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What America Does Not Understand About Russia & Oil
As hard as it is to believe - given the strength of the "Russia-is-doomed" meme - Crude oil prices for Russia (in Rubles) are unchanged since February... This is important as all costs are Ruble denominated while revenues are USD denominated, leaving Russian oil companies’ margins insulated despite the dollar decline in price. In addition, the Russian government is easing the export taxes which further improve the profitability of Russian oil. So as US Shale Oil sector is destroyed by its USD costs, it appears Putin's core energy industry is somewhat insulated... and America's late-80s "defeat The Sovet Union" playbook is failing.
Reserves are tumbling with the Ruble...
Did Russia peg the Ruble to Crude? Not quite the crash everyone thinks of...
As Giannis Kolmer explains,
The subject under discussion is whether or not the “clearing” taking place in the oil markets “rhymes” with the events of 1986 that led to fall of the Soviet Union; and the effects of the devaluation of the Ruble, which I strongly believe will be more favorable for Russia, combined with recent trade agreements.
The last time around the US used oil as a tool to combat Russia (at the time the Soviet Union), on a nominal basis Brent underwent a correction from over $30 toward the range of $11-13.5 where it remained until the defeat of the Soviet Union and the withdrawal of the Red Army from Afghanistan in February 1989 after the signing of Geneva Accords in 1988.
While successful this time around the Russian’s via Putin are more than able to cope with an oil rout for the near future. Already the devaluation of the Russian Rubble means that oil revenues will in fact be more in Rubles than last year since the devaluation is currently wider than the correction of the oil price itself.
In many ways, the Ruble is the thing to watch in terms of timing the bottom. Since intervention is ahead of the correction. From 33 to 63 rubles per dollar, that’s almost a 50% devaluation while the correction of oil prices is just nearing the 50% correction level at 52.5 assuming a peak of $105 per barrel. So where does intervention stop? $45 on Brent Crude means 40 to 42 for WTI while in the relationship of USD with respect to the RUB that means 70 to 75 or another few billion worth of foreign reserves while revenues from oil in rubles double at the minimum. Also it is important to remember that Russia has very low debt compared with the 80’s and 90’s.
Meanwhile such weakness in oil markets leads to strength in the Natural Gas sector as the aged, inverse correlation between the two (as oil rises NG prices fall and vice versa) combined with winter conditions boost a price, which in itself is stable-NG prices are not in the process of price discovery but rather in the stage of consolidation, after a violent upswing last winter. While since October NG prices have sold off from 4.5 to 3.7 currently, the 20% drop is nothing compared to the drop in WTI.
In the meantime, if 1986 is any indication, the process of price discovery “clears out” when the correction enters the 60% territory or in number terms from 105 to 42 dollar per barrel
So really what all this suggest is that a bounce is to be expected as we head into the winter, however the long term lows suggest that the mid 40’s is where all this end, which coincides with the correction of 86 and a Ruble above 70 per USD.
Anything below 50 is scary for the energy sector, which accounts for a third of capex in a world dominated by buybacks and dividends fueled by cheap financing. But credit markets are already actively taking that option away.
“Widening”, is definitely the word of the week. However, like in Afghanistan in the late 80’s, in the words of Charlie Wilson, the US "are fucking up the endgame."
After spending a few billion along with the Saudi’s fighting a covert war, the Senate committee in charge of the budget did not see fit for the US to spend a few more million to build schools and infrastructure, indirectly enforcing the belief that God helped the Afghan people, (who for the most part were under the age of 20 at a rate of 1 out of three) fight off the Red Army, not the US taxpayer.
This time, after spending billions to make the USA energy independent, at great risk, they are falsely using a vulnerable geopolitical tool as a weapon against a highly formidable opponent. In the game of career politician versus former spy, like in the game of follow the leader, the bets are in favor of the side with less layers of political red tape and influence.
As George R.R. Martin’s King Robert Baratheon stated “which is the bigger number 5 or 1?... One, one army, united behind one leader with one purpose.
This is not a result of problematic markets. It’s a problem of political stupidity. The question is do you bet on the one leader or on the combination of the Senate, the President, NATO, the Pentagon and all related offensive defensive components in its arsenal.
