, take as many free dollars as you can while depreciating your own currency, then default on everything after having changed them into Rubles when you have given them all out to your people (as Rubles to trade with China and Iran and numerous others in Asia).
Changing the dollars to rubles will leave you with worthless rubles - you have to pay your debts.
It is not a zero sum game, money is like oxygen if you don't play you will die of asphyxiation, no matter the currency.
No...you change those borrowed dollars into gold.
suicide by currency, there is a cost when you do not pay your debts and it starts with 'bend over...', even for Putin and his ilk. The USSR tried to go it alone financially and the net result was not pretty.
Thats the problem of the dickheads who loaned them the money then. Very clever Putin, very clever
Shitcago is going to borrow $1.9B ($100m to cop brutality lawsuits alone) and at this point I think these fuckers (Rahm's in the Club) know the shit's going down so they're borrowing all they can for a "Goodfellas style" bust-out.
This all sounds very bullish... Huge buy signal!
Russia's currency being manipulated by Wall Street.
Normally yes, but in this case; Russia's currency manipulated by ambitious land grab without understanding how economics works. No free rides bitches - gas or ass - so to speak.
Putin needs to cut back on his testosterone shots.
Meanwhile, the US poodle is barking to please his master:
Downing Street rejected suggestions that Britain was being less belligerent than the US because of the fear that Russia could retaliate by cutting off gas supplies to Europe.
As if the UK matters anymore except as America's poodle. Putin must be heartbroken that he won't be invited to tea by the queen anyime soon.
http://www.theguardian.com/world/2014/mar/03/ukraine-crisis-russia-contr...
Aaand it's just about time to step in and catch some of those gas assets which are being thrown overboard.
Financial atatck on Russia
Russian prime minister ordered to build ASAP a pipeline to Crimea straight from Russia
Russian energy minister in technical talks on how to cut Crimea from Ukranian energy systems
All indications are that Russia is preparing to cutoff Ukrain and EU from gas supplies. 50% of gas exports from Russia goes through Ukrain
if punching yourself in the face is considered an "attack" then yes, that's what this is... actions have reactions
That would be very, very stupid.
Get it through your thick skulls: "At the most fundamental level, all energy wars are CURRENCY wars."
If Russia wants to say FU to the Petro-Dollar, it MUST sell gas to the EU. In anything but Dollars.
The Fed/US knows this, and is trying to front-run this situation. As are KSA and Qatar.
The EU just wants an affordable and reliable gas/energy supply -- no matter where it comes from. They'd also rather pay in Euros, if course.
Got it?
whatever you do DONT BUY GOLD! Itz dangerwous
That's not rigged at all. /sarc.
Janet going down on Putan... The RSX is down 10% this morning..... Thats a years worth of dips over here, those rooskies really need to get with the program.
Russia must believe in free markets!
America will just punish russia through financial warfare as we are seeing. The days of Normandy Beach style are over. China is the one to be watching.They could send this event to a whole new level.
Punish Russia how? Through the Int'l banking system? Ok...then try oil at $150/bbl and being tieds to the gold price. Same for Nat gas.
The feckin' Bolsheviks took over the banking circles years ago.. now want their "Russia" back.
Are the banksters bluffing? And will Putin call them on it? China's currency downticks a few days for the first time in an 8 year trend and the banksters accuse them of manipulation. The Ruble has gone from 23 to 36 over the same time frame and that is considered weakness. Which is it? If Putin is serious about ending the petrodollar, now is the time. Time to batten down the hatches.
Silver For The People
(Reuters) - China and Russia's foreign ministers spoke about the crisis in Ukraine on Monday, and both countries agreed it was very important to "appropriately handle" the issue, China's Foreign Ministry said.
"Both sides believe that the appropriate handling of the Ukraine crisis is very important to maintaining regional peace and stability," the ministry said in a statement on its website.
http://www.reuters.com/article/2014/03/03/us-ukraine-crisis-russia-china...
treasury dump time, Yellen get to work, print and buy these
lol could the Chinese be more non-commital... they're sitting this one out, folks
They just got attacked themselves.
"Germany wants their land back."
This is looking like a colossal blunder as now Putin looks like the one with all bark/no bite.
