This page has been archived and commenting is disabled.
Furious Russia, Downgraded To Just Above Junk By S&P, Proposes "Scorched Earth" Retaliation Against NATO Countries
Cyprus and Russia - what's the difference (aside from the fact that the former was a money laundering offshore center of the latter until last year of course)?
If you said one is a lackey to statist, selfish banker interests, and after having its economy thoroughly destroyed by the great doomed European sociopolitical (and pathological) experiment, came crawling back to its Eurozone masters, while the other couldn't care one bit about Pax Petrodollariana and the global central bank cabal, you are right. In which case it will also be clear why a few hours ago that joke of a rating agency, Standard & Poor's, which also earlier announced it was "affirming" France at an AA rating making it very clear it will no longer accept being sued for telling the truth and downgrading sovereigns or otherwise have its offices abroad raided, not only upgraded Cyprus from B- to B (please deposits your funds in Cyprus banks now: they are safe, S&P promises), but - far more importantly - delivered a political message to the Kremlin, and downgraded Russia from BBB to BBB-, one short notch away from junk status. This was the first downgrade of Russia by S&P since December 2008.
"In our view, the tense geopolitical situation between Russia and Ukraine could see additional significant outflows of both foreign and domestic capital from the Russian economy and hence further undermine already weakening growth prospects," S&P wrote in its report.
Moscow's MICEX stock index fell by 1.5% after the move. The ruble weakened 0.6% against the dollar to 35.977.
A further cut to junk status would be a big move, given Russia's relatively modest level of debt, according to Tim Ash, an economist at Standard Bank.
"But if the crisis in Ukraine deteriorates further, and we see sustained capital flight and pressure on the ruble and Russian markets further, then it is possible," he said.
Russia's response was prompt.
First, in retaliation to the downgrade, Russian economy minister Alexei Ulyukaev said S&P’s downgrade of Russia’s rating was expected by investors, won’t significantly change their behavior, adding the obvious that the decision to cut Russia’s rating was partly political, partly based on economic situation. In other words, entirely symbolic - it is not as if Russia has access to bond markets anyway, plus as we wrote earlier this week in "Why Putin Is Smiling At The Bond Market's Blockade Of Russia", it is not as if it needs them.
But far more importantly, and ahead of yet another round of western sanctions which appears imminent unless Obama is to look even more powerless than he currently is (granted, a difficult achievement), Russian presidential adviser Sergei Glazyev proposed plan of 15 measures to protect country’s economy if sanctions applied, Vedomosti newspaper reports, citing Glazyev’s letter to Finance Ministry. According to Vedomosti as Bloomberg reported, Glazyev proposed:
- Russia should withdraw all assets, accounts in dollars, euros from NATO countries to neutral ones
- Russia should start selling NATO member sovereign bonds before Russia’s foreign-currency accounts are frozen
- Central bank should reduce dollar assets, sell sovereign bonds of countries that support sanctions
- Russia should limit commercial banks’ FX assets to prevent speculation on ruble, capital outflows
- Central bank should increase money supply so that state cos., banks may refinance foreign loans
- Russia should use national currencies in trade with customs Union members, other non-dollar, non-euro partners
In other words, a full-blown scorched earth campaign by Russia.
Granted, Russian holdings of US Treasurys are not that substantial (and could be monetized entirely in three months of POMO by the Fed), and western financial linkages to Russia, aside from trade routes, are not life-threatening, but if Russia were to take the baton, and other BRIC countries, already furious by the recent US decision to not boost their IMF status, follow suit, then Obama's life is about to become a living nightmare. Especially, if that most important BRIC member - China - does any of the many things it can do to indicate if, in this brand new Cold War, it is with or against the US...
Finally, those curious what are the linkages between the west and Russia are, review our recent post on the matter: All You Need To Know About Russia, In Charts.
»
- 93459 reads
- Printer-friendly version
- Send to friend
- advertisements -
Least we all forget the Russia approach to China in 2007 to group together and coordinatedly dump all of their fanny and freddie bonds onto the market. Supposedly China did not do it then. I'm not sure how that would work today given the conservatorship.
http://www.zerohedge.com/article/russia-urged-china-dump-its-fannie-fred...
In total agreement Firean. What short memories we possess. We act like nothing happenned in 2008. We do not take into consideration the damage done by AAA rating of absolute shit. We fail to remember that the rating agencies were up to their necks in the ponzi of CDOs and CDSs. How the Obama Justice department failed to prosecute these unconcionable bastards.
