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Turmoil Spreads: Ruble Replunges, Crude Craters, Yen Surges, Emerging Markets Tumbling
For those wondering if the CBR's intervention in the Russian FX market with its shocking emergency rate hike to 17% overnight calmed things, the answer is yes... for about two minutes. The USDRUB indeed tumbled nearly 10% to 59 and then promptly blew right back out, the Ruble crashing in panic selling and seemingly without any CBR market interventions, and at last check was freefalling through 72 74 76, and sending the Russian stock market plummeting by over 15%.

It is so bad, US equity futures which had jumped earlier on hopes of more Chinese intervention following the latest disastrous Chinese PMI print, as well as a French manufacturing PMI beat (don't laugh), are back to unchanged.
The latest rout continues to be driven by the relentless plunge in Brent which also continued crashing overnight to fresh 5 year lows, sliding decidedly under $60 as WTI dropped well under $55 as well. And as we previewed over a month ago, it is not just Russia, but every single petroleum exporting country that is suddenly seeing a currency crisis, and spreading to all EMs with the Indian Rupee weakening the most since 2013, Indonesia lowering the Rupiah's reference rate by the most on record, and so on. Ironically, this happens as the USDJPY is also crashing and dropping moments ago to 116.25, the lowest level since mid-November. At this rate the Fed will have no choice but to intervene, however in the opposite direction, and admit that despite all its best intentions, the US can not decouple from the rest of the world and a rate hike - so very priced in by everyone - is just no going to happen in the coming years (which sadly means that the latest subprime debt driven "recovery" is about to be called off).
A quick look at the oil market where Brent drops for 5th day, falls below $60 for 1st time since July 7, 2009 as the market continues to look for signs that falling prices is crimping production. WTI breaks below $55, drops to lowest since May 6, 2009. "The race to the bottom continues, we are still not seeing any signs of supply disruption,” says Saxo Bank head of commodity strategy Ole Hansen. “There is very big negative momentum in the mkt and the fact people are starting to talk about breakeven levels of $35-$40 has put up a new red flag for mkts to aim at.... Jan. WTI options expire today and there is quite a lot of open interest ~$55 put strikes, that is probably the key level of potential support today.”
Not helping things was Russia's announcement that it too like the Saudis will not cut production: Russia agrees with OPEC that market will determine crude price, Energy Minister Alexander Novak tells reporters at meeting of Gas Exporting Countries Forum in Doha, Qatar. Novak says that he met with OPEC energy ministers in Vienna; "The participants of that meeting concurred that the situation will be fixed by the market itself in terms of supple and demand balance. Russia is not a country that changes its supply. We will maintain our production unchanged.”
Looking at the Markets, first in Asia, the Nikkei 225 tumbled -2% fell for a 2nd day to breach the key psychological 17,000 level for the first time since the 17th Nov. as the JPY continued to strengthen. In China bad news was good, and the Shanghai Comp surged higher som +2.3% on renewed easing calls following disappointing Chinese data. December HSBC flash Manufacturing PMI printed a contractionary reading for the first time in 7 months (49.5 vs. Exp. 49.8 (Prev. 50.0), with both output and new orders components slipping, the latter contracting for the first time since April. Hang Seng traded down 1.55% weighed on by weakness across energy stocks.
Despite opening higher, European stocks took a turn lower in early trade, with the move to the downside led by energy names after Brent crude futures broke below USD 60/bbl pre-market and WTI broke below USD 54/bbl. Furthermore, the softness in stocks lifted European fixed income products with the Bund tripping stops through 154.73, leading the German 10yr yield to once again print record lows and slip below 0.6%. Overall global sentiment remains relatively negative with Saudi Arabian (-5.5%) and Dubai (-8%) stock indexes also placed under further pressure as the fall in oil prices continue to dent domestic profits. Furthermore, concerns were also placed on Russia as despite the Russian central bank hiking their rate by 650bps, the RUB hit record lows vs the USD and the MICEX was down as much as 7%. This then triggered fears over the ramifications for the Eurozone economy, given the close trade ties to Russia, particularly for Germany.