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Chart: Bloomberg
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Great. But what can you DO with rubles?
Answer : not a lot
I don't know but at 17% return there is prolly a billion Chinamen burning up the phonelines locking in the longest term CD rates they can find.
Ah 1983 the good ole days.
First thing you learn in economics 101, people respond to incentive.
At 17% I'd be willing to park a few Grand.
No worse than any Wall St casino I can think of, but with more up side and far away from Big Bro & Big Ho.
I already asked Tyler to do an article on internet banking with Russian banks. If you're interested, you might want to chime in, to get Durden's attention.
AH I prefer to let the Tylers do their thing. They are good at it. But yes where do you wire the money. LOL
Are all you people drooling about 17% in a Russian bank fucking idiots?
That is not the nominal rate. If the ruble devalues 40% but you make 17% interest in rubles then you have lost money.
Let Russia back the ruble with gold and offer 17%. Then I will be impressed.
I guess you like your .99 in Allybank . Good on you. There will be buttloads of other banks wanting a piece of that gig. But yes technically, nominally and Hypothetically correct.
Exactly, the City will be on that like shit on a shovel ,and "fuck the USA' will be chorused in
the gentlemans clubs.
Oil is money, while the dollar is the will of the NWO.
This article ignores the fact that in order to keep these profits "insulated" they oil companies pay their employees the same rate in Rubles. Thus the oil employee gets half the groceries and half the petrol and half the vodka he was used to. But hey, the Russian oil companies are still doing great!!!!
Fucking morons.
That would only make sense if all Russian items were priced in USD. Which they aren't. So the employee gets almost the same amount of groceries and almost the same amount of vodka and almost the same amount gas.
If you thought about your analogy, then you would realize that if half of what you said was true then gas would be cheaper for the employee, but it's not.
It's a fair comment to say this article ignores the overall economic effect of all this, but it's not a 1 to 1 ratio. A quick look at Russia's imports which have all basically doubled in cost shows that it's cars, car parts, medicine, and other items. When it comes to food, much of it's local and hasn't doubled in price.
I would like someone more knowledgeable than me quantify the effect this is having on the common Russian family. If anything I think this is the actual attack on Russia.
Ah, but how about Russia's future ability to buy gold?
A lower ruble, with lower US$ flow into Russia means they will get fewer US$ (euros) to buy foreign gold. There will also be stronger incentive to export their own gold.
DCRB - normally I agree with you, but this time I think you are wrong. MUCH of their trade brings USD or Euro (Gas and Oil) ... I recall that energy is somewhere over 80% for their trade....
The only 'fewer' USD/Euro number inbound will be hot money - and with very low debt, that will not really hurt the govt or the peasant, who do not need to roll over borrowings repeatedly to survive.
Improrts priced in USD/Euro just got more expensive - but that is mostly luxury or long term capital items. Luxury stuff is optional, long term capex can be defered with little pain.
By my recking, the amount of USD/Euro available to purchase gold is almost unchanged. And the personel cost of the Rissian govt (measured in USD) has dropped nearly 50% this year, against revenue from Gas/Oil that (in USD) is unchanged.. Halving the cost of governent can only be good for the country.
Vodka is as easily exported as oil. Pay something near the Eurozone price or go without. Same with grains. Much of the protein supply is imported.
Only thing without much of an export market is cabbage and turnips. Those will still go up in ruble rate.
Oligarchs will not hesitate to export anything that can be moved.
maybe the russian govt will ban the export of grain if peasants get hungry.
http://atlas.media.mit.edu/profile/country/rus/
I had a chat with a russian colleague of mine and he said that putin has overwhelming public support. So the peasants arent necessarily going to complain if BMWs go up in price.
No more foreign vacations...but there is always Sochi and Sevastopol.
Energy is a low-margin business, which is why is it is critical to understand the costs that drive margins. Talking about salary denomination of an energy company driving enterprise valuation makes about as much sense as talking about how the fucking COFFEE bill at Uber (with its 500 employees) is relevant to its bottom line and valuation...
That works until the Russians decide to punish foreign investors by nationalizing their investments, just like they've done in the case of several major Russian corporations.
Oh, you had an investment? Sorry, comrade!