"One flyover begets another."
Who cares, get Ellen to order in Pizza, thats whats in important,
how about those winners? in Hollywood? Washingtonwood, who cares.
Janet, get back to work!!!!
guess boris been taking lessons in how to win the hearts & minds of the media class
this came out to "rise the sheep up"
http://www.youtube.com/watch?v=Hvds2AIiWLA&feature=youtu.be im a ukrainian
while later this comes out (watch top first approx 2min)
http://www.youtube.com/watch?v=NmuRTGWDlDM#t=43
im a american
cyber wars a go go go
gold rubel, gold yuan, = end of king FRN$. Putin can back his with oil gas and gold, what does Mr Yellin back her's with?? this is perhaps what Putin told ol yeller obuma.
The bear may not take banker intervention kindly. This all goes to show who is realy behind pulling the Assbama's jawbones. People, the world's real and most viscious enemies are the international bankers. What can be done to avoid the theives?
the more i am looking at this, the more i am thinking the west provoked russia, they needed a diversion by any means for the complete and utter failure with domestic policy/economy. One of Russias only few sea ports, what else would they do.
Underwater Nuke from an Unmarked Submarine, in an unknown location... stop all them Pesky bankers in their tracks.. never Piss off a Bear.
did you know that nukes have signatures based on how they're constructed? think about it
+1, PTS.
If they didn't, you'd have seen one of those old nukes from the USSR days go off in the hands of turban heads.
Keep thinking....you might be onto somehting. Think modern day Bolsheviks trying to overthrow for their own benefit.
Is this maybe, a bit overdone? Somehow I think this will get settled without too many shots fired and then we are back to normal. Print, rinse, repeat.
Sweden, Latvia, Turkey,Egypt, Moldova, Hungary...Whole world is a mess.
Thanks gawd it is contained to Russia and we don't have a global economy.
All that QE funny money is a great weapon. It's bailing out of Russia and going where? Into the dollar that the world has so much faith in? Consider what a dollar will buy these days.
Safer than any OTHER negative rate sovereign banking system!!!
Bagged both these trades.. traded JRS short (JPM's Russia Index, Target 300) and USDRUB (Target 42.50 BTW), also Brent to $150.. WTI to $130.00
Trading the HVF way, all charts attached here:
https://www.dropbox.com/home/Share%20a%20chart
Douche.
certainly obama can turn his back on those seeking freedom and push our allies around.... it's his style. he's in a tif since he cant openly support his muslim brotherhood buds... and self appoint as head of the caliphate... take away his phone and pen nov 2014... cant take away his balls - got none
This is why Putin doesn't have the same flexibility as the Soviet leadership: Russia is now integrated into world markets. If the markets don't like Russian actions, they will let Putin know. If he pushes things too far, he could collapse his own economy.
Too late.
Gold producer needing dollars or would be willing to Raise RATES V. Swapping gold for dollars with China? Bonds rally on safe haven buying or bankers have perfect cover to bring earnings home to buy out obligations at the fed and provide capital to American industry. An industry sorely required to lift the world economies out of its present demand crisis and give China the Chance to grow its consumer economy which is the future?
Great, so how long until The Dragon pulls the plug on this one? Or do the Ruskies and the Dragon tuck in and take blow after blow refusing to be reactionary to all provocation.... knowing full well that end the end the US will have to recede like Rome anyway? Holy mother of God, I really thought we probably had another year at least. Blaming the financial collapse on China just seemed to simple... but you can see it coming.
Wasn't this area already Russian MORE WINE
Heh... there IS a HUGE cost to all this...
Besides the costs for "defense", just wait until Russia is expected to just "pick up" the social welfare costs of all those Ukrainians... err... "Russians" in east Ukraine and Crimea. It ain't cheap, and anyone familiar with the subject and future costs will tell you, this is one particular sticky point why Japan doesn't keep insisting loudly that the Russians outright return the Kuril/Sakhalin Islands... It would KILL them if they did.
Think about taking on paying benefits to tens of millions of people who haven't paid a drop of taxes to your economy in twenty-plus years.
Russia bought the t-shirt, make them wear it...