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The Sellside Reacts: "17% Rate Hike Not Enough" According To Citi, JPM; Goldman Positive: "Removes CBR Uncertainty"
Two short hours ago Russia shocked everyone with an unprecedented rate hike sending the nation's various interest rates some 650 bps higher. Well, according to the initial sellside responses, as shocking as the move was, it is not nearly enough.
Here is Citi:
Many market participants are looking at Russia’s hike from 10.5% to 17.0% and saying “wow”.
However, speaking with one of our senior RUB traders, the move is likely not aggressive enough for the medium-term. “Hiking the key rate to 17.0% is not enough to get a hold of a currency that can drop 10% in one day,” he says. “On top of that, the FX repo size needs to be much larger than it is at the moment…however, the hike might give RUB a few days of breathing space.”
One wonders just which "chatroom" Citi's FX traders decide what the fair value of the Rub(b)le should be.
And while we wonder, here is JPM which already appears to have exchanged notes in chatroom XYZ with Citi:
The rate hike occurred after today's 10% depreciation of the RUB despite attempts by the CBR to intervene earlier in the day. The decision was aimed at "limiting substantially increased ruble depreciation risks and inflation risks" according to the CBR. This emergency move suggests to us that household deposit dollarisation had increased significantly (official October data had already suggested dollarisation re-accelerated again). Tonight's large rate hike should in the short term help to slow retail dollarisation demand. However rate hikes do little to help the underlying demand for USD from corporates and banks who continue to front load their demand in order to apy their FX debt payments further down the line. With limited access to USD funding markets and oil having yet to find its bottom, the perceptions of local banks and corps on RUB continues to be negative, fuelling this hoarding behavior. In this context, there is a real possibility that even such a significant rate hike may not be enough in the medium run to stem RUB depreciation. The central bank in our view needs to announce a package of measures alongside rate hikes which also aim to lam local fears of USD scarcity. This will most likely involve making available a sizeable amount of FX reserves (we have suggested around USD100bn in our piece) through a combination of deposits in state banks and the CBR's existing repo facility. The CBR however continue to be unwilling to commit their FX reserves, with their focus still primarily concentrated on defending the sovereign balance sheet. As part of a package of measures, the CBE may also look to cap local bank open FX position limit down from the current 20% of capital as well as raise FX RRRs to help stem deposit dollarisation. Further pressure can also be put on corporates to convert their FX proceeds faster.
Bottom line: expect the market to react positively to the rate hike in the short run, but further measures are needed from the CBR for us to turn more bullish on RUB in the medium run, particularly in the absence of improved geopolitical risks and higher oil prices.
But Goldman is less negative on the move: "The decision clearly removes the uncertainty over the CBR's strategy that in our view was a major driver of the recent Ruble volatility and hence is positive. "
What happened: The Ruble traded above Rub72 vs. the basket and for the first time sharply outside our fair valuation metrics at current oil prices. Similarly the Ruble price of oil, which underlies next year's budget (Rub3700/bbl) and is closely tracked by the market, moved to its highest level yet. This was despite the oil price being fairly stable on the day and no significant news around other risk factors. The CBR responded to the sharp Ruble move post Moscow trading hours by raising its key rate from 10.5% to 17%, raising the key rate spread for loans against non-marketable collateral from 25bps to 175bps meanwhile extending their maturity by up to 18 months, though the wording of the CBR's publication is quite unclear on the latter point. Additionally the limit for the 28-day fx repo auction was raised from USD1.5bn to USD5 bn while the CBR also announced that it will hold the 12-month fx repo auction on a weekly basis. This policy response of raising the repo rate to fight the Ruble is against our expectations of the CBR likely to allow much higher interest rate volatility through tight liquidity management and we put our forecasts for rates, growth and inflation on hold and close our conviction views of being constructive on local fixed income assets and Russian credit. The decision clearly removes the uncertainty over the CBR's strategy that in our view was a major driver of the recent Ruble volatility and hence is positive. The key will be, to what extent the market believes that this strategy is credible given the likely impact on growth and the funding cost of the banking sector.
Why has the Ruble been under pressure? Fundamentally the Ruble is under pressure from sanctions and lower oil prices, and we have laid out our fair value model here (see CEEMEA Economics Analyst 14/35, 17 Oct. 2014). In our view the Ruble has recently been under pressure mostly from expectation-driven local flows. While the sanctions have been a major factor in the weakening of the Ruble earlier, we think fx liquidity in Russia is now ample despite the sanctions. This is very different from 2008/9. The banking system remains a sizeable international creditor (unlike in 2008) and even the corporates' net short-term external debt position is sizably positive, i.e. they hold more fx cash than required for debt repayments in the next year. Not surprisingly onshore short-term fx rates are close to zero. Instead, the private sector is continuing to short the Ruble with expectations heavily driven by falling oil prices. In our view this ultimately required decisive action from the CBR to raise the cost of these flows.
What triggered the recent sharp sell-off?: In our view the destabilization had been triggered by confusion about the strategy of the Central Bank. Uncertainty about where the oil price will ultimately stabilize remains high and hence the CBR can in our view not aim at stabilizing the level of the Ruble. However, it needs to ensure that excessive Ruble volatility does not destabilize expectations and potentially the financial system.
We thought this was best achieved by keeping Ruble liquidity very tight through unsterilized interventions. The cost of that strategy would have been to accept significantly higher short-term interest rate volatility, something that the CBR worked hard to dampen in the last few years. The alternative in our view and the one ultimately now chosen by the CBR has been to raise the key rate to a level where it becomes prohibitively expensive to borrow. We thought this would have been the less preferred option due to the economic costs likely to be involved and the pressure this puts on a weak banking system. Another possibility was clearly some kind of constraints on the ability of domestic agents to invest into fx. However, the latter had in our view been credibly ruled out by the authorities and this assessment is confirmed by today's rate decision.
