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Rosneft "Radical" Sanctions Retaliation Proposal Sends Russian Bonds, Currency Plunging
10Y Russian bond yields have broken above 10%, trading at the highest yields since 2009 as the Ruble plunges once again to fresh record lows against the dollar. These significant moves come on the heels of two notable headlines overnight. First, German exports to Russia slumped 26.3% YoY in August (down a stunning 16.6% year-to-date with vehicle exports plunging 27.7%) as sanctions batter bilateral trade. Secondly, Rosneft has proposed what is being described as "radical" reactions to the West's sanctions, which the Kremlin has (for now) denied.
Bonds and Ruble are tumbling...
As German exports to Russia collapsed (via Xinhua)
German exports to Russia dropped significantly in August as the Ukraine crisis hit their bilateral trade, official data showed on Wednesday.
In August, German exporters delivered goods worth 2.3 billion euros (about 2.9 billion U.S. dollars) to Russia, the German Federal Statistical Office (Destatis) said. Compared to the same month of previous year, the exports slumped by 26.3 percent.
From January to August, German exports to Russia fell by 16.6 percent year on year. Vehicles and motor vehicle products was hit the worst, suffering a decline of 27.3 percent.
The drops showed a deteriorating bilateral trade between the two countries. From 2010 to 2012, German exports to Russia enjoyed high growth every year. In 2011, the exports rose by 30.8 percent.
And Rosneft unveils new "radical" sanctions (via Interfax)...
Russian presidential aide Andrei Belousov said he had received proposals from Rosneft on how to react to Western sanctions, and these proposals are being reviewed.
"I would say that the radicalism of the proposals for now exceeds the sharpness of today's situation," Belousov told journalists on Wednesday.
"We are in the process of studying [the proposals]," he said.
Commenting on Rosneft's proposals, Economic Development Minister Alexei Ulyukayev said: "It's a very complex document, complexly formulated. I don't think it is grounds for making any decisions."
The Kremlin has denied the rumor...
Russian presidential spokesman Dmitry Peskov denied on Wednesday reports that Russian oil major Rosneft allegedly prepared proposals on new retaliatory sanctions.
“This absolutely does not correspond to reality, this information that Rosneft allegedly prepared proposals of anti-sanctions nature,” Peskov said.
“Preparations of any proposals are out of the question,” Peskov said. “This is not true that there are some proposals from Rosneft.”
* * *
It seems someone is really upset as Sechin news just reported: Rosneft to file lawsuit against Kommersant daily - the entity that broke the story.
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Russia's economy is headed for the toilet. From cars to cell phones, Russians love their imports, so this is going to hurt. 50 rubles/dollar here we come!
Russia don't need US crap. They can survive without it. It is the USA thats bankrupt when people stop accepting their toilet paper
Try getting a job in Russia that pays $100,000 starting out, or $150-170k with experience. In USA, millions do it.
Corporate/Gov welfare or Exceptionalism? Indeed...
Try getting out of college nowadays and getting a better than minimum wage job to start your new career
Trying to BK Russia first?....Not gonna happen folks.
Japan has no economy and thanks to Fukushima it is a dying Island.
Look for WW3 to start from Japan.
Look for Iran/Russia to carpet bomb Qatar...prolly some of Saudi Arabia too.
Europe will come to Russia crawling on their Knees at that point.
Three-quarters of a century of having more trinkets and toys than the rest of the world has only made Americans even more puerile and stupid. Material goods are a distraction.
Having more shit doesn't make you a better person.
EU countries that bow to NATO might well experience a very cold shoulder from Russia (and deservedly so).
Perhaps it's time Comrade Putin tries his hands at regime change in countries that are state sponsors of terrorism.
Like the aforementioned Qatar and Saudi Arabia.
(But but but... those are GOOD terrorists!)
Now wouldn't THAT be something. Hard to argue something right outta the US playbook. Oops, my bad forgot that playbook is only for the good guys.
Try living without conspicuous consumption, billions do it.
...gonna be fubar all around the planet very soon.
Try getting a super sized meal, or a non-super sized young woman in Russia. Not so easy these days. For the former, anyway.
Short term pain only.
Ignorant post
Big Mac cost was 60% Moscow of US in real exchange
but Russia do't need gmo/sawdust boogers has real food good riddance
and compare fatness of women?
your reason is lost
Self absorbed ignorance. Try living a life
"Try getting a job in Russia that pays $100,000 starting out, or $150-170k with experience. In USA, millions do it."