And yet here we are, the S&P has spoken. My question is, Why is anyone listening?
One more thing Russia needs to do - invite Russian expatriots and Russian-speaking citizens of countries like Estonia and Poland to return to Russia. If war breaks out, these people are likely to be placed in internment camps. And Russia needs more people. Estonia, one of Europe's economic bright spots, will suffer a drop in output in Russians depart. The rest of the 'West' might learn a valuable lesson from it.
One more thing Russia needs to do - invite Russian expatriots and Russian-speaking citizens of countries like Estonia and Poland to return to Russia. If war breaks out, these people are likely to be placed in internment camps. And Russia needs more people. Estonia, one of Europe's economic bright spots, will suffer a drop in output in Russians depart. The rest of the 'West' might learn a valuable lesson from it.
Contrary to popular opinion the Poles are not retarded and have no desire to join a communist government.
Russian EXPATS are in other places because they want to be.
Russian channel 1 is saying that so many Russians have moved abroad as a result of deliberate policies by the West to diffuse the Russian ethnic population across the planet so that they may then move into Russia and divide it.
So.. He's saying the crappy Russian economy in the 1990s had nothing to do with people wanting to leave?
The authoritarian police, who regularly shake-down normal people for cash or attractive ladies for 'favors' have nothing to do with it?
The Ruble that has - over the last 15 years been so unstable as to be worth as little as 15 Rubles per dollar or as many as 35 Rubles per dollar - has nothing to do with expats desire to live and work overseas?
Russians own habit of stuffing Euros or Dollars in their mattresses to offset the risk of YET ANOTHER devalutaion or YET ANOTHER default - have nothing to do with it?
I know a large number of Russians in a large number of places. I don't know of even ONE who has said they felt targeted because they were Russian.
This is Putin's government trying to sell the idea to the world that Russians suffer unjust ethnic hatred and oppression due to ethnicity - like Jews!
And it is proof he needs better propagandists!
The greatest blunder Obama made in his Presidency was to accept the Nobel Peace Prize. That award tied his hands by narrowing the range of options that he could legitimately pursue on a number of events over the past six years, including Libya, Egypt, Benghazi, Ukraine, Iran, S. China sea and who knows what else.
Of course the usual troublemakers began exploiting that opening right away.
Better for the country had he gratefully rejected the award and kept his options open.
Only jerkoffs let ceremonious things limit their options.
The constitution is to George Jr as the nobel peace prize is to ___________???
Fill in the blank
This administration, from top to bottom, does not have a clue as to what they are doing and the whole world is laughing at it - especially Putin. They do not know what to do when the attorney general threats of lawsuits and their cry's of racism do not work for foreign policy.
The problem is that they do know what they're doing. The intent is to destroy America and Americans, loot the treasury for the bankers and Military Industrial Complex and others who have bribed them and to give America away to those who own our politicians.
They're doing, exactly, what they want and intend to do. America and Americans be damned.
As I said earlier, start digging and, while you're at it, starting growing your own food because there are going to be shortages of everything.
Yes. Larry, Curly, and Moe get the laughs but there is an effort behind the scenes to create the stories and set up for the jokes.
That 'peace prize' was an AA award for him being supposedly a 'black' guy. Period.
Vlad-
Buy 2 billion in May silver.
That'll do it.
And stand for delivery, Vlad
Stop spreading your bullshit myth about "standing for delivery".
The exchange can force one to accept a cash settlement. It's in their terms of agreement. Read the exchange's terms of agreement. They can force a cash settlement, whenever they want to...
Wave bye, bye to the Petro$.
can't wait for the market to explode when china sells all its usa assets. bullish!
this response has obviously been operational by the brics for a while. the ultimate brinkmanship. i bet you eurotrash can't wait to be called up for another good thrashing by the russians.
fucking zionists and their cocksuckers need to be eliminated now for the sake of the world.
lol, sell the USA assets to whom?
Today we were treated by a vacuous piece from one intellectually narrow minded if not completely disingenuous Newt Gingrich, shallowly comparing the situation ion Ukraine to the period just prior to the start of WW 1.
Newt, as per his usual, misses the point of drawing parallels to the run up to WW I. Even prior to the assassination of Crown Prince Ferdinand and his wife in Sarajevo the Austro-Hungarians had been in engaged in a long series of attempts to economically blackmail the Serbs into acceding to Austria-Hungary's full control of the remains of the Ottoman Empire in what is now know as the former Yugoslavia, including control of Serbia's debt and currency. It was a war of "economic sanctions" long before it became a hot war.
