Outspooking The Lehman Apocalypse: Could A Russian Default Be In The Cards?

Tyler Durden's picture

Via Mint - Blain's Extra Porridge,

“Nazhmite Lyubuyu Stavku...“

Extra Comment – this might be getting serious.


Russia’s markets have been spanked hard despite last night’s hike. 19% currency crash and 13% down stocks in a session. Ouch! Cumulatively, over the past few weeks stocks, oil and the Ruble are off 50% plus, and bonds off 40%. This morning felt like free-fall. Expect more action from the Russians to stave off economic catastrophe... imminent capital controls are rumoured, but markets are demonstrating a massive loss of confidence.

Lots of old market hands are talking about how its similar to the Russia default and crash of ‘98 all over again.. Actually.. its worse.

Much worse.

The scale and speed of the current collapse is a magnitude greater, and the effects are accelerated and magnified by the utter absence of liquidity, and by the political stakes at play. Lots of comments about how a Russian crisis might play out and what cornered Putin may do – or be forced into. Let’s not speculate, but it seems pretty clear that any Western support to calm the crisis and stabilise markets would come at a very high personal cost to Putin. That would be a good point to get selectively involved.

It’s too early. We’ve seen a few cautious buyers get wallpapered with Russian and Ukraine paper – and done decent amount of business, but generally none of the main distressed players feel it’s yet time to get involved. “Don’t expect a V-Shaped recovery – its different and aint going to happen..” said one manager. Hope is not a strategy when it comes to Russia at present.

The big risk is whether the Russian meltdown can be contained within the borders of the Rodina. All kinds of no-see-ems suggest themselves.

What are potential knock-ons into other markets? Perhaps Russians having to unwind London Property, (we understand Russians have been very big buyers in recent weeks prefiguring potential exchange controls), or further ructions in Europe? We’re already concerned European sovereign debt is poised on a knife-edge between brutal reality and over-inflated hopes for QE. A strong nudge from a conflagurating Russia and bang goes Italy?

Or will it come from safe-haven flight triggering sell-offs across every asset class in a replay of 2008? Could a Russia default that will outspook the Lehman apocalypse be on the cards?

So much for dull Christmas markets...

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Haus-Targaryen's picture

I know I am spamming ZH with this -- its important.  

Fucking watch this (2 minutes)





Imagine the US blows up its own shit blame it on Russia, and thereafter "Belgium" liquidates all its newly acquired T-Bill reserves labeled as "Russia" -- and the bankers have their war.     

Dr. Engali's picture

I watched that last week. They will always tell you what they are going to do to you before they do it. Megalomaniacs are funny like that.

Haus-Targaryen's picture

America will be poor, unemployed, and pissed as hell.  Imagine how everyone felt on 9/12 but couple it with having everyones life savings evaporating.  

They always do.  We all remember x Files in 2000.   

Publicus's picture

Manufacturing is salvation, Russia needs to learn from China.

Pinto Currency's picture



Russian Federal debt is 16% of GDP.


What's really going on.


Russia and China announced in the summer of 2014 that they were no longer accumulating USD denominated assets:




They have been using their USD trade generated revenue to buy real assets including physical gold and are moving to pricing oil in gold for trade.


The paper gold boys in London are nervous.

Publicus's picture

Nope, Russia is pricing oil in Ruble now, while selling gold.


Oil backed Ruble + non convertable capital account, the Chinese playbook basically.

Pinto Currency's picture



That's what you think.

7.62x54r's picture

Blood is definately in the streets now.

I'm sorely tempted to buy up Rubles and Russian treasury bonds.

RaceToTheBottom's picture

Russia should have just paid what the Saudis wanted before the Sochi Olympics.  It would have been a lot less painful.

Patriot Eke's picture

Damn, that's funny.  The royals know the Russians are not cowards and not going to be ruled by anyone.  They know the Russians will not back down too, so the ultimate objective will be won one way or another.  Making war has always been easy enough.  I hope I'm wrong for my children's sake, but I still expect this to end in a global nuclear war.

Escrava Isaura's picture




Thanks for the video. Not sure what to make of it.


Anyway, there's definitely, as a Putin adviser mention, a war coming in Europe.


So, for anyone wonder why Chuck Hagel had to leave in a hurry…. Well, wonder NO more!


Bollixed's picture

Back in the day the story was that when the Iranians took over our embassy and held them hostage they did the same to the Russians. Only the Russians sent the Iranian messenger back to Iran with his genitals cut off and stuffed in his mouth. The Iranians got the message and bailed on the Russian embassy.

Volaille de Bresse's picture

"Back in the day the story was that when the Iranians took over our embassy and held them hostage they did the same to the Russians. Only the Russians sent the Iranian messenger back to Iran with his genitals cut off and stuffed in his mouth. The Iranians got the message and bailed on the Russian embassy."


Not true, that was in Lebanon in the 80's. The terrorists kidnapped a few Russians, the Russians kidnapped a few friends of the terrorists and released them with important parts missing. Withing 24hrs the Russians walked free.


As they say in Russia "there are TWO ways to solve a problem : the civilzed one and the uncivilzed one. And we Russians always tend to go for the latter!"


Obama and Soros should be very afraid at the moment.

thestarl's picture

I know they're insane surely not that tapped out

RaceToTheBottom's picture

I don't know, imports of nailguns have gone through the roof.