And what will that pay be after King Dollar is in debtor's prison?
millions?
and those buy and waste....
then how many lives food stamps?
averaged?
how much is total taxed in real?
Russia has 13% Flat Tax only
http://www.heritage.org/research/commentary/2003/03/russias-flat-tax-mir...
Economist World Debt Comparison compare debt per person
better worry about your own country
cigarEngineer:
Out of curiosity, what percentage of that $100k - $170k gets ploughed straight into the ground aka real estate / mortgage / rent?
Just wonderin'
RE, mortgage, rent. You forgot TAXES ... on income, RE and sales taxes. The US of A is a giant slave camp.
Income tax in Russia 13%, try that in Europe or USA.
Public Debt per person US is 30x that of Russian Federation.
Personal debt Americans vs Russians is even higher in real.
Russians do not spend money they do not have normally.
the USA debt is owed to itself, which it creates at will. this is what is called a virtuous circle. tomorrow, it may be called something else.
US and Europe need Russian titanium alloys (Boeing and Airbus) etc, Russia needs Caterpillars etc.. Give Eastern Ukrainians a supervised vote and stop the nonsense!
Russia doesn't need CAT. There are plenty of Asian yellow iron suppliers.
Komatsu can't deliver enough!
"Russia don't need US crap."
Does the US still make crap? I thought the US economy was all people servicing each other. War materials excepted of course but Russia has a good handle on that anyway.
US economy = ponzi finance, debt, cubicle drones playing farmville and updating their "status" on Faceberg, iCrap, house flippers, weed, poker, transfer payments, war, prisons, weapons and survival gear. Should be epic when it all blows.
Needs and Desires?
do you need a new car or cell phone?
if the citizens are called upon to keep the existing systems for say 5 years - will they still be able to drive to the grocery store or make a call - Hardship..hardly!
This decision is now coming down hard on the EU workers and businesses who have to bear the immediate cash flow impact - for what? - God and Country? .....No USA objectives. Can the polticians who are paid for their decisions from Merkel on down stand the heat from the people and for how long?
no one believes anything anymore
The false flag must be coming
Russia's economy is headed for the toilet. From cars to cell phones, Russians love their imports, so this is going to hurt. 50 rubles/dollar here we come!
You are assuming that rubble/dollar FX rate matters.
You are assuming that there will be an X quantity of goods that russia will sell in USD.
FX exchange is irrelevant if real trade collapses
I dont care if it matters or not ekm, but the reality is that the FX markets is currently being used as a mechanism to drive countries into desperate situations. With the FX markets openly rigged with nothing to be done about it by the regulators...its no wonder Putin and Russia are in a bad spot....the plunging ruble will cause hardship for many Russians in the coming winter, which will further strain other countries in Europe who need energy. People keep saying Russia is evil but I think they know that they were going to get screwed either way by the West and they can either just sit there and let it happen OR resist to make sure this aint gonna happen without a fight....which is why Putin is playing hardball. I think the other EM countries sees this, which I think they have already, and will play the same game of de-dollarization. But they should do this asap.
Correct, FX market used as war tool which is why world de-dollarizing.
There is no fear of digits on computers.
The only human fear is from actual violence.
The goal is to destabilize all the EM countries one by one in order to drive the capital there to come over to the USA and bid up the 'safe haven' dollar (Its not safe haven but Zio-owned MSM will be telling everyone on TV that it is). How they doing this, recap...by political means (Nuland) and rigging FX markets. First, Brazil, now Russia....India next with its overvalued Sensex...and lastly China, not sure how they will deal with China...but yeah its looking like trade will suffer as a result of this capital movement out of EM into the US.
As for violence....yup...I agree 100%, once the Zionist motherfuckers feel insecure, is when drastic measures will have to be done, and at that time, money is definitely secondary to survival. I just hope they get assasinated one by one before they get the chance to crash this thing and bring down 99% of the many people below them.
If it's a goal its a bad one.
There is no economic growth anywhere right now.
China is interesting... SOBs (State Owned Banks, but the other works too) have issued a huge pile of USD denominated overseas debt and have decent market share. If things turn ugly, they could find support for redonomination.