Sort of like the healthcare you used to have? The USA is owned by illegals and the oligarchs and idiots like you think elections matter. If you are an American - you president, Congress, judicial system and military value you as an American citizen LOWER than an illegal alien which means you are a piece of shit now.
Moron.
this guy seems to think of america and russia like two kids in the block ... these are international markets which price oil based on demand and supply ... is this so hard to understand? dahhhh
Costs for producing Russian oil are calculated in Russian currency, because all Russian oil is produced in Russia. However, it is an international market so when they sell their oil, thay are paid in USD (for now). Duhh, indeed... you sound like the byproduct of an American high school !
@angel_of_joy You must be a product of Russian propoganda brainwashing...Rigs and drilling expertise is bought/rented from the west and paid in USD/NOK/EUR/JPY etc...
What the fuck is that "expertise" you're talking about ? Oil industry is over 100 years old. There are no "secrets" in this industry, and plenty of countries make drilling equipment. Ever heard of the little place called China ?
So wrong. Expertise and technology belongs to the US generally. And foreign governments and companies pay well for it. We started the petroleum industry and continue leading it - Houston is the Silicon Valley of oil.
So I guess the fact that Rosneft is in desperate need of deep sea drilling rigs from SDRL and NADL must be 100 year old technology that they can just get it off the Chinese instead? What planet do you live on Comrade? Moskaw? Stop worshipping Putin. He is just another tinpot dictator that is meeting his waterloo, feel sorry for the oridinary Russians.
So I guess the fact that Rosneft is in desperate need of deep sea drilling rigs from SDRL and NADL must be 100 year old technology that they can just get it off the Chinese instead? What planet do you live on Comrade? Moskaw? Stop worshipping Putin. He is just another tinpot dictator that is meeting his waterloo, feel sorry for the oridinary Russians.
all markets rigged.
Pay Russian expenses (to pump your oil, for one).
Obviously you can buy with rubles anything for sale in the Russian Federation. Of course imports will sky rocket, which is a good thing, as domestic industry has been strangled by cheap and good quailty imports. Even domestic food production has been in the pits, will good land is fallow as imports have defeated domestic production, as EU subsides to Agriculture are legendary.
Rubels bought me, last time I was in Russia, what ever my heart desired. The negative is inflation for consumer goods as domestic production needs investment and time to fill market space. Investment capital, is the main problem, resources and labor lay un-used. It is investment capital that needs working on.
I was onced told Sweden was a hell hole of poverty, a few friends had been there in the late 80's and paid $5.00 for a cup of coffee. At that time a good cup of coffee in the USA would run you 75 cents. Of course it was the exchange rate that caused the price. Swedes, as I reminded my friends get paid in Kronor, and wages are similar adjusted for FX. So a Swede spending his own Kronor was paying 75 cents for his coffee, the Yanks were the ones being screwed to the wall, because of weak dollar FX.
Russians, the average ones, are paid in rubles and markets sell in rubles. Imports will suffer due to rubel fall, but in time, Russian business will rush to replaced the over priced imports. It is a matter of getting over the shock of an import collapae.
But I am sure you did not mean this, really. "But what can you DO with rubles?"
If Russia really wants to ease the burden on their import companies, they could offset the increased costs by selling off some of that gold to the Chinese and use the proceeds to lift import duties.
well said
they're going to be able to buy less of just about everything in rubles, when you went the currency probably wasn't getting crushed
sweden a hell hole of poverty? srsly? that's a first
"I was onced told Sweden was a hell hole of poverty"
American ignorance is of legendary proportion.
You buy oil, coal, and natural gas. You will understand this all too soon, when you are unable to heat your home next winter.
If Russia can ride the storm out they will be in a strong position with the EU but only time will tell...
Fresh smart moves by Putin in the geopolitical field
What do they mean
http://failedevolution.blogspot.gr/2014/12/fresh-smart-moves-by-putin-in...
Putin this smart chess master who stares straight into the skull ....
whereas Obama is portraid as weak, sitting with the ladies, apologizing for the US etc. etc.
How much bs can one take ... what do these guys take us for? complete stupidos??? common give us some slack we arent that stupid are we???
... we arent that stupid are we???