Nonetheless, European equities then reversed earlier losses, with the move higher led by utility and consumer discretionary names, while Russian asset classes began to stabilise. Additionally, from a data perspective, Eurozone PMIs also painted a less dreary than expected picture with the headline manufacturing and services Eurozone PMIs exceeding expectations. This was then later exacerbated by a particularly strong German ZEW survey (Expectations 34.9 vs. Exp. 20.0), which also subsequently saw Bunds pull away from their best levels.
Looking ahead, attention turns towards US housing starts, building permits, manufacturing PMI and API crude oil inventories. Most importantly, the two-day FOMC meeting begins.
Market Wrap
In Summary, European stocks rise led by carmakers after German investor expectations increased more than estimated. Shares with exposure to Russia dropped as the ruble continues its decline. Asian stocks fall as Hong Kong shares enter a correction, U.S. stock index futures gain. Brent crude oil price falls through $60 a barrel for the first time in 5 years. Euro rises against the dollar.
- S&P 500 futures unchanged, after being up 0.5%
- Stoxx Europe 600 up 0.7% to 325.44
- US 10Y yield down 2bps to 2.1%
- German 10Y yield down 1bps to 0.61%
- MSCI Asia Pacific down 0.7% to 134.73
- Gold spot up 0.4% to $1198.55/oz
M&A
- Repsol Agrees to Buy Canada’s Talisman for $8.3b
- RBS Sells Irish Property-Loans Portfolio to Cerberus
- InterContinental to Purchase Kimpton Hotels for $430m
- Wanda Said to Be Poised to Raise $3.7b in Hong Kong IPO
- Woodside to Pay $2.75b for Apache LNG Project Stakes
- Olam to Buy Archer-Daniels-Midland Cocoa Unit for $1.3b
FX/BONDS
- USDJPY down to 116.290
- Euro up 0.5% to $1.25065
- Dollar Index down 0.4% to 88.064
- Italian 10Y yield up 2bps to 2.02%
- Spanish 10Y yield up 1bps to 1.8%
- 3m Euribor/OIS down 1bps to 9.38bps
COMMODITIES
- S&P GSCI index down 1.7% to 434.07
- Brent futures down 2.8% to $59.33/bbl, WTI futures down 2.6% to $54.46/bbl
- LME 3m copper down 0.7% to $6357.25/MT
- LME 3m nickel down 1.6% to $16192/MT
- Wheat futures down 0.1% to $618.25/bu
Bulleting Headline Summary
- European stocks rebound from earlier energy/Russia-inspired losses as Eurozone data helps to lift investor sentiment.
- The USD-index trades in negative territory, with the move lower in US yields hitting the greenback and seeing EUR/USD break above 1.2500.
- Looking ahead, attention turns towards US housing starts, building permits, manufacturing PMI and API crude oil inventories.
- Treasuries gain as Brent crude plunges though $60/bbl for first time in five years, ruble slides to record low as investors shrug off surprise Bank of Russia decision to hike its key rate to 17% from 10.5%.
- HSBC/Markit’s China PMI fell to 49.5 in Dec., lowest in seven months, from 50 in Nov., even after PBOC efforts to ease monetary conditions
- Manufacturing and services in the 18-nation euro area barely expanded in December as sluggish growth in Germany and France kept business activity subdued
- Bundesbank’s Jens Weidmann said there’s no need for the ECB to expand monetary stimulus, and argued that sovereign-debt purchases aren’t a solution even if slumping oil prices cause deflation
- German investor confidence rose for a second month, with ZEW Center’s index rising to 34.9 in Dec. from 11.5 in Nov.