Against the above, the CBR's signals had been difficult to read. The CBR raised its key rate last week by 100bps, as before arguing that it would use the key rate to stabilize inflation expectations. This was largely in line with our thinking, though we had only forecasted 50bps, but clearly far less than what short-term market rates were pricing.
We had forecasted that the CBR at the same time would signal very clearly that it would use liquidity measures to stabilize the Ruble instead and potentially widen the interest rate corridor. However, the CBR did not give any clear guidance apart from the fact that it extended the quantity restriction on the fx swap facility forward in time (the only lending facility that has essentially an almost unrestricted collateral pool, given the amount of fx held by the banks).
With access to the fx swap facility restricted, the way to manage liquidity would have been to allow the restrictions set by the amount of eligible collateral in the repo operations to become binding. This would have easily happened if the CBR intervened in the market without adding to the Lombard list. However, instead the CBR added a large private placement of bonds by a Russian corporate to its Lombard list, expanding the pool of collateral by close to 10% on our numbers. This effectively seemed to signal that the CBR essentially wants to restrict interest rate volatility and instead is willing to accept sizeable fx volatility, which the market duly delivered today.
Today's rate decision now signals that the CBR is willing to use the key rate to limit Ruble volatility while keeping interbank rates close to the policy rate, i.e. it is the most orthodox approach to monetary policy. This will in our view lead to a sharp sell-off in the local bond market, which is anchored by the key rate and where the yield structure depends on expectations of the future path of the key rate. While arguably today's sharp move should flatten the curve or even invert it, this largely depends on the market's perception of the credibility of the move.
Why such a large hike? A 650bps hike is very large by any metric and is more than the market expected (short-term rate expectations had fallen back to 11-12% from above 17% post last week's rate decision judging from the FRA's. Thus the decision is largely in line with what was priced in prior to last week's rate decision. We also believe that given the limited transmission of policy rates to deposit rates in the banking system, any interest rate based response to the Ruble needed to be outsized to have a meaningful impact on the attractiveness for resident households and corporates to hold Ruble assets rather than fx.
What are the risks? Today's decisive rate hike clearly removes the uncertainty about the CBR's strategy and signals that the CBR is now willing to defend the stability of the Ruble. The decision should also alleviate some concerns about the political independence of the Bank. The risks now mostly are about the ability of the economy and most importantly the banking sector to withstand this shock to their funding cost. Unlike in 2009, a far larger share or in our view around 10% of the banking system's balance sheet is now linked to the key rate, thus today's rate decision has a meaningful impact on the funding costs of the banks. While much of their assets are at floating rates, the impact on their bottom line will in our view be sizeable either directly or through a deterioration in asset quality. For this reason, in our view, the impact of this large emergency rate hike on Russian credit spreads could ultimately prove to be negative.
So get to work, Mrs. Russian Chairwoman, unless somehow the ex-KGB spy is prepared to make good on his recent threat to personally tear off the heads of any and all FX speculators found to be short the RUB.
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I was wondering who would squawk first. Now you know who just got hammered by the Russians.
its called chess......except this game is for life or death
What, then, is enough? Not a word.
What, then, is enough?- Give us oil for free and became vassal state
Precisely. Nothing is enough.
All manner of logic has failed when a low debt, resource rich sovereign offers 17% return and is rejected in favor of debt laden, resource dependent sovereigns offering near zero or negative rates of return.
Exactly why I choose to self insure with shiny.
If I could get 17% at my local bank, I might consider giving them some capital.
Russia will survive, but the economies of the central states are going to be eviscerated, which means the people there are gonna hate DC at least twice as bad as they already do.
"I was going to load up on Rubles but now that Citi and JPM don't think the CRB has done enough, I will shun the RUB and stay long the USD," said no one ever.
Russia needs a good old fashion Bail In
Putin asked everyone to pretty please bring their money back to the Grand Duchy of Evil.
Buit nobody wants to play chess with him.
You should ask langley to pay you for commenting on something else besides Russia. It might build your credibility and help your propaganda effort...
Quite frankly, Im getting sick of these fuckan FED, .gov and Wall St trolls like "tarabel" that have infested this site.
These pathetic assclowns are really over the top.
Golly, Wally, does free speech really hurt your brain that bad?
No, not at all. I've wiped my ass with far better trolls than you the last four or five years around here.
Um, that's not normally where people keep their brains, you know.
Nobody ever said you were normal
One person did, but they were wrong.
Okay, everyone,
My shifts over so I'll catch you all tomorrow. Ought to be an interesting day in the Grand Duchy of Evil as they scurry around trying to make this all go away. probably a lot of other interesting data dumps tomorrow as well, dontcha think?
GMC, baby.
When you gvorit this: "the Grand Duchy of Evil", do you mean the US or EU?
The rump of the former Soviet Union is not big enough to be an Empire of Evil anymore and is built around the territory of the ancient Grand Duchy of Moskovy.
But you're right, In this age of equal time for everyone, I should come up with a suitably disparaging name for its opponents. I'll work on it.
Perhaps your time might be better fellating Amerkan Patriot? You two seem to have a lot in common.
Or would that necessitate the ability to fellate yourself?
Wait...what?
those olympics were a good investment.
Ohhh, burn.
How much did the first two Iraq wars cost? Or do we just have a running tab now?
If the Sochi Olympics were a failure to showcase their country, at least millions didn't have to die for it.
world cup coming soon.
don't want to present a bankrupt state when the world comes to visit Russia.