LOL ! QED... Not only you have no inkling about the math thing (as your post about Russian oil pricing proved it), but you skipped your basic English hours too...
what do you mean? can you break it down? as you can tell i am not that sharp
You figure it out... You seem to need that kind of exercise anyway...
Who is we? Are you an American? Well Obama-Soros took your healthcare and also took your country. Biggest military in the world and you became slaves to dual citizens. Keep watching TV idiot. You have no clue.
Can I bet to Win, Place and Show?
The game is cutthroat, it's straight win or lose and the ante is blood.
So the equipment to actually drill for oil is priced in dollars but the oil isn't?
That sounds to me like an explanation as to why oil prices will continue to collapse in price while the Ruble and MCX continues to get crushed then.
No one is worried about a shortage of product but "at what price?" That means not just excelling at drilling but also distribution and ultimately final demand. I understand the long yuan trade as a consequence...but am still struggling with the "Putin meme" here.
What certainty do I have that he won't flee with all the gold and leave Russia itself in the lurch? I would argue very little.
Of course I'm not in charge of the Russian Central Bank either. Seventeen percent interest rates backed by ruble denominated oil but dollar denominated equipment? That sounds like very expensive oil at any price to me.
Russian production costs are paid in rubles, but they sell their oil for dollars. With the ruble going down, the fewer dollars in the down market for oil are nevertheless buying the same number of rubles.
Where would he run to, and why would he need to do so? It's kinda hard to run with 300kg of gold strapped to your back.
The crude oil in Rubles and historic price chart of oil were worth the read alone.
So if I can get nearly twice as many Rubles for my Dollars, would this be the time to move to St. Petersburg?
Indeed. In St. Petersburg, beautiful and polite Russian women will pour Russian vodka (is there any other kind to drink?) onto their breasts, and you have to lick it off. It's the New Russian Roulette.
In America - Yellen will pull dollars out of her butt and let the taxpayers lick them off.
You could BUY GOLD or Platinum or Palladium or TRADE in ANYTHING with INDIA CHINA BRAZIL or Whatevva.
Zero Hedge continues to remain silent on how Dennis Fartman is suddenly coming out really bearish on crude. Only because it doesn't fit their Armageddon meme.
You're right; that's the most bullish thing I've heard for the price of oil in a number of months.
Looks like we're getting close to a bottom anyway. These prices sustained for a while are enough to do the sort of damage to the world economy that ZH says is coming anyway. Just look at what most foreign markets are doing lately with the almost sole exception of the US (which will feel it later).
I would bet thousands of wells are being capped this week. Texas is not going to a have a nice 2015. A lot of supply will be removed from the markets but the demand in most of the world is probably pretty weak.
Meanwhile... at the Western edge of the Pacific, Kuroda's printing is not helping the Nikkei
For all of the perceived failures, at least in some aspects the policy of containing russkie does seem to have an effect: The "formidable opponent" is switching to seals meat as a substitute to Western imports: http://www.novayagazeta.ru/politics/66354.html To wit: "camel, bufalo and even crocodile meat from Philippines have been spotted (in retail)."
Irak War? wtf is that?
#Novorussiya, #Nato-naziEXTERMINATOR, #DPR
This seems like the exact scenario Kuroda would want. Massive devaluation with minimal impact to energy.
Re. Vlad winning. Yippee-i-o-kai-yeah MFs.
Any help in killing the beast that is destroying the world is appreciated. Greatly. Thanks Vlad.
It may be our govt are in bed with the banksters, but we the people despise every one of them. I miss Washington Mutual :( very much.
and say:
"Sleep with one eye open, gripping your pillow tight."
https://www.youtube.com/watch?v=1QP-SIW6iKY Enter Sandman
Metallica In Moscow (Vladimer Putnin sighting at 1:20) See of people
A Ja idu shagaju po Moskwie...
winter is russia's friend..ask nepoleon,ask hitler..germans & EU needs nat gas for winter..the west is just a hair too smart for it's own good. this is putin's trump card ..when will he play it??
This is without a doubt either the stupidest or the most disonest post I have ever seen on ZeroHedge. There is no "insulation". Russian corporate debt service is USD and/or EUR denominated.