- U.K. inflation fell to 1% in Nov., lowest in more than a decade, as tumbling oil prices pushed down transport costs and food prices dropped; U.K. 30Y yields fell below 2.5% for the first time on record
- Sweden’s central bank kept its main interest rate at zero and said it’s preparing more measures to jolt the largest Nordic economy out of a deflationary spiral
- Norway’s krone dropped to parity with Sweden for the first time since 2000
- Bank of England Governor Mark Carney said the selloff in emerging markets may worsen, posing the risk of higher borrowing costs and weaker growth in core markets
- China’s U.S. Treasury holdings fell to a 20-month low in October, as yuan appreciation indicated less of an impetus to buy the government securities
- Pakistan militants killed 84 children after storming an army-run school in the northwestern city of Peshawar, one of the country’s worst terrorist attacks in years
- Sovereign yields mostly lower. Nikkei falls 2% as most Asian equity indexes fall; Shanghai +2.3%. European stocks mostly higher, U.S. equity-index futures gain. Brent crude falls 3%, trades below $60/bbl level; copper falls, gold gains
US Event Calendar
- 8:30am: Housing Starts, Nov., est. 1.040m (prior 1.009m)
- Housing Starts m/m, Nov., est. 3.1% (prior -2.8%)
- Building Permits, Nov., est. 1.065m (prior 1.080m, revised 1.092m)
- Building Permits m/m, Nov., est. -2.5% (prior 4.8%, prior 5.9%)
- 9:45am: Markit US Manufacturing PMI, Dec. preliminary, est. 55.2 (prior 54.8)
Central Banks
- FOMC two-day meeting begins in Washington Supply
FX
The main focus has been on the RUB as despite the Russian central bank hiking their key rate by 650bps, USD/RUB has erased its opening losses, with RUB printing a record lows vs. USD and breaking above the 66.00 handle. Allied to this, the USD-index has weakened throughout the morning and made a technical break below 88.00 alongside the move lower in US yields as USTs benefited from a flight to quality. This has also benefited JPY and CHF in a safe-haven Bid, while EUR/USD broke above 1.2500 for the 1st time since 1st Dec. UK inflation data came in at 1.0% vs. Exp. 1.2% and printed its lowest reading since 2002. This subsequently saw a fast-money move lower in GBP/USD of around 46 pips. However, this move to the downside was later reversed, as market participants focused on the fact these numbers do not change the course of BoE action. Finally, the SEK has also weakened throughout the session after the Riksbank this morning kept their key rate on hold at 0.0% as expected but warned the repo rate needs to remain at zero for longer than initially forecast and are preparing further measures that can be used to make monetary policy more expansionary. This has also weighed on neighbouring currency NOK, which also falling victim to the slide in oil prices.
COMMODITIES
In the commodity complex, energy prices have once again been a key focus after Brent crude futures broke below USD 60/bbl pre-market and WTI broke below USD 54/bbl. This has been a continuation of the bearish rhetoric we’ve seen for the sector following comments yesterday from the UAE oil minister who said OPEC stands by their decision not to cut output even if oil prices fall as low as USD 40/bbl and will wait at least three months before considering an emergency meeting, while Saudi reiterated they have no plans to cut output. In metals markets, precious metals have been granted some reprieve with spot gold breaking above USD 1,200 following the cautious sentiment throughout the session while copper has remained under pressure following lacklustre Chinese HSBC manufacturing data and comments from Deutsche Bank who said the copper market is moving into surplus and the lagged effects of the weaker Chinese property market will hit copper demand.
* * *
DB's Jim Reid concludes the overnight recap
We were expecting difficult times before tighter spreads in 2015 but this is already proving to be such a tough December that 2015's returns across many asset classes are going to be influenced by where we end the year.
For example, as recently as December 5th many equity markets were trading at YTD or multi month highs. 6 business days later and the turmoil is being seen in Greece, Russia, Oil, many areas of EM and in DM equity and credit markets. In Europe virtually all equity markets are comfortably down for the year now. Some markets have lost a few years of normal sized returns in the last few days alone so this has to impact 2015.