All the existing F/X and capital flow models point to relatively small CNY market share provide, but they only a provide a static image of a reality that isn't necessarily so static.
Russia is not in a bad spot ! Russia is in a bad spot based on Wall Street standards ! Russia is playing a game, they know the enemy called Wall Street. The US is desperate to hold its Paper empire together. The Value of your currency is useful for buying things in other currencies. They are not buying ! They are selling oil and Nat Gas.
Belarus the first country who started buying Russian oil for Rubbles.
They already paid upfront.
you would need to run it through the google translate
http://vz.ru/economy/2014/10/29/712898.html
It's the German economy headed for the toilet.
Where is the "radical" proposal? I don't see it.
And why would Rosneft propose it? Other than headline generation for political points, it makes no sense at all.
Because Rosneft would presumably be a beneficiary of any systematic expropriation of foreign-owned equity in the energy sector, or strategic default on foreign debt.
Putin you just gonna sit there and let the moneychangers do this shit?
Putin been putin up wid a lot.
The Russians have survived much tougher times. Keep in mind their debt to GDP at about 16%, US debt or European debt to GDP:___ care to take a guess?
Putin is prepared - paid down the debt a long time ago - the people are resilient they know hardship for generations
NATO on the Ukraine is death once the tactical Nukes are deployed - unless Putin stands his ground and creates the buffer zone south of the Dnieper River from East to West - his country is a nuclear holocaust and the 9 time zones belong to the USA as well as the pipelines
what??????
the brits are medicated and weak
the yanks fat and sickly
they cannot survive without supermarket without big pharma drugs.
the russian people are hardy
they are survivors
they can cope without iphone.
they are connected to the land and soil
they will default back to survive mode.
these wars are a jewish banker issue caananite talmudic blood lust hollocaust as satanic sacrifice.
russia come and see
http://www.youtube.com/watch?v=L-Ro0SZf438
Americans are medicated and weak as well. The white women are no longer breeding either. Both nations are fucked.
Economist World Debt Comparison
http://www.economist.com/content/global_debt_clock/
"As German exports to Russia collapsed"
the web we, er, they weave
Am I the only one who recognizes higher yields as an opportunity for the issuer to buy back bonds at a lower price?!
water, water, everywhere...
haha ... you're bringing back flashbacks
i remember back during the recession when the (insolvent) banks (before fedgov backstopping everyone became standard) were able to report income gains on this.
say you issued $1 billion in bonds ... everyone scared you wouldn't survive and sent your interest rates soaring ... say "value" of bonds issued only $600 million ... banks could bank that $400 million as income gain (didn't actually have to repurchase) since retiring that debt would pocket you that much
talk about F'd up ... the worse your shape the MOAR you made
ding-ding
Do svidaniya Bitchez!
Leave Russia the fuck alone already
not that macro econ matters anymore
but i'll just bore you for a moment
MBA out with weekly mortgage application index ... purchase portion
down 5% week over week
down 15% year over year
i checked corresponding week for last year and that was down 0.1% year over year (2012)
Cautiously pushing that tbond bet.
Never invade Russia in the Winter.
No one ever does, problem is strategic retreat, Russia is one big damn place, they are always stuck there over the Winter, that of course has not worked out so well.
Sounds like they are gonna have to go back to couriers and stay away from telephones and emails.
Yob tvoyu Mat, fucking NWO swolutches.
Motherfuckers indeed.
There needs to be a Clarification here, and I am Happy to make it:
Anything that Germany does - ANYTHING, Must be 'Sanctioned' by the State Department FIRST... Such provides the context by which any 'news' coming out of that part of the world should be viewed.
Putin has no real alternative to the present system.
He was just hoping to snuggle up the EU's ass and pop out as the head, but the US threw a monkey in the works.
Now he is back to the drawing board, not knowing what to do.
He is an opponent in the game, wanting a larger share and respect, not an enemy.
And the Wolfowitz Doctrine says: No. Therefore, march of the Iskanders proceeds.
Meanwhile, sick people in charge compel the neocons to continue their agenda of supporting Ukraine jewligarchs at the expense of Russia, and would be perfectly content even if a massive humanitarian crisis unfolds there. Evil fucks.
Putin should have nipped that evil in the bud.