Lukoil profit was halved in Q3. Q4 will orders magnitude worse. Gazprom fared little better. Honestly, just look at the stated financials of Russian companies. This will tell you everything you need to know.
I have seldom seen such total bullshit proudly displayed. Please, please review your editorial policy.
Happy Hanukkah.
Russian companies have the option to DEFAULT on their debt. I'm sure the Russian gov. will be more than happy to "help" them... for a proper price. Then, the joke is on their creditors...
Your point is well taken. The author of this article is focused primarily on the "income statement" side of the business (i.e., revenue and expenses) and not so much the debt side of life as presented in the balance sheet. Without question, more than a few companies (including plenty in the US including the Enron's and MCI's of the country) and investors have met a nasty fate by being all consumed by the income statement without paying any regard to the balances sheet or cash flow statements (most likely because they don't understand them).
So while the revenue and expenses may be managable, having to repay debt with currency that has all of a sudden lost half of its value becomes a major problem (as the effective debt service rate at both the principal and interest levels increases substainally). So how do these companies deal with this issue, well a couple of ways. First and if they are strong enough, they'll muddle through the downturn and take the hits (e.g., sell some assets to riase USDs). This of course only works if they have the financial strenght and resources in the balance sheet to weather the storm. Second, is they begin to plan well ahead and develop a strategy to effectively enter into a revised debt agreement with the creditors. They're restructure the debt, look to reduce interest payments, you name it. Or in other words, refer to the Greece option. Third, they'll simply default on the debt and stop paying. This of course will severly limit their access to capital moving forward but again and if they have planned ahead, companies can weather this type of event (in fact, it happens all of the time).
As for the third option, a couple of issues need to be kept in mind. First, if the assets secured by the loans (denomiated in USDs) are located in Russia or in the general area, good luck attempting to take ownership. There's almost no way a creditor is going to be able to take control of these assets and sell them. Second, risked based capital loves distressed deals with great return potential. In the US, I've dealt with these vulture funds and how/when they step into troubled companies. On a global scale, I'm sure some "off the radar" money in China would love to step in and be the hero to support trouble and/or challenging situations in Russia. China has more than enough USDs and US debt to spare as honestly, what's $100 billion to China these days (especially if it can scope up some valuable assets).
My point in all of this is as follows: The authors assessment may be a little too rosey but at the same time, your comment may be a little too bearish. The problem with not just ZH commentors but on just about every other site as well is to base comments on the flavor of the day or the current momentum. It's very easy and convienent to bash Russia and Putin right now given the crash in oil and the Rubble as everyone can jump on the negative bandwagon. In addition, its just as easy to jump on the praises of crashing oil and the benefit to the US and world economy (not found on ZH but definitely present on other sites) which is also a "income statement" joy focus without understanding the potential damage and risk to companies with weak balance sheets (and the flow through effect to banks, investment companies, etc. that hold the paper).
In the end, the market will find a way and re-balance. Weak energy based companies will fold (in Russia and the US) and the strong will sieze the opportunity and get stronger. I have no doubt the Russian oil companies you mentioned are getting hammered but here in the US, the 4th quarter results for a number of oil based companies will be enlightening to say the least. But don't just look at the top line and potential impact on revenue as the real story will be in the untold assets, now currently booked on the company's balance sheets, which value is dependent on $x per barrell and $y cash flow. Once the cash flow is sacraficed/impaired, the underlying value of the asset on the balance sheet is impaired and write-offs will need to occur. And when this happens, the loans outstanding with covenants will be violated (e.g., debt to equity, debt to tangible net worth, debt service coverage ratio, etc.) and this is where the fun really starts.
Yes, the large Russial oil companies that have borrowed in USDs are suffering the double whammy of falling oil prices and heavy debt service requirements (although some might have and should have hedged for this situation) but so to will countless oil industry companies (from production to rig operates to suppliers to transportation companies, etc.) in the US as the trickel effect of dropping oil prices works through the entire system (which may take 24 months or longer). It's one thing to weather a 5 to 10% drop in the price of a product or service but I have yet to see an industry not completely hammered when the price of the product drops 50% in less than six months. And BTW, for those arguements out there that are based on the oil producers "hedging" their production, this may provide some shield over the short-term but the counter-party risk with the hedges has to be skyrocking as well so in some capacity, there rae going to be some very big losers, and very soon.