Free speech? How is it free when you are obviously getting paid?
I can see you 're having trouble wth the general concept here.
You seem to have a concept problem yourself here at ZH. You dont "get it" yet at all.
Stick around....you'll wise up.
You're right, I guess I don't get it at all, Old Timer. Not that anybody is going to explain it.
I thought this was Fight Club, not Let's Vote People We Don't Like Off The Island Club. Or Let's Not Listen To Alternate Viewpoints Club.
Not even False Choice Between Fed And Vlad Club.
I want to be rid of both of them and do not feel the need to pick one over the other. My choice is neither of the above.
I've learned a lot from hanging around here and reading people's explanations about what they believe and why. Doesn't mean I buy it but it is useful data to compare other things against.
Can't say that I've learned anything from you, however. All you do is complain. No humor. No analysis. And a big sense of entitlement that makes you sound like a long-serving union sbop steward ordering people around.
You got something real to say in re the crisis at hand, I'm all ears. But please just laugh at yourself a little. It will really make you feel better. Honest.
Fight club isn't about listening to trolls suck each other off. It's about FACTS.
Fight club gets ANNOYED with TROLLS purposefully OBSCURING FACTS with Bernays like precision.
Fight club dislikes state-sponsored PROPAGANDA outlets like YOU.
Funny, cuz you only show up on threads about Russia, full of semi-factual, purposefully misleading information, and you answer EVERY FUCKING COMMENT.
What's notable here is you ackowledge the threat to the private banking monopoly that Russia poses by breaking the petrodollar.
What is it now that gives the petrodollar it's power? FORCE. Military force. Death and destruction. Now that a bigger country is making deals outside the petrodollar and can't just be bombed away, paid USSA/hasabara trolls switch to character assassination of a strong leader to sway opinion so the public remains just complacent enough during the upcoming regime change.
Problem is, some of fight club is just factually aware enough to see through your facade. The new Tylers may have struck a deal with the devil (or may be the devil themselves), and fight club may be spammed with propaganda (the likes of you), but fight club cannot be killed.
Fuck you troll.
+1
hey tarabel, did you learn something on this comment dickhead?
Really, it's quite lonely being the sole non-governmental voice around here. Will you be my friend?
You'll have to do better than that. Now that your outed, will you start a new account or be promoted?
No, sad to say, I'll have to stay right here as I am and fulfill my six figure contract.
But will you be my friend anyhow even if we are on opposite sides of the keyboard?
I get free Mountain Dew for working the night shift and I can score you some.
You're so bad at it I almost feel sorry for you.
Come on, Gaius. Show some originality. Contribute a unique thought to the discussion. I don't need to see your twitter feed about your feelings. Say something that matters. Break free of the bonds of trite modern expressions and actually think. It's not hard. Okay, it's not hard for me.
But of course the Okhrana brigade will reward you for saying anything detrimental to me, no matter how insipid the phraseology is because I must be stopped and I must be silenced. Can't let these disparaging remarks about the great Grofaz II pass unchallenged.
Tell you what. You've got 2 upvotes for your sage contribution. Now you have three. One from me.
Because I'm still willing to be your friend and score you some sweet Dew. I'll even share one of my beta-test Dews.
Are you guys allowed to telecommute, or do they still make you go sit in a windowless office?
Galus, just stop feeding this monkey punk "Tarabel"; it just feeds on its own bullshit and overtakes the whole friggin' thread.
The more anyone replies the more the troll grows, then its buddy trolls turn up to support it and it becomes a psycho dumbfuck trollfest,
cheers
You hear that, Gaius? Your boss wants you to lay off.
I'm pretty lonely for having a gaggle of trolls at my beck and call. How many votes you got on your side of the troll army ledger compared to the votes from my army of trolls?
GMC, baby.
Ridiculous comment..
You'll have to be more specific.
He didn't ask them to bring their money back to the Grand Duchy of Evil or he didn't say pretty please?
He said youre a little pussy who's soon going to be ate
There is no logic when the scoundrels of Wall St are allowed to rape and pillage the world at will.
But hey, lets all bash Putin and Mother Russia for this situation. Just like the Ukraine, Syria, Libya, Iraq, etc....
THEY CRIED WHEN STALIN DIED!
I repeat....
THEY CRIED WHEN STALIN DIED.
I think I totally understand what Putin is doing. And I totally understand why he has a 90% approval rating. As the Russians say
"People fear us because of how we treat ourselves." That prevents no one from admiring this ethos. Has the West ever successfully invaded Russia? NOOOO!
But is America being "sneaky and underhanded invasion"? Leaving aside the fact that no one...least of all the United States would want to invade anybody after thirteen years of butt whooping in the Middle East...I really can't think of any reason. Still..
Let's call this halftime and review the score:
Russia gains Crimea. They pay with high inflation and unemployement for the masses. We should assume the rich knew to move into hard assets.
The US loses most of the shale industry and some junk debt. Longer term they risk losing the petro dollar, as the Brics move toward a competing monetary system.
I'd call it a draw short term. Longer term the US and europe have hurt themselves. It will suck to be a Russian worker for a few years, but they had to stop Nato pushing at their borders.
yep, if you're 75.
.
Mother Russa...
Hmm.. Highly Interest...ing
If Russia had raised the interest rates to %30, I'm completely certain that they would still say " It's not enough ! " . Now Russia has the highest rates with low debt, but it's still not satisfactory to some. War against Russia continues.
It's only enough when Soros and the rest of the criminal financiers stop selling the rouble short.
Vlad can play chess...if someone will spot him the money for a board.