Given the mini turmoil, we will truly learn a lot about the Fed tomorrow night as if they become more hawkish we can see that they're comfortable that financial markets are not the primary concern. If they end up being dovish then it's probably a sign that they will struggle to have the confidence to upset markets in 2015 and will only raise rates if both the economy merits it and markets are calm. As we state in the outlook we think they will struggle to raise rates but this might not stop them from signalling an intention to do so in advance. So definitely more volatility than the QE3 period we've now left far behind.
Oil continues to dominate headlines with further sharp declines yesterday, extending the 5-year lows and pairing an earlier rally. Indeed both WTI (-3.29%) and Brent (-1.28%) declined to $55.91/bbl and $61.06/bbl and have continued to trade some 0.5-0.6% lower overnight. The oil-sensitive Russian Rouble continues to suffer and yesterday it closed 10.22% lower versus the Dollar at 64.24. The move marked the biggest one-day decline since 1998 taking the year to date decline to nearly 96%. The move appears to have sparked the nation’s Central Bank into action who, post the U.S. close, raised benchmark interest rates by 650bps to 17%. The rate rise marks the sixth hike this year and comes just five days since the last rate move with the Central Bank stating that ‘the decision was driven by the need to limit the risks of devaluation and inflation, which have recently significantly increased’. The move also corresponds with an expansion in foreign currency repo auctions of $3.5bn to $5bn as well as further statements from the Central Bank that GDP may shrink 4.5% to 4.7% next year should oil prices average $60/bbl. The MICEX closed 2.38% lower yesterday and 10y benchmark local government bond yields finished 20bps wider at 13.02%. Expect big moves again this morning. The Russian central bank will no doubt be hoping they can repeat the success of the Turkish central bank earlier this year where they raised rates from 7.75% to 12%. If the new rate is sustained for any length of time it will surely have huge implications for the economy though so it's certainly high risk. Ironically when Russia collapsed in 1998, the Fed slashed rates and arguably started the era of 'moral hazard'. So it'll be interesting if the Fed choose to ignore international events this time round. I suspect they'll find it tough.
Returning to markets, in the US the S&P 500 closed 0.63% lower at the close after a volatile day which saw a near 2% intraday range. Energy stocks continued to weigh on the overall index with the component declining 0.71% although in reality all sectors finished weaker. Credit markets softened, CDX IG closing 2bps and CDX HY around half a point lower and spreads on US HY energy names widening a further 18bps. Pressure on smaller oil and gas producers continues with US-based Apache reporting yesterday that it has agreed to sell its stake in a natural gas project whilst the Canadian oil and gas company Talisman Energy confirmed it’s in talks with various targets over a potential sale of the company.
Macro data was perhaps a bright spot in an otherwise weaker day. An initially weaker December NY Fed manufacturing reading (-3.58 vs. +12.4 expected) was followed up by a stronger November industrial production (+1.3% vs. +0.7% expected) print and capacity utilization (80.1% vs. 79.4%) reading. On the firmer industrial production print in particular, the reading was the highest since May 2010 and our US colleagues note that at its current level, production is growing at a near 8% annualized rate relative to its Q3 average, supporting the case for a strong Q4 GDP number. Just rounding off the data prints in the US yesterday, the NAHB housing market notched down slightly to 57 for December. Treasuries took something of a back seat, the yield on the 10y benchmark bouncing off Friday’s lows to close 1.8bps higher at 2.118%.