My rant is based on the incredible statement that the Russian oil sector's P&L is somehow supported because its costs are shielded from the USD rally. This is at best profoundly stupid, at worst a deliberate lie.
Current USD levels have me pricing oil in the low $50s/barrel. The world isn't awash in oil, it's just that extracting oil is cost-prohibitive at this USD level. This means a lot of wells need to be capped (happening) and some BKs, or the dollar breaks down. The latter is unlikely.
DXY breaks past 90 and it will shoot like a rocket, and everything under it will be burned to a crisp.
If you bought some Russian oil companies in 1999 and 2009 (like I did), in similar situations, you would have made 10X your investment. I am overjoyed to have the chance at a 3-peat.
Agreed and this includes US corporate earnings as once the preformance of US international operations are translated back into USDs, everything falls including revenue levels, expenses, and profits. US corporate earnings will suffer from a rising USD at both the translation level and actual unit sales levels (as US goods become more expensive in international markets and thus, demand will be reduced).
Remember, excessive inflation just costs people their jobs. Deflation will cost them their jobs and lives as if the world enters into a deflation spiral, the massive global debt load cannot ever be serviced (and will implode on all economies, one after another). And to my previous point, everyone starts to love deflation as prices drop but they don't understand the collateral chain and that deflation also negatively impacts earnings at the public, corporate, and personal levels. If it really takes hold and given the extreme debt levels present (especially at the government level), deflation is going to be the worst nightmare possible for the government and banks. Thus the effort to inflate at all costs.
You may be right as the USD is probably going to have one last great run (which I believe will happen) but if the run is too excessive, the global damage will be severe and ultimately punish those that are overly indebted. And number one, two, and three on this list are the US, Europe, and Japan. They simply cannot afford deflation as the collateral chain will implode leaving the financial industry on the verge of insolvency, again.
Don't sweat the derivatives/collateral chain stuff. Somebody's on the wrong side of the hedge and that means they are in pain, and that is all we know. I heard the same crap about BP's hedges blowing up their counterparties during the Gulf oil spill. Didn't happen. Stick with facts and high-percentage trades.
The USD will trade rich and cheap, but it is going nowhere soon.
These companies also usually hedge their production costs incase of a large decline.
Excellent post. Balance sheet reminder is always important and certainly missing in discussions almost everywhere.
Jm, my thoughts exactly. There have been a lot of articles that have been really reaching. This is one of them.
I guess we need another narrative about who this is meant to hurt and who is behind it now.
Nigeria is the target. And the Saudis want to wreck their country so they can get more cheap black slaves?
Work with me here!
Up till 1971, the US dollar was backed internationally by gold. When Nixon broke that backing, he opened the door to the huge inflation of the 1970's.
Till now, the ruble has effectively been backed internationally by oil. When the price of oil goes down, so does the backing for the ruble, opening the door to lots of inflation.
Without question, Russia can withstand a bout of inflation. But it may not be much fun.
Low debt-to-human ratio, spacious country, beautiful women, ubiquitous oil, the best scientists on earth governed by one of the greatest men in human history, and here I am just masturbating.
LOL it's failing! Ha! Only on fucking ZH could I read an article that says the tactic is FAILING when the Ruble is down almost 50% in 6 months! Bahahahaha! Yea it's failing alright! Jesus Christ... get Putin's dick out of your mouths for 10 seconds and maybe you might see it's not failing. Infact they just hiked rates up to 17% just to freaking stop the bleeding!
Failingin! Ha! What a laugh and a half... if Putin has a gold card to play he better fucking play it already.
just checking in..... thanks , I guess russia not hurting, even though revenue is off 40% their costs are too. every thing is fine, carry on
Every so often I like to horse around on XE.com, comparing various currrency pairs. The Ruble isn't doing too bad against the Ukrainian Hryvnia. That's about it though. Even the Zimbabwean Dollar is kicking the Ruble's ass.
I'm guessing most average Russians weren't buying a lot of imports anyway.
So, what happens if Russia will only accept payment in Rubles?
Good point. All those euros buying rubles to pay for gas ought to have a goosing effect.