I implore you, loyal Zero Hedge readers, send Vlad dollars via Western Union NOW - he desperately needs them!
Right after you pay of the $18 trillion US debt LOLOLOL!!!
I will! I will!
Russia is the investment of the decade and the lower it goes the better it gets. You go right ahead with your buy high, sell low strategy, I'm on the other side of that. :)
The ruble was 55/$ on Friday. It was 65/$ today. If it "soars" all the way to 55/$ tomorrow (unlikely with only 17% rates), all those "hammered" shorts will be back to where they were......Friday.
Rosneft claims they didn't puke out last week's 625 billion ruble bond proceeds to buy dollars (to pay back foreign borrowings). Sure. The market certainly didn't buy it.
Puti's a funny guy. In the same speech he accuses the West of trying to undermine the ruble, he offers "amnesty" to oligarchs who dumped rubles and expatriated them. Obviously he doesn't even believe his own propaganda, and knows who is actually behind the rout. His own oligarch peers are deserting.
Shorts might materialize now, after seeing a 13% day. What the heck is 17% per annum in a currency that has proven 13% DAYS are possible? Easy to cover 17/365% daily vig when the underlying has the vol the ruble now has. 17% just puts a target on the ruble's back. They'll need 50% or 100% eventually, maybe 200%, just as they needed in the 1990s before Russia defaulted.
I'm sorry, sir, but you are making sense.
So I'll have to escort you off the premises for your own safety.
Waiter, comp Mr. Wingate's check for him.
It's funny watching a popular Zero Hedge meme blow up today.
"Putin is a competent leader and he will steer Russia to prosperity."
B - O - O - M !!
I think of it as an entire coven of junior-grade secret policemen trolling each other in the child molester chat rooms.
LOL 3 child molesting trolls circle jerking
Putin is trying to bring capital back to Russia. The oligarchs already moved (a long time ago) their capital OUT of Russia.
17% interest, if it holds, for a low debt and resource rich country like Russia is a BOLD move.
The US can't do anything like that. It used to, but not now.
And, as I posted elsewhere, this isn't the first move. Putin/Russia is going after SWIFT and they will commodity back (to some degree) their currency along the way. All already in the pipeline.
Do understand that you can borrow UNLIMITED Yen at 0% (if you are an insider) and short the Ruble into oblivion, despite fundamentals. Will be a shit show to see which derivative bearing banks, which recently hedged with US tax payers, get their asses spread open like a TG turkey when Putin calls them and capital flows reverse.
This is far from over and I am not putting chips down, I am small fry and as I tell my old man, "there are not old small fish". I am just hanging on to what I got. But I see this train a'comin. I am trying to GTFO of the way.
Regards,
Cooter
Can you spell LTCM?
Are you old enough to remember it?
This will damage the US Economy mortally you stupid imbeciles.
Yes you are shallow enough to see the destruction of Russia. But you do not, and are abosolutely incapable, of seeing the deeper and unintended consequences.
You are as foolish as a Kamikaze Pilot on his final mission.
You seek to destroy others even if the result is your own personal destruction.
I will enjoy YOUR collapse as you've earned it, chindit13, tarabel and Amerikan Patriot.
To those whom still have any hope that there are Political Solutions...
These psychopaths are demonstrative that they will destroy themselves to see their objectives realized. They are NO DIFFERENT than your Central Banksters and your Government Officials.
It is in your best interests to distance yourself from these self destructive personalities, or, those like them. They care not about themselves and will wreak havoc upon anyone else near them. They lack all conscience and have no guilt or remorse for damage which they impart upon others. (It is rather sad.)
THERE ARE NO POLITICAL SOLUTIONS as these DEMONS have infiltrated the highest ranks of Corporations and Government.
Like US Naval Gunners, in World War II, that shot those Kamikaze pilots out of the sky to protect their ships, I also reserve all rights to self defense.
Agree chief.
All these patriots are literally enabling the people up top to march us into an economic collapse, and potentially military conflict.
The Russian PEOPLE have my condolences for becoming collateral damage in this game, and I hope they realize the same as our economies go to shit. The politicians are as they ever are: marching cheering dumbasses toward their doom, to the sound of patriotic diatribe.
They've done it in the past people. Profit for blood and conflict. Don't be so naive as to think that this policy is doing anything besides enabling excuses for war
Well, fella, you missed the point. I also think you're caught in a Putiporn love haze.
As Putin himself said in not so many words (amnesty for expatriated capital by the oligarchs), he knows why the ruble is crashing. The rest of his speech was just to appease and fool the masses.
As for LTCM, please tell me what gaggle of Nobel Prize winning HF managers are wildly long Russian paper, as they all were in 1998? Back then that was about the most crowded trade one could find, and a whole lot of folks forgot what the meaning of "liquidity" was. Oil might cause some HFs some pain, but Russia is just kind of a bit player in international capital markets now, and what capital the country does have is controlled by the oligarchs, and they already voted. You really do not seem to have any understanding of the forces at play.
Anyway, don't cry for me. I'm always okay, and I'm positioned pretty well for what's coming (and no, I don't think what's coming is pretty, so no schadenfreude for you). Call it luck, but I've been following a game plan for my entire adult life, and blind squirrel that I am, I've been finding nuts, and storing them, the whole time. You see, I'm one of those guys who actually did, inter alia, buy gold in 1999. Longest trade I ever held. Sold in 2011. Yea, just lucky. Lucky is okay, though. It's better than the ego all of you guys bring to the game as everything you predict never seems to happen. Confidence is good, ego not so much. Read through five years of ZH comments and you will begin to appreciate the difference.