.
https://www.youtube.com/watch?v=ygQvB6OjHOU
"Kommersant" reported on October 29 that state-run Rosneft's proposals include limiting cooperation aboard the International Space Station, prohibiting burial of U.S. and EU nuclear waste in Russia, and possible confiscation of property in Russia owned by Western countries or their citizens.
http://www.rferl.org/content/rosneft-sanctions-russia-west-space-station/26664118.html
So who is really being hurt worse? For Germany, this involves a drop of about 600 million Euros in trade a month. Not even a billion, which makes it peanuts in an economy that size. Plus these goods will surge greatly once the sanctions regime is lifted. Repressed demand for new German cars, etc. will not go away.
Meanwhile, Russian bonds head for orbit and Russian companies scramble for hard currency of any sort to pay back their western creditors. It should be kept in mind that these sanctions are merely a tickle compared to what a full embargo would do.
Like it or not, the score is currently
Obama: uno
Empire of Evil v 2.0: nada
The Evil Empire is headquartered in London, New York, and Washington. Millions have died lately in Syria, Iraq, Libya, and Ukraine to defend the bloody dollar regime. You are not only wrong when you think of Russia as some kind of consumer economy that crumbles at the thought of no super-sized meals available but when you call the Russians evil, who are only defending themselves against a collection of bloodless gangster devils intent on extending the life of their thieving murderous empire, you are probably a witless shill for the scum of the earth (although I do admit to the possibility that you are merely witless).
Say it again!!!!
Damn that was good!!
you forgot tel-aviv
Embargo's go both ways
you forget the thousands of Germany companies operating in Russia and the $$$ impact it has on them.
The ruble has been becoming weaker recently. Russians can't afford to buy expensive foreign cars.
German cars are prohibitively expensive even in euros. Well, a Volkswagen's worker makes $67 per hour.
Russians will buy cheap $5,000 Russian cars.
This.
The ruble drops and everyome in the west screams. But here is the thing, Russia has had local manufacturing for decades, making some decent goods but much cheaper and not as competitive to the foreign make.
Now what we are seeing is what the economic advisor to Putin been saying for a long time - rely on domestic consumers.
While auto sales in Russia has fallen, car brands like avtovaz has been doing quite well (lada granta and kalina are top sellers) because they are half decent cars for half the cost. Foreign cars are going to have to change if they want to survive Russian market. Good thing is, companies like Kia and Hyundai are smart and work with Russian automaker Sollers to makes their cars in Russia. Ends up being decent made cars at competitive prices, and Russians keep their jobs.
This in turn works for a ton of industries like the heavy industrial ones. While Russia was importing steel and other metals that have been syntheasized in EU, after they sold the raw material to them, Russia is now doing it herself. Same with heavy equipment (they used to be importers of agriculture and construction equipment, now they are exporters). Now they are actually seeing profits because their products are cheaper and many of Russias customers for their goods, are developing countries.
Russia can support itself.
must kill the interferences from outside and within
Stolypin said "Give Russia twenty years free of outside and inside interference and you wil not recognize it"
Soon Russia was assaulted, prevented of freedom.
Now Russian Federation still interfered, has risen to new recognition
Russia has most everything essential inside resources
is why outsiders want control to steal
if Germany want trade, need set themselves free and deal straight
I think world sees
but leaders sold out and compromised.
What many here failed to notice, is thag the website who reported this, is being deemed false and is now gonna get sued by Rosneft.
http://en.itar-tass.com/economy/757086
Chances are, someone is trying to hurt Russia by using media. But it is sad to also state that while many EU countries are struggling and using false measurments to make their gdp look good (drug trade and prostitution), Russia saw GDP growth in September and industrial production is up.
To the guy who said this will hurt Russian citizens. No it wont, or barely. Russias main imports from west were either basic consumer electronics and industrial equipment. Seeing as how majority of consumer electronics are made in China, guess which two countries agreed with the trade in national currencies? Add to that, Russians are one of the biggest spenders when on vacation. Many countries rely on that Tourism.
Looks like it will be a cold winter in the EU.
Putin be damned, I'm buying Sberbank.
Kommersant is under CIA control.
Kommersant equals CNN.
Kommersant is as trustworthy, as is CIA.
Psyop in action.
Not really.
Here is my experience:
Western news seems to be all about what they can say when the public may not know better. What I am getting at is weatern media will say "all is good, we are fine" when clearly things are not. But get away with it because average joe does not know better and neither does a lot of stock tradaers.