Combine the "economic warfare" and the hubris and arrogance displayed by both sides today and you have a near mirror image of 1914. But instead of fighting over the remains of the Ottoman Empire they're fighting over in what form the old Tsarist Empire will be allowed to re-emerge.
The Russians are horse blinderd by their dreams of resurgent empire and a larger place on the global stage. The Obama administration are similarly blinderd by their own delusions if intellectual and/or moral superiority and that they and they along can by shear force of will keep things from getting out of control.
One man with Browning Model 1910 .380 auto proved the masters of the universe wrong in 1914. It will only take a single incident to prove this century's batch of fools wrong as well.
God help us all, because it will be the rest of us who just want to live and raise our families in peace who will pay the blood soaked price for the arrogance of the elitist fools on both sides.
http://theeveningchronicle.blogspot.com/2014/04/the-uglyness-continues-to-grow-part-2.html
All this will be very good for China.
But the Russian, US, and EU positions are pure Oligarchical Absurdity!
It's like the crips vs bloods vs MS13, with each pretending to actually care about a territory or ethnic group while factually they are just out for themselves, and will kill the rest of us in the cross-fire without a thought.
Wars and rumors of wars...
Please come back Jesus, exterminate us all and put us out of our misery.
Death is when the real misery starts!
Death is when you feel remorse for leading such a shitty life.
Hell is not a place. It's a concept.
Hell is real, you just have not experienced it - yet.
Tell that to the millions on this planet that experiencet Hell on earth every day. Not every one gets to live your idyllic life you moron.
Like I said, 'Hell is real, you just have not experienced it - yet.'
We got sell signals this morning in all the major indicies. Short the Nasdaq, it's the weakest in the pack. http://www.alchemyfinancials.blogspot.com/2014/04/stock-market-sell-signals-triggered.html
We got sell signals this morning in all the major indicies. Short the Nasdaq, it's the weakest in the pack. http://www.alchemyfinancials.blogspot.com/2014/04/stock-market-sell-signals-triggered.html
http://www.cbc.ca/news/world/ukraine-separatists-seize-bus-carrying-inte...
I'm sorry to tell you, but CBC news is far from a reliable source about anything
Did anyone notice that the last three bulleted measures target the RUSSIAN POPULATION - not the foreign countries?
Did anyone notice that the last three bulleted measures are those normally classified as "FINANCIAL REPRESSION"???
Translation
"The Russian Government is so dissatisfied with the West that we are going to..."
(Prevent nervous Russian Oligarchs from jumping ship)
(Prevent normal Russian Citizens from protecting the value of their savings through diversification)
(PRINT MONEY - to steal the savings of normal Russians)
(Prevent Russian Companies from doing business with any but an Oligarch-Approved list of entities.)
It looks like they've take a page from the US Federal Reserve's book.
someone gave that page to the Fed...
This is the EUs evil plan to get all the Russian oligarchs to move their money back to Southern Europe so they can Corzine them. </sarc>
I am sure there are a number of entities around the world who would love to do exactly that.
But that is not especially targeting Russians. That is a constant state of humanity - to disregard moral concerns where there are benefits to be gained.
But why worry about some non-Russian's "Evil Plan" to get at Russian Oligarch's money when he's announcing a Russian Corzine job right there in the press release???????
What do you think will happen to Russian Oligarch assets denominated in foreign currency when the Russian CB divests itself of foreign currency????
I'm sure they were given the "heads-up" just like they were before the Cyprus confiscation. You have to remember those guys are all in the same club. ;-)
The site is currently not available due to technical problems. Please try again later. Thank you for your understanding.
If you are the maintainer of this site, please check your database settings in the
settings.phpfile and ensure that your hosting provider's database server is running. For more help, see the handbook, or contact your hosting provider.That's your douchee response?
(must be an Obama voter)
It happen from time to time; perhaps ZH is uploading new post; simply reload site after few minutes
I'd buy gasoline from them with Bitcoin if they would open up a gas station by my place.
The response will be "From Russia, With Malice".
Guns of August in three months.
I missed something ?
Did she say "Fuck Europe"or "Fuck the USA".
At least we know what ever kind of action Bath House and his puppet masters take, it will be BAD for us serfs.
They could care less if Russia hits us with a nuke or EMP weapon. I would not be very surprised if some rogue element does it to us and blames the other side. It's sickening that leadership has devolved into this.