You guys all act like this is a US election, that one is either a Blue Stater or a Red Stater. It's either Puti or the West. You cannot seem to grasp that there are those who declare a pox on both their houses. You all think you are contrarians, but you are just sheeple of a different wool. You seem to need to belong to a team, rather than go it alone, being truly independent of thought and action. I could quote Jamie Dimon here, but that would be grandstanding. What I might say, even if I suspect it is pissing into the wind, is 'use your brain'.
Oh, and would you like to see how "prescient" the prevailing opinion is here on ZH? Read the comments in this thread and check the time stamp. Now go see where the ruble is as this note is posted.
Now here's a little secret: when I am in doubt, I come by here and test the wind, then I fade it. It's uncanny. My "buy" signal for PMs is probably going to come from here, too, when all of your trucks run out of gas or that back-up beep signal goes dead. Don't fail me now, ZH!
I harbor a guess that without question you are the most full o'shit poster this board has ever seen. And that is saying quite a lot. Ah well, entertain yourself. Not much else for someone such as you to do.
As much as I appreciate superlatives, the bar simply is set too high here. Toss your own hat in the ring, though. You seem to have a chance.
You are so perfectly representative of all that became wrong with this site. You act as if you know things, and absolutely overlook that reality that every single thing you have championed has been dead wrong. You also cannot fathom that anyone could be a fan of neither side. Let me again recommend Charles Mackay. He's talking about you.
Give it up ace. I know your tune. Always defending the indefensible entities of control, subversion and misdirection.
My investments have done quite well. No complaints. Not looking for a hero, as I try and be my own hero as well as coaxing to the service that within others in my life, the first step of which is finding truth in the weeds, something you seem to be actively working against.
As far as the world scene, we are certainly at a crossroads with the majority populace of the sinking boat of a system we are on running over to the "Russia is evil, sink Russia, sink Russia" side, which you are as well championing, not knowing all the while the you are simply serving the purpose of those who choose to sink and profit from the sinking, most likely via nuclear war. So enjoy your self-absorbtion. Just know that more and more of the populace is waking up so you may be needed more and more to spread falsity.
Sure you did well. Sure.
Try to be your own hero? Well, at least your life will never be without challenge.
Retired at 45. You're still shoveling the shit at what age? Adios, more important things to focus on.
Clearly you are a very very great man. Will Durant would have included a chapter on you, had he known. Best of luck with those 'more important things'. Gassing up the G650, no doubt. I'll look for your chemtrails. Oh, and keep your transponder on and squawking. I don't want any accidents.
Gym actually. I leave the gulfstream-owning fantasies to people like yourself.
You should spend more time on the weights and less in the locker room.
I leave the locker room stuff to you. Toning is the stage I am at. Enough muscle mass.
Your icon. A rabid zionist. To the core. Probably a mass murderer as well. Does this explain your abstract hatred for Russia and Putin? Are you too a rabid zionist, with a bloodlust to let your bolshevik relatives once again run rampant through the country, raping and pillaging? Come clean chindit, and let the ZH readers know your true agenda in defacing ZH.
Damn, you are full of yourself. "Enough muscle mass", retired at 45, self-proclaimed great investor, being your own hero. You must be one of those metrosexuals, right?
I'm going to go out on a limb and guess mirrors are your favorite decor touch. Look into any one of them and you'll see the defacer of this site, or at least its species.
By the way, forgive my skepticism, but is this you:
http://www.zerohedge.com/news/2014-12-16/17-year-old-trading-genius-who-...
Actually only mirrors are in the bathroom. So, you are the outed zionist I thought you were.
That link is no doubt your son. If you were man enough to procreate.
Assalaam aleikum wa rahma^ Ullahi wa kul 'aam wa inta bekhair.
That ain't kosher, fella.
Best you stop tossing spaghetti.
Blah Blah Blah. Give it up dude.
Hey, when's your autobiography coming out? With all of your claimed physical and investing prowess, I'm thinking you should change your screen name to Infinite ME.
I am sure that one is copyrighted by you, mister: "When daddy was an ambassador......."
Why are you even here now, at a site that you openly scorn? Your self-image of infinite superiority must be increasingly damaged by having others lowly opinions inflicted onto you. I am sure there are more inflated sites out there for you to hold court at. Try the FT.
Unless I am mistaken, you have some whackjob views on Sandy Hook. If that is you, I'm going to make you an offer. Give you a chance to prove yourself and show off your work in the gym.
Give it up dude. Edumucate yourself for the coming new year. It will vindicate your soul for the afterlife.
http://www.veteranstoday.com/2014/01/07/top-ten-reasons-sandy-hook-was-a...
So you ARE a whackjob. Well, here's your offer:
Go to Newtown for a week. If you've had the bad sense to reproduce, bring the maggots along. Eat all of your meals in public places, take lots of walks around town. On the jackets of your entire party, mutants included, the words "Sandy Hoax" and "Nobody Died in Newtown" must appear in large bold letters. I'll foot the entire bill; contact Tyler for payment instructions. And hey, since you retired at 45, it's not like your dance card is full.
Come on, here's your chance to prove your "education", as well as prove you're the macho guy you pretend to be. If your "research" is correct, the long-suffering good people of Newtown will spot for your drinks, and if you are wrong, well, the evening news will be worth taping. Otherwise, you "give it up, dude."
Lol. Go to a town where millions were handed out to the crisis actors, including the local police and fireman and challenge their cash cow.LOL. Look what they did to Wolfgang Halbig when he went to ask questions. Do your research and drop the whackjob inferences. It just proves you to be unwilling to move out of your bubble. Start with the article linked and also Wolfgang Halbig. Get back to us in the new year.