Closer to home and with a lack of data releases, risk assets took a sharp leg lower in Europe with the Stoxx 600 closing 2.08% lower - with similar weakness in energy names (-2.95%) – the index now 1.5% in negative territory YTD. There was similar weakness in credit markets with Xover finishing 19bps wider. Whilst core yields closed largely unchanged, supportive comments from ECB officials Visco and Nowotny helped support peripheral bonds with 10y benchmark yields in Spain (-9.1bps), Italy (-6.8bps) and Portugal (-5.6bps) all closing tighter at 1.789%, 1.996% and 2.916% respectively. Recapping the comments, the ECB’s Visco commented in Rome that the central bank could begin large-scale asset purchases ‘rather quickly’ if deflation risks continue citing the threat from oil price declines. This was followed up by Austria’s central bank governor Nowotny who stated that any further QE measures would be the ‘prospect of missing our target on price stability in the longer term’. One of the ECB’s preferred measure of inflation expectations - the EUR 5y5y inflation swap rate - extended declines to close at 1.67% yesterday and mark a 10-year low. With chatter around further ECB broad-based asset purchases likely to attract more headlines in the new-year, a Bloomberg survey yesterday showed that 90% of respondents expect sovereign QE in 2015 from 57% last month.
Interestingly with the large sell off in risk assets in Europe yesterday, Greek equities closed firmer ahead of tomorrow’s election with the ASE ending +1.45% stronger at the end of play. Greek government bonds also recovered somewhat with 3y and 5y yields tightening 87bps and 34bps respectively. DB’s resident expert George Saravelos noted that there is little change in terms of current government support ahead of tomorrow’s first-round presidential election (due 5.00pm GMT) with initial ‘bean-count’ estimates still below the 180 votes required for the final vote.
Turning our attention over to markets this morning, following the disturbing scenes in Sydney yesterday, the ASX 200 is -0.65% and AUD is holding in at 0.82 to the Dollar. With the exception of China, equities are weaker in Asia this morning with the Nikkei, Hang Seng and KOSPI -1.85%, -1.40% and -0.83% respectively. The CSI 300 (+1.03%) and Shanghai Comp (+0.85%) have strengthened despite a weak flash HSBC manufacturing PMI print. The 49.5 reading for December is below the 49.8 consensus and down from 50 last month with the print the first below 50 since May.
Looking ahead to today’s calendar and away from the start of the FOMC meeting, we kick this morning off in Europe with the flash manufacturing and services PMI prints for the Eurozone as well as regionally for both France and Germany. Elsewhere we’ll keep an eye on the BoE statement on the financial stability report due out this morning with Carney speaking shortly after, as well as UK inflation data. We round off the key releases this morning with the ZEW survey out of Germany. Across the Atlantic this afternoon we’ve got housing data to keep an eye on with both building and November housing starts due. This is followed up later in the US with the flash manufacturing PMI print.
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USD 72 RUB
EUR 94 RUB
some russian banks stop real estate financing
expect lots of bankruptcies in russia
I'm amazed Putin hasn't nuked us yet.
that would be very mature of him...
If only he would hit Ferguson, Detroit, Chicago, Cleveland,..
And especially the fucking CNN building!
No, the neo-con cartel Wall St and white house...
Also fucking the AIPAC headquarter will be a bonus point too.
Why? All these cities have already been destroyed by former-Russian-style government systems.
Who's "we" ?
We are they who must go to war over our false beliefs.
No war for me and mine. I'm gonna watch it all burn.hehehe.
Hey ChaosTrend (post below).
What about when people reply to a post that is actually below theirs?
I know, I know, absolute chaos.
Anyone know if John Merriwether has a new hedge fund?
Yep, it's called booker T and the timex quartets.
Que Russia saying "fuckit" and defaulting and Corzineing many investors in 3....2....
1,00000000000000000000000000000000000000 to the dollar....
I just don't want to be one of the bagholders but, since I'm not a primary lender, I'm fucked.
Hope we still have some time before WWIII starts.... I still enjoy breathing air.
I just knew those Russkies would crash these markets. Darn commies.
(Do I really need a /s?)
Its on, bitchez!
Well not quite yet.
The Algo's must be starting to overheat. Hover that finger over the 'Off' button. "Markets" will return to normal in 3..2.......
