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Oil Producers' Currencies Are Collapsing-er
Despite numerous interventions by Mexico, Russia, and Nigeria, the free-fall continues in their currencies. The Russian Ruble is the poster-child (down 40% since June alone - testing 58/USD today) but the crash in Mexico and Brazil is accelerating in the last week. Default risks are surging for all of the Oil-Producing nations with Russia topping 450bps (5Y CDS) .
Oil Producers currencies are collapsing...
More so Russia...
And default risks are becoming real...
Charts: Bloomberg
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Who knew that the new "one world" currency would be the FRN...?!?!
/s
But a strong dollar will just kill our exports.
:)
pods
currency wars
We can just print more oil
http://y2u.be/VI6tBwVjyOY
Okay. All this happens because some Saudi says, "We're going to print more oil."
Now, even though I'm not at all sure why the Saudis are printing oil, this *is* costing them money, so at some point, that Saudi is going to say, "We're going to stop printing more oil."
So how will I know when it is time to acquire as many Rubles (or other Ruble priced assets) as possible?
This is all just collateral damage in our glorious fight against those evil Rooskies.
<All together now. "We hate Putin".>
/snarc just in case it wasn't obvious
Your friends to the north and their Loonie is getting punished.
Yes pods, we export inflation, in this case it will be quite good for our only export. I wonder how the vast majority of the world's population are going to take this news...
Go long Bread Helmets again. We like to use the SALT method.
Same As Last Time
pods
astonishment? shock? oh, wait...
This is playing out exactly as it was given years ago. There could be no other way as a "flight to safety" wave will grow and then discombobulate. I need a scorecard for the next inning which should involve a shooting war.
If this wasn't going to be so painful it would be fun to watch. The fuckers in DC dancing in the ballroom of the Titanic right after hitting that big chunk of ice. Almost surreal. You have to pass the 1600 page spending bill (how could something that massive be "last minute"?) to see how you're going to take it up the ass for one more go around.
Spending time with my wonderful family, it's movie night. Fuck this crazy world.
What is basic in the structure of US exports?
Export US-dollars.
A strong dollar can't compete with the eports of financial FRAUD.
Everyone thinks this is goign to be 2008 redux, but it seems to be setting up for a 1997 like global currency/liquidity crisis.
Perhaps another Big Bank (or three) is the real target? One that is overleveraged on the wrong side of a currency or oil?
Consolidation to begin at the top perhaps to better control the coming (intended/planned) crisis/circus.
Because if this continues, first some funds are going to yelll uncle and then some banks are going to yell uncle, then some countries are going to yell uncle, in that order.
Because if this continues, first some funds are going to yelll uncle and then some banks are going to yell uncle, then some countries are going to yell uncle, in that order.
+1.
Maybe some taxpayers are going to yell uncle.
Yup. Just add it to the list.
We Uncled some folks.
Damn, I never get tired of that one.
Never grows old.
True, but some of the countries are not going to yell uncle. There will come a day when even the most timid gets to the point of "enough is enough". The calculas changes and that's when things get really interesting.
Wonder when that is and what straw will push them over the edge?
Kudos to Jim Willie......you crazy lil bastard.
Listened to J Willie last night, actually, and was a bit surprised to hear him shoot down the "Get Russia" scenario right off the top.
Very deep game going here, with SA in the middle.
CDS is a "concern" you say? Okay, trigger a CDS "event" motherfucker, trigger just one CDS event!!!
Heh heh.
Sweet... as if TJ hookers werent already cheap enough! Exchange rate baby!
They are playing with Fire, I guess they forgot that you can get BURNED
Dollar to Rise…Right Before it Dies!How much?
So what is the prevailing opinion on why oil prices are collapsing? I can't believe the collapse that much and that fast just on supply and demand. My thought is it is and economic war against Russia, trying to drive down prices to hurt them. Any thoughts?
Isn't that obvious ?
Big money ala George Soros style betting against RUB at 10X leverage to "punish" Russia for not submitting herself to the West Kabal.
Saudis punishing the US for its failure to take out Iran. Oil in dollars for protection no longer working. Saudi's now fear Putin alliances with Turkey, Iran, Pakistan, India and China. EU breakup in progress with NATO unable to do shit about to protect Europe. US is quickly becoming irrelavent and along with it the USD. Fun times are here.