Man, you whackjobs find a spin for everything. Let me run your post through Google Translate........
"Gutless Whackjob"
All that gym work, and you're just Richard Simmons.
Ha. Mister Courageous. Afraid to even inform himself of something that deviates from what his handlers want him to know. Hate to break it to you, but there really is no Santa Claus. Sorry. Hope you recover quickly. Merry Christmas. LOL.
Richard Simmons.
Your idle, I am certain. Adios loser.
And "your" Richard Simmons
Far from it. He's more like you, jewish, squirly, obnoxious, and probably equally uninformed. Now, hurry off to your sodomy club. Can't be late boy.
So you did look in the mirror, Richard. See, I knew you had that metrosexual narcissism thing working.
If anyone is the epitomy of Narcissus, it is you with your endless, pointless, arrogant, bloated posts full of contrived feeble attempts at relevancy.
The sad thing for me is that I've actually wasted time today engaging with you, a bolshevik shill who is pining for nuclear war with Russia. A mistake I will not make again.
You know, Richard, I’m an Arabic speaker, so I had to look up this “adios” that you keep using. I’m not sure you know what it means. Maybe that can be your education, Richard….learn Spanish. It isn't as if you've learned anything of value from your "internet research", except how to speak like a whackjob. Here's your chance to make up for a multitude of sins. Go for it, Richard. Maybe this site can be brought back to what it once was, before Richard Simmons and his Moonbat Brigade, with their "internet research", showed up and ruined it.
Oh, and it's "epitome". Seems you need a whole lot of education.
Yes, yes I know, epitome..... Look Moshe, you can keep this "I'm arabic" nonsense, everyone here knows what you are. Don't waste your energy as I have regrettably done today. Adios.
Richard, I’m going to sweeten the pot and help you get over your impotence and cowardice. It’s kind of a public service. Go to Newtown, per my offer, and I’ll toss in a Monster Box. Come on, little guy, you know how much you like that metal stuff! Let the people of Newtown either tell you your “internet research” is correct, or else show you in their own way just how wrong and brain addled you are.
Monster Box, Richard. Oh yea!
Always enjoyed your commentary and the willingness to express some opinions on here that definitely run counter to the common notions. To me ZH is kind of a bell chamber for what extreme right or those on end of the spectrum are thinking. It is useful just as some of the sites I get on the left-end of the spectrum are.
The sickening thing is that Putin is not behind the unravelling of Russian wealth. The US is and you squeal like a cheerleader under the bleachers having a nooner. You disgust me. People like you are the problem with this world.
You're the cheerleader, fella. You are under the delusion that Puti is better than other leaders. You just cannot fathom that some people don't need any heroes, because there aren't any.
Oh, and Puti's oligarch buddies are behind the ruble rout. Do you think his amnesty promise in his speech last week was just idle words? He knows, even if you do not.
Ignorance, of which you seem to have a full tank, is what is behind the problem with this world.
"17% just puts a target on the ruble's back"
That's the crux of this whole thing. This has nothing to do with fundamentals or an honest market, which there is no such thing. The currncy has been targeted and this is economic war. To posit that this is about anything else is periphery; they are just piling on like the vampires that they are. Economic World War III has been declared to depose the man and Balkanize the country into a Western proxy state ala Wolfowitz dream. This is the grand chess game and people are playing for the whole enchilada. The problem is that one of three things happens, real war, more power to thoroughly evil fuckers or both. All three end in the bootstamp face press for myself and the family. That sucks so that's why I doth protest. Good news is that we will figure out which shit sandwich we get to dine on shortly. Clearly the debt bomb of the West is at hand or they wouldn't be going balls deep.
Your rational is meaningless, no disrespect but Russia gave up the peg a month ago. They are soakin up all the extra rubbles printed in the past 6 years. He is making a calculated, I think smart move, bet. He is going to crash the European unions solidarity. Watch and see country's leave the euro and start printing their own currency again. Its a brilliant move and yes the Russian economy will suffer but Europe's will suffer more. All Putin has to say is I want gold and food for energy. Euro and dollar is done
Again... I think I'll risk it. You going to be subsidising my position? :)
Margin call, fella. Forced liquidation at 71.10.
Nice trade. Thanks for the dosh.
So, if Russia can't sell oil and they can't buy stuff because of the sanctions, then that should mean all the stuff they were going to buy can't be sold or has to be sold to someone else (probably firesale) then aren't the real losers those economies that cannot sell their stuff?
moot point. anyone holding ruble denominated assets would probably be labeled a terrorist unless their name was goldman sachs.
is BOJ still sleeping?
Is BOJ still Schlepping?
Fixed...
DaddyO
Japan is very radiant these days...
Coming from Citi and JP Morgan Chase I'm not surprised; $11 Trillion+ in bailouits and QE were not enough for them - they needed CONgress to put the taxpayer on the hook for their $300 Trillion derivative casino gambling.
Getting the hell out of the U.S.S.A. and moving to the Russian Federation keeps getting more appealing.
They are just pissed because their FX desks got clobbered big time, this afternoon... It's actually fun to watch them moan, right at the time when they were expecting those fat year end bonuses...
they are playing on behalf of and for this country ... it is cynical to think of just their bonuses at such an important time ...
Sarcasm...... right?
yeah well ... if you are not a banker ... but if you are no. :)
The guy is just too dumb for sarcasm...
Doing "God's work" and all that; they just need to lose the: spaded tails, forked tongues, and tridents.
those russian chicks are pretty hot, and they like to have fun, and they understand that there is a difference between men and women. and they know what men like, and they know what women like, and they know how to make it all 'fit' together.
besides, i like vodka and borscht.
eb - check this thought. obola and mooch. the 'american couple'.
there it is right there. difference between man and woman. but - well you get it.