Russia's moves to decouple economy from the neoliberal monetary monopoly
http://failedevolution.blogspot.gr/2014/12/russias-moves-to-decouple-eco...
Russia has decoupled itself from sanity without any regard to the laws of economics - an equivalent of jumping off the bridge thinking that laws of physics do not apply to you. What we are observing now is the equivalent of the jumper meeting the ground, realizing with a big surprise that Sir Newton was actually right...
The shitheads in Kiev have decoupled themselves from sanity.
Haus-
The shitheads in Kiev; Japan; EU; US ; Canada and Australia have decoupled themselves from sanity.
Yes.
Still looking forward to USDJPN hitting 150.
The Russians decided to "castle". Classic chess move. They expect conditions that favor their economic moves. This gives the prudent man serious pause.
The who? The what??
ya good luck with that one..
Gently swirling around the crapper, before it disappears with a horendous
sucking sound.
Wher are the BTDers ?
waiting for godot, er, yellen. duh.
great job putin
You think that's a great job? Wait til the to big to fails have to eat those debts that china is going to default on. That's when the real show will start. And china will have the last laugh.
and china's holdings of ust? you didn't really think that one through i guess
There is quicksand wherever you stand, ricocheting bullets wherever you look and enough BS to make the desert bloom.
Too dangerous to draw conclusions or to make weighty decisions.
Here is what Russia has to do, PRONTO, if it wants to remain in one piece by this time next year:
- GTFO Crimea and Eastern Ukraine
- Impeach Putin for violating the Russian Constitution (sending troops to Ukraine in August without permission will do)
- Jail their top propaganda guys (just find a couple of dozen scapegoats to appease the public)
- Announce new elections (well, an interim military government will do, too, BUT you have to keep the current nutjob of a Defence Minister out of it).
- Apologize for its actions, start talking about making mends with the world.
The interest rate is irrelevant now, because there is no confidence in the market.
Lay off that Newcastle Brown, its rotting your brain.
This has nothing to do with Ukraine,this is the Great Game redux.
We do not drink that since they moved production to Yorkshire. This situation has everything to do with Ukraine - would not have started if Russians did not all of a sudden decide to rewrite rules of the game set after WW2.
Would not have started if the Ukies hadn't decided to drink the EU coolaid, and overthrow their democratically elected government.
I find it lulzy the people that have the "HEY ITS DEMOCRACY -- Ukies wants to be a vassal state of the EUSSR -- not our fault that East Ukies are outnumbered by those in the West. Thus democracy prevails and all of Ukraine now belongs to the EU."
But the same people also say "Oh well, the election in Crimea doesn't count. Oh none of the elections in Novirussia count. Oh, we'll just take control of the DEMOCRATICALLY ELECTED Ukie government via a coup de etat because we couldn't win at the polling booth. But hey -- now democracy is important to us*"
*as long as it goes our way.
You are morally and intellectually bankrupt.
You know you get a sour belly if you drink that stuff long enough.
I would just be happy to see the Ukies sold off into white slavery.
Too bad there isn't much of a market for fat, stupid, lazy Nazis these days.
Now, slowly, take that remote, turn of Russia Today, and go get some fresh air...
"off"
Its okay -- at least I still have constant electricity in my country.
Oil is cheap now. Sniff more of it.
You just couldn't resist voting for yourself could you?
There has been no confidence in the Fed since at least the late 70's, nothing but spin by the cronies who caused the problem, but don't bother with truth, stick to your own personal fantasy.
It won't happen... Putin might pull back from Eastern Ukraine, but I doubt it. Crimea is Russian for the foreseeable future.
Putin is popular and won't be impeached. While they have propaganda, even the average Russians do understand the nature of the petrodollar pump if only at a simple level - they know that the Saudies are probably heavily influenced by USA to do what they are doing, so Putin is not directly blamed. If he makes some mis-steps on other things, they will be less forgiving.
Here is what the U.S. must do pronto....
There fixed it for yah