Headbanger's picture


Haus-Targaryen's picture

Will the hookers and blow get counted in GDP? 

Headbanger's picture

Won't matter anyway once all the banks vaporize cause there won't be any currency left for counting GDP

Then again, GDP might be measured in barter trades like hookers for booze..

Haus-Targaryen's picture

So GDP will be measured in "hooker hours" -- for example?  


SoberOne's picture

Headbanger, I DO plan on getting a new 4x4 suv as my other ride is 10 yards old now. Don't want to deal with changing hoses and belts while fighting off zombies!

RaceToTheBottom's picture

Go to the Dakotas.  They are giving them away.


Tall Tom's picture

You were not spamming.


That video is a MUST SEE.

chunga's picture

Here's another good movie clip TT...


From the 2009 film 'The International' inspired by the BCCI (Bank of Credit and Commerce International) scandal, comes the following truth:

When you control the debt of conflict, you control everything:

  • Calvini: "No, this is not about making profit from weapon sales.  It's about control."
  • Eleanor: "Control the flow of weapons, control the conflict?"
  • Calvini: "No. No No. The IBBC is a bank. Their objective isn't to control the conflict, it's to control the debt that the conflict produces. You see, the real value of a conflict - the true value - is in the debt that it creates. You control the debt, you control everything.  You find this upsetting, yes?  But this is the very essence of the banking industry, to make us all, whether we be nations or individuals, slaves to debt."
Wizard of Ozman's picture

I did that in 2008, and it hasn't worked out for so hot for me. 6.06

Quantum Nucleonics's picture

The problem with that is Russian labor isn't all that cheap, and there's not a huge surplus of it what with the collapsing life expectancy and lack of much breeding going on.

Calmyourself's picture

Russians seem to have a different mentality towards production than the Chinese.  However, threaten Mother Russia and they move entire factories over the Urals and produce 2500 T-34 a month and 10,000 Sturmoviks and the drunken bastards can fight, ask General Paulus..

Arius's picture

Time for that genius John Merriwether to start a new hedge fund so he can get bailed out ... to make it more legit get a couple of PhD in there ...

Mr Pink's picture

Sounds like a good time for some stock panic buying!

boogerbently's picture

FOMC minutes tomorrow.

In the 2-3 days following the last 3 meetings, DUST has gone up 13, 25, and 66%, respectively.

Pool Shark's picture



Yep. I nearly pulled the trigger on some silver today near the bottom, but it looks like I'll have a better opportunity in a few days...


Karlus's picture

Silver is not at the bottom. You know this. Knife, falling...catch or not to catch?

Oldwood's picture

deflationary thinking.

BigJim's picture

Is there ever a bad time to buy stawks? Stawks, stawks, loverly stawks?

boogerbently's picture

.....an ETF, at that ! 

Cynicles's picture

Forget not the militarized cops & Øbama's Brown Shirts.

Widespred civil unrest will allow the Gov to drop the hammer, closing the remaining gaps in oppression nationwide. 

palmdetroit's picture



Fixed that for ya

Freddie's picture

Your rights were stripped by Congress the other night.  You are now lower than an illegal alien with even fewer rights.   They don't care what we think.

Bokkenrijder's picture

What would happen if the US would raise it's interest rates during the FOCM meetings within the next 2 days? If only by just a little bit? Wouldn't that blow up the Ruble?

During the ERM crisis in 1992, the UK begged Germany to lower rates, but the Germans stuck to their guns. What if the US decides to screw Russia over the next 48 hours and raise rates by a tiny factor?


Karlus's picture

Raising the rate would blow ourselves up even worse (increased debt payments....etc) No, just let the House of Saud do the heavy lifting on Russia and keep the powder dry.

Quantum Nucleonics's picture

That wouldn't do anything to the Russians.  A surprise rate increase would blow a hole in US equities, probably wiping out more value that the market cap of the whole Russian stock and bond market, making EM, et al less risky on a relative basis.  It probably would even make long term rates go down, as "traditional" economists interpret the move as likely to cause deflation.  The yield curve would flatten, but it wouldn't likely shift higher.

tumblemore's picture

"They will always tell you what they are going to do to you before they do it."


Yes, it's psychological.


The thing about the banking mafia is they are basically the spawn of hundreds of generations of loan sharks. As loan sharking is such a dirty, nasty business decent people can't do it so over those generations all the childen born to the banking mafia who weren't sociopaths dropped out and became tailors or something.


So eventually - after 100s of generations of this process - the people left in the banking mafia familes are 100% sociopath.

drink or die's picture

Movies aren't reality.  Movies aren't "important", they are entertainment.  If you need movies to understand the world around you, then you have problems.


There aren't conspiracies where Hollywood writers put in secret Illuminati plans into movies, sorry. 

Haus-Targaryen's picture

---> THE POINT <---


---> You <---

Ghordius's picture

that videos tend to convey lesser quality info? that I share this prejudice, based on my personal and so limited experience?

Haus-Targaryen's picture

I was not saying the "movie" was important.  Its just a movie.  

The message contained therein -- an idea -- is what is important.  Ideas, whos time has come, can be disseminated on a multitude of platforms, be it low-budget financial blogs, movies, radio, the news, etc., etc., yet cannot be stopped.