There is no feminism in Russia, explain why when you see and talk to a Russian girl you are charmed and you get an instant boner.
I'd go after the Ukraine currency and make it TANK! Asymmetric Financial War, bitchskiz.
THAT would kibosh the Christmas imports to Kiev. They'd get less tropical fruit for Christmas than in the USSR days. Screw the Nazis and rock the Kazbah.
It would also change the tempo and tune of the MSM song.
What are you talking about ? There is no ukie currency left, for all practical purposes...
"I live in 'merika!"
"Keep stackin', bitchez!"
See the dopey similarity? Hilarious.
funny how you maggots are so angry and shitting in your panties over people buying gold and silver. how does it affect you what people buy with their own money? get over it gomer. we're not buying into this ponzi market.
and now you know whos's getting their balls kick in short, the fed banks, gee that was a tuffy.....what do I win.
Bout time for vlad to announce an open credit line with China Construction Bank and HSBC backed by future oil production for the full on mushroom cloud..
Pass the popcorn, er 30 round clip
Would a 100 round drum do?
Gee, all you economic experts offering your free advice to your idol, and he ignores you. What does he know that you clearly do not?
China is licking its chops over Siberia, by the way. Long memory. Port Arthur.
Chess is no match for Go.
That's some pretty weak shit to throw on the wall. China has nothing to gain by major aggression against another power under siege from the West. The long, slow game benefits China best. They are hardly short-term opportunists.
I think you got it wrong. Nobody likes to freeze or live in Siberian minus forty celsius weather. I think the Chinese are licking their chops at Australia. A country of 25 some odd milllion people with some of the best weather on Earth. Just watch where most of the Chinese will be moving in the coming years. With the USA sliding economically, Australia will become a colony of China. Lots of Asians on the ground already in Sydney. And from those hostage pics, two of the more prominent pics were of the two Asian chicks. The baby factories are already on the ground.
Oh look, another ridiculous comment by someone who is clearly a complete retard.
He's actually intelligent, but has an agenda.
He is a servant of Gawd! I've offerred to kick his ass if he ever declares the location of his "ministry" right back to the place (home) where he is clearly unwelcome...
Damn, we live in interesting times. Screw the Cold War II references and all the talk about proxy wars.
Russia could always stop accepting Dollars for oil and gas and only accept Rubles, Silver, or Gold as viable currencies. That would fix the falling currency.
But they take I Pay
No, they still accept USD but convert to RUB, GOLD, whatever just after.
That's the problem. It all worked fine and well at $120/bl, not so much at $50.
Depend on volume: it's a problem if the volume stay the same, now if the volume is doubled this is a much less problem...
Now, I don't know if they were at full capacity before the fall of the Ruble.
Gool luck with that. Who in their right mind would want the risk of owning rubles in free fall?
Do the math -- get 0.005% interest in the US, or get NEGATIVE interest in much of the EU -- or buy rubles and get 17% interest?? All you have to believe in is that Oil prices will not be $40 next summer.
Looks to me like a last, desperate ploy to suck in some foreign currency before they implement capital controls. Even if they pay the 17%, what good would it be if you cannot get it (or your initial investment) out of Russia?
Y'know... I think I'll risk it.
Okay, let's do the math thingy.
Russian interest rate = 17% per annum
Russian rubble devaluation rate so far this year = 40%
Russian rubble devaluation rate yesterday = 13%
Questions?
Questions?
If Russia and the ruble get hammered into the ground it doesn't solve anything in the West does it? We are still fucked too. And you're still an asshole. So nothing has really changed, has it? Oh, and how many are there in your Troll Brigade here at ZH? Looks like 4 or 5 of you working in unison.
Really? Scroll on down to the bottom of the page where you and your associates are taking on me and my alleged 4 or 5 trolls. Let's count the up votes and the down votes and see who is a free agent on their own and who is part of the troll platoon.
I mean, not to suggest anything, but you are the Bay of Pigs and have a Fidel Castro cartoon as your avatar. But let's go down to the bottom and you can tell me how many supporters I have in comparison to you and your collection of happy Putin lovers.
WTF are you talking about? My associates? Haha...
And btw, Bay of Pigs and Castro come from my birthday, and no other reason. And most know me as a stauch anti gov't Libertarian around here. Hardly a Putin lover.
That's not you suggesting that someone slit their throat because they don't like Putin up there at the top of the page?
You're not the guy who called me a tool of the government and/or Wall Street and an assclown and an asshole and a member of a troll brigade of 4 or 5 members?
That's your idea of being an anti-goverment Libertarian?
Well, as a registered member of the Libertarian Party since 1985, I'd like to call you a liar and a low Presbyterian fellow.
How about I just call you stupid then?
If it makes you feel better about yourself, sure, go ahead.
I have a few.
On my charts, should I just get a ruler and draw the line to help me visualize what you are saying?
Does this mean that the Ruble is going to 100, 200 or more?
If the Ruble has fallen hand in hand with Oil does this mean oil is going to zero as well?
Under what time frame can I expect this zero dollar oil and infinite ruble or should I stop the line down at some point?
1) You need a protractor for that kind of advanced calculation.
2) Just my guess but probably eventually. It will rally a bit first due to the big interest hit and no doubt some undercover CB rubble buying support to create the false impression that the rot is over.
3) The rubble will outrun oil since there is a price at which the Russian State cannot support all of the financial calls upon it. Oil will not go to zero.
4) You will need a roll of newsprint fcr the point at which you stop your line, lots of pencils, and a really good sharpener.
ok. subtlety was lost on you and now it looks like you are just making shit up.