You know, my favorite part of all this is that chart that shows how oil is still priced the same in rubbles.
Okay, but it costs A LOT LESS THAN IT USED TO in any other currency.
So the general outcome is that Russian consumers are getting royally screwed because they live in the only country in the world where the price of gas isn't dropping.
More win for Grandmaster V.V. Putin over stupid Americanskiy checker players.
When put as Putin vs Choomer....there is no match. Putin didn't spend his youth smokin dope and listening to his daddy teach him socialism and race politics. Wow......how did this fucking clueless useless mother fucker ever get elected........twice???
russia's circling the drain what i don't get is what you zh morons like about putin is it his antisemitism
.
Antisemitism? Come on, get real. He supports the Syrians, and they're about as semitic as you can get.
What is your definition of Semite?
You should kick the guy`s nuts rather than askin` a question!
So there. And I`m your 2nd red arrow .... :-)
Like it's fucking going anywhere. This is fucking temporary. War is imminent....on some theater of fucking scale. "Russia is circling the drain"....fuck me. You sound like a regional news reader.
Too much debt. Too many lies. Too many fucking douchebags at the controls and in power.
Add in way too many motherfucking wanking banker cunts, and you have what we have;
A global print fest of funny fucking money, and more lying than Pinocchio on crank.
What a retarded crybaby.
another 'antisemitism' moron
Enemy of my enemy.
Russia can get paid in Chinese,Indian,Brazilian,USD,whatever currency it wants because the Americans will crash all emerging markets with the strong U.S. Dollar.The strongest Dollar period which will happen about the start of the second half of 2015 will be the last straw before a collapse.
Could happen according to these cycle indicators I'm looking at by Charles Nenner Research,David Gurwitz Managing Director.
http://www.kitco.com/news/video/show/Kitco-News/858/2014-12-10/After-Cal...
Have to agree with you on that.
When US pull back all their investments all around the world, everyone will suffer.
US has no choice because all those investments were made with low interest debt and leveraged debt.
New and old rules are forcing Banks to clean up equity holdings.
Everyone focusing on Russia. But actually a lot of other countries are in very similar situation.
Indonesia for example is seeing a drop from 9000 Rupiah per Dollar to nearly 13,000 per dollar.
And Indonesia has always been a string US ally.
Another load of crap from FSB Tyler.
Sure, Russian oil revenues are in dollars and expenses are in rubles, but revenues just got cut in half. Expenses, not so much. Russian companies have been locked out of the global bond market since the summer. Witness Rosneft's "creative" bond deal that freaked out the ruble this week.
Nat gas prices in the US that the author quotes have absolutely no connection to Russian and EU gas prices. They are totally separate markets. Spot prices in Europe are down 30%+ from last year.
Russia has lots of physical gold, but with the price of gold falling, using it to back the Ruble does not seem too desirable or effective. Unless and until Russia, China, and/or India destroy the paper gold market, it seems the manipulation of the physical price by shorting paper gold will continue to set the physical price. Gold buyers have been enjoying the low prices, so what would spur them to push up the price - lack of available physical probably. I wonder if Putin is tempted to buy up all the paper shorts and then demand physical delivery?
As to the outstanding debts of Russian oil companies, if I am not mistaken these companies are largely owned by the Russian government, which has large foreign reserves, and can raise money from China. An interesting aside is that Western sanctions preventing Western oil companies from carrying out joint ventures in Russia may put the Western companies in default of their contracts and concession rights, and effectively give large gifts to the Russian partners. The French giant Total is going ahead in Russia. Anyone heard anything from Exxon, Chevron, or Shell?
Let's just stick to hard currencies and the argument "Russia is doing fine" disappears in the winter whiteness.....
but, but, I thought ZH wanted them to sell oil in new world currencies rubles and renimbi.
We always have a tendency to fight the last war, hot or cold.
Since the ruble just hit 72, is this guy calling a bottom?
What can you do with the Rubles?
That's exactly the message Russia is sending to the market.
Unless you have some real business in Russia, get out now.
And on the way out, give up your Rubles.
Russia benefits from buying Rubles back at cheap rate.
Those who speculated on making a kill in Russia are being slaughtered.