You can tell things are heating up. The State department trolls are back, and are using old phrases from the cold war as if the last 30 years never happened. Recent press stories detail the State Department program to troll discussion boards and blog comments sections. The goal is to divert discussions away from reality and into carefully designed Public Relations channels, which allow the State Department to contol the direction of comments and to ensure that the Neocon leaders of America can get their message out.
Of course, this is to be expected. What isn't expected is that the Government would hire such old guys to do the trolling, many of their comments date them as 1970's cold warriors, talking like the USSR is still around, and the USA is still beat up politically after losing the Vietnam war and desperate for a come back.
The pathetic level of support for more war mongering out of Washington DC, as if they did not lose Afghanistan after more than a trillion dollars and a decade of military victories. As if Iraq is anything but a failed state in which US meddling has resulted in a daily bloodbath. Again, non-stop military victories follwed by losing of the war. Syria is next up, as the US and it's allied Al-Qaeda army using a NATO terrorist base camp to invade a sovereign nation. Again, billions spent, Al-Qaeda attracting hundreds of Europeans to fight Jihad, and all these many hundreds of Jhadist CIA operatives are now heading home to Britain, France, Belgium, Germany and others, where they can continue Jihad they learned from their Israeli and CIA leaders in Syria. All this and a nazi coup in Ukraine. That the State Department calls a spread of freedom. Yep, freedom, that is why half of Ukraine is taking up arms to kick out the US nazis, or Right Sector as they call themselves. This is sold to us as democracy, yet CIA Right Sector coup leaders have not gotten a single vote in any election. They have been appointed as rulers by Washnington and NATO. Of course the IMF, World bank, Western Bankers, and hedge funds are moving in to rule Ukraine for the good of the people. Washington is even selling this little idea. WHile Washington's tanks and troops invade the east, the media calls it an anti terrorist operation. This was standard Israeli practice, you steal peole's homes and land, then you call them terrorists and then you kill them. It all works so prefectly well. So why not use the Israeli model in Ukraine? So far so good. Our old cold warriors are giving Ivan a black eye, and the reds are on the run. Only this time it is Brussels that is the heart of Red Europe and the NAzis are all CIA employees.
Yet, CNN can sell this as a Russian invasion of freedom lovers in Ukraine, and Ukrainian tanks are on ani terror missions. Orwell had it all right, he knew it was the west aho would adopt the Orwellian world are it's basic civil model. And here we are, all the dupes are out in force parroting their hand out talking points. Pathetic, but to be expected, any nation that has as it's model of Freedom the "US Patriot Act" and allows Banks to write the legislation that congress passes to give trillions to failed banks and the shaft to veryone else.
Total corruption, is total control.
How bizarre that the only hope for the American People in bringing the parasitic Bankster/ Big Oil/ Military Complex corporate conglomerate criminals to Justice lays with a Russian president and BRIC nations actions! We will see the showdown and outcome after the May 1st. Vote. Ha. Ha.
Wasn't it Edgar Cayce that called Russia 'The Hope of the World'?
Perhaps now we can see why. Who would have guessed the changes at the time of that prediction? Perhaps Professor Sutton? he's written about this game alot.
Jack, I've always loved your comments and the one above is excellent.
Rock On
Jack Burton
Robo-signers have migrated to the S&P workshop district. Equipped with a new card table, 3 macadamia shells and a pea.
There was a Japanese fellow named Yamamoto who once said "I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve." and now 0bama pokes a giant sleeping Bear.
What atopped them from downgrading US debt to junk?
(Sarc)
Tylers, there is only 12 months in a year. 15 is not possible.
Are you shitting me?
These ratings agencies are the same lying shills that told you toxic sludge was A+ back in 2007-2008.
ROTFLMFAO S&P upgraded the 2003 to 2009 RBMS....... Just in time for earnings of TBTF ........ Where can I sign up or BRICS currency? WE ARE WEIMAR
USA USA USA
One Questions 600 solders to Poland? WTF last year had that many in SWAT gear in Boston and about the same running terror drills....
Putin (turning off oil/gaz spigots to Ukraine/EU): "Can you hear me now?"
To think that I should live to see the day when I'd beg for help from Russia. Please Russia, PLEASE go scorched earth all over the dollar. We (the people) would be oh so grateful if you could tip the dollar into hyperinflation and so provide the impetus to get the metastisizing tumor that is our federal government off of our backs. We don't like what they do any more than you do, but thanks to the Patriot Act and NDAA any of us who pose a threat are disappeared.