It would be fair to say that the drop in the Ruble has mostly been tied to the drop in oil?
If so, then to get to 200 oil would have to be what? $17 a barrerl? Is that going to happen?
I know, it's in your next point that the the ruble will outrun oil. How so and when? What if oil stops going down? What if it goes back up? Will the Ruble continue it's slide regardless of the price of oil?
I guess what I meant to say originally is that your analaysis was no better than drawing a straight line and extrapolating an outcome.
Your answers above are no better either. If you want to have some credibilty put some numbers to it. Show us your math. At what price will oil be when the ruble is at 100, or 200. If resource rich Russia suddenly decouples from the Ruble, when does this happen, at what price. How much are these financial calls and when will Russia run out of money / ability to deal with them.
Back up your statements with something or you're just saying shit you made up.
The rubble has already outrun oil in an intellectual but not a statistical sense, if you understand what I'm saying. They are currently moving in approximate tandem but this latest episode is a financial Vyazma/Bryansk that will have severe repercussions, among which will be a great erosion in the rubble despite the frantic and partially hidden measures to prop it up starting tout la suite. These Potemkin measures will temporarily decouple the rubble to the upside of oil, note the word temporarily, but it will soon catch back down again and keep going.
Fiat currency is totally about confidence in it as a store of value and exchange. That has been seriously compromised now and there is no getting it back without a long and strong period of really excellent financial news that will restore faith in it. Russia will resort to massive propaganda efforts to convince the population that their money is safe. Since it isn't safe at the moment and there is no prospect for immediately, and I mean immediately, restoring it, the price of oil no longer matters except in the sense of saving the rubble through a massive price spike.
There are only a few options left to Grandmaster Putin.
He can surrender as gracefully as his opponents are willing to allow and the chances are good that they would agree to a large measure of face-saving in order to bring this to a close.
He can attempt to ride the storm out and hope that worldwide geopolitical factors will lead to a rise in oil prices that he cannot produce on his own.
He can attempt to create an artificial spike in oil prices through overt or covert means.
My own guess is that he will first attempt to ride the storm out and hope that a collapse in US shale and chaos in other producers economies will lead to the spike he needs although this is an iffy bet due to slowing world demand. But there is a definite time limit to this option. Somewhat like the Japanese before Pearl Harbor, the US/British/Dutch embargo set the clock ticking. There was a limited amount of time available to seek a peaceful solution, after which the decision for war would have to be taken.
Eventually, he will need to create a spike if he cannot find one.
So, to answer your queries and assuming that no war or near-war situation scrambles the calculations:
1)What price oil when rubble reaches 100 or 200. Doesn't matter. This is a function of time and erosion of public trust in the currency now. But a shot in the dark: Oil at 49 when rubble is at 100. Oil at 58 when rubble reaches 200 (out of control by then)
When does this happen? Up to Russia. I'm not claiming that the rubble will go to 100 immediately upon oil hitting 49. Just that it will be there when it does. Putin can economize and hold the fort frugally or he can stay the current rearmament and foreign adventure course or choose some middle ground. Again, a guess: July 2015
How much are these financial calls. No idea, but large. When will Russia run out of money to deal with them. Yesterday, 12/14/14. If they could have kept the rubble above 60 they would have done so. Russia deliberately chose not to defend the rubble with FX but instead elected to try and goose the system with high interest rates to attract capital back into Russia. This means that they do not have the ammo in the bunker to carry out the mission right now but hope to get some more from sources other than their normal revenue streams. Doesn't mean they don't have ammo but that they don't have enough to keep the rubble from falling further. They'd rather keep their ammo and watch the rubble fall rather than spend their ammo and still watch the rubble fall. But it's going to fall.
Sorry I'm not a technical trader dude, but that's my macro-economic take on the situation.
One more thing: Russia will burn up the airwaves with tales of great new trade deals and wonderful new inventions and suchlike things. None of them will, upon careful analysis, offer any hope of immediate relief. All these measures are too long term to be of any use. Russia will be good or ruined long before any of them pan out.
If you would have peace, be thou then prepared for war.
GMC, baby.
"Russia deliberately chose not to defend the rubble with FX but instead elected to try and goose the system with high interest rates to attract capital back into Russia. This means that they do not have the ammo in the bunker to carry out the mission right now but hope to get some more from sources other than their normal revenue streams. Doesn't mean they don't have ammo but that they don't have enough to keep the rubble from falling further. They'd rather keep their ammo and watch the rubble fall rather than spend their ammo and still watch the rubble fall. But it's going to fall."
roughly, I agree. lol, you say "goose the system", and above the article calls it "orthodox response". imo rates above 16% have their own peculiar psychological effects, but that's me
The ammo is there, but the CBR seems to be preparing for a long fight. Which could mean that Russia thinks the Saudis are going to keep the oil price for a longer spell "under water". Perhaps two years
inversely, they might be trying to suck in the "evil speculators" and come back with one huge bounce. Don't forget Russian psychology and their love for great, massive efforts
The US has dollars. Russia has oil. The difference is on is simply a false god belief system and the other is tangible and can keep your home warm or cool. If Russia can stay afloat long enough the dollar will sink. You cannot argue with 5,000 years of history. It always happens. Always.
Oil is very difficult to print.
Why, oh why, does everybody assume that I like the Fed just because I think Putin is a dick tree that is leading Russia to ruin a la Hitler?
And, not that I know for sure, but which country has more energy reserves and which country is producing more oil and gas You act like the US is an energy midget and Russia is some sort of monosource supplier.
Well, the 40% devaluation was when the rate was 10.5%, so why are you comparing apples to oranges?