Saudis trying to maintain market share and outlast the others. Not "punish." They're too pragmatic, or greedy depending upon your preference, to care about sending a moral message.
That is how it started. Now the leveraged oil traders are receiving margin calls as the current value of oil is insuffient collateral for the associated debt the traders have incurred. They are forced to sell, which in turn drives the price even lower. The price will continue to drop until all the traders and speculators are driven out of the market. At that point, the price will stabilize, until the shale oil and frackers are shut down, reducing global production. Then prices will rebound. What the time frame and the settled price will be is anyone's guess.
"What the time frame and the settled price will be is anyone's guess."
Yes. But ...
If one could just be kinda, sorta not completely wrong in guessing, one could generate generational wealth. Even someone of modest means.
Back the ruble with gold already!
Putin needs to leverage up his bets for a strong ruble, using the Western financial systen - then back the ruble with gold. He would make a fortune for Russia while collapsing the Western banks that are speculating with US taxpayer backed derivatives!
The Colombian Peso is tanking too...good for me..beers are cheaper....
Right time to back the rumble with gold. And the peso with silver. CME is ready. Are you? ????
The over-levered WORLD oil producers sub-prime contagion is contained, repeat contained, we don't expect this to spread to the broader WORLD economy..
Don't mind those derivatives...either, in fact, they are actually worth something now that you jagoffs are on the hook for them...
what about the socialist utopia Venezuela?
It's a win, win, win for the Obama Admin. First, they get to punish Russia and Iran. Then they get to hurt "Big Oil" which is always part of the dem agenda. Then they get to curtail fracking/oil sands which in their twisted minds will help save the earth from climate change. They are partying and toasting to the great oil drop of 2014 as I type this. Three cheers!
stateside
got a hold of some old school Libertad's yesterday from the LCD...nice and shinny...
just sayin.
German and other euro countries relocation of car plants to Russia could be the big losers given long and external supply chains.
The Renault owed Lada plant which is the last verically integrated plant in Europe / Russian probably a big winner.
Russian oil demand ha not crashed yet and indeed it is at all time highs.
Its all about cash flow and not really about the stock.
In euro land however the opposite is the case.
The powers that be have stopped all flow dynamics to protect the stock of claims.
Bullish for USA! King Dollar! Or as Larry Fink put it yesterday: "The most important thing is ... this is a massive tax cut for the world, this is really good stuff for the world"
REALLY GOOD "STUFF"! So don't always be so negative, Tylers!!!
KING RAH RAH!
we need more synthetic debt
I doubt that CDS on Canadian bonds would be rising. The bond market is stable with rates lower than the U.S., with the notable exception of treasury bills.
Canadian gold mining stocks are the most heavily shorted stocks on the planet, bar none, so you would want to invest in said jurisdiction where the bond market is stable, the currency won't go into a crisis, and that they produce oil.
http://web.tmxmoney.com/index_constituents.php?qm_symbol=%5ETTGD
Look at it from the perspective of non-US dollar debt. If you take out debt in a local currency and sell product in US dollars a strong dollar may help your balance sheet.
Even if you own US dollar tresuries or bond funds it may be profitable to hold it, rather then local bonds.
A strong dollar helps China, Japan and Korea. India and other commodity exporters may not benifit as much, or lose out entirely if they have US dollar loans.
Has Saudi currency been experiencing the same issues as Russia, Mexico and Nigeria? If not, why not?
Saudi currency is on par with US$ and Canada currency is the US$ cousin.
Oh happy day, this means I can buy more with dollars that I don't have.
in short: USD vs BRICS
Short Riyal. De-peg.
Now lets deploy some heavy metal and kill people!
They don't need to care that much about USD exchange rates as they leave the USD system. Russia is probably doing it on purpose to maintain oil prices vs the Ruble, or at least allowing the US to shoot themselves in the foot doing it. They are creating a seperate financial sphere. Every time Washington thinks they are winning, they are losing. Is there inflation is Russia? Yes. But their exports are now super competitive while the USA's fake exchange rate is nothing but banker ego at the expense of everything else. And the Russians can set their exchange rate anywhere they want due to their forex reserve surplus. It is no different than how China controls the USD exchange rate in their country because they actually have an economy that generates tons of foreign currency.
The hardest hit is the USA. And no matter what the spin is from the MSM, the numbers say our oil sector is the one on the losing end of this oil price move.