Russian media is going the way of British - tabloid like. They will state anything as long as it will get them his. Doom and gloom is a very popular concept in Russia and other eastern countries, and it sells. Izvetia used to be amazing but they gone the tabloid route too. They dont have to be foreign owned to be garbage. Many will make up a rumor to sell. Unfortunately for us, is that it can hurt our economy in the stock trade. But it can also turn around and hurt them if they get sued. This is twice now Rosneft has been hit by media with lies, and this will be the second lawsuite from Rosneft against media outlet.
Russian stock market has been volitile for a long time. When it is driven by pure speculation, and how hard the west is trying to discredit them, no one in Russia can help prevent it from fluctuating. Even if it was a glorious paradise and they were blowing obama. Same thing.
Edit. Sorry, dbl post.
lol zerohedgers, when UAH was tanking then it was because Ukraine is going bankrupt etc, now that Ruble is down 30% vs USD YTD then its all ok, local production etc etc. You guys are too funny, must be all that RIA and RT propoganda :)
Would be nice to see Russia crash the same way as USSR did due to low oil prices and them *thinking* that they can compete with western countries when 70% of their export is OIL/Gas lol.
Your knwledge is either based on being a troll or you are ill informed.
Ukraine has an economy that relied on sales of its prooducts to Russia. On other scale, its land belongs to UK since early 90's when they sold it for next to nothing.
Russias main export may be oil and gas, but that is because of the volumes traded. Russias biggest economic drive is domestic consumption, not its exports. Russia has a large industrial production to fall back on, and a lot of countries interested in her products. Ukraine on the other hand does not have sich luxuries. Actually, the ruble fallinge means higher output and more sales. I have already explained this amd provided evidence on more than ome occasion. Much like how India managed even when the Rupee dropped to 61 per USD.
Ukrains case is that they lost a lot of industry, key ones like electronics and power tools, when Crimea left. The other issue isnt the lack of value, but the lack of trade. Russia will also face that hardship if EU cuts gas consumption. Russia cut trade with Ukraine for some of these industries will spell the end for them (motor sich). Russia still has Japan, China amd Vietnam who are big buyers of Russian gas and oil. India will soon be added to that list. Many poor and developing countries will turn more attention to Russian end products due to them being cheaper for same thing (agriculture and construction equipmemt sales overseas are up). Ukraine lacks these industries.
In the end, Ukraine can also survive as they have coal and what not. But they are in a bad position due to lack of an industrial base. Early 90's they were far better off than now, till they sold their enterprises for next to nothing.
good post
more Ukraine needs rise up and reverse illegal sales Oligarch criminal made to their own...
get lost goat
New developments of Ukraine:
http://vineyardsaker.blogspot.com/2014/10/something-very-very-interesting-has.html
Radical proposals include a sudden, very large and very public purchase of gold using US dollar reserves.
http://i2.cdn.turner.com/cnn/dam/assets/120224044042-vladimir-putin-gun-...
Click your heels three times and press the link
Russian demand clambered up to an all-time high of 3.8 mb/d in August. Not only was this 115 kb/d (or 3.2%) up on the year earlier but it was also 55 kb/d above our prior projection. Strong gains in gasoline, jet/kerosene and residual fuel oil offset absolute declines in gasoil and naphtha
IEA Oct oil market report.
The european entrepot post 1990 has been structured to take previous Soviet military energy inputs......
If this changes and we go back to the future - then the present european Industrial supply chain is Kaput.
Russian oil demand is currently 400 KBD above the 5 year average.
That means 2 celtic tiger irelands less oil to burn in Euroland.
France had start better looking South to Spain rather then east to Germany.
Germany now has currently nothing to offer but cold winters and cars without diesel.
France can supply much of its basic needs in Summer
Nuclear power is adequate and spring ice melt feeds its Hydro in the early summer..........
Food is not a problem in France.
Winter on the other hand............
Málaga experiences the warmest winters of any European city with a population over 500,000 and over 100,000 jointly with two other cities in Spain: Almería and Alicante. The average temperature during the day in the period December through February is 17–18 °C (63–64 °F). During the winter, the Málaga Mountains (Montes de Málaga) block out the cold weather from the north.[
http://en.wikipedia.org/wiki/M%C3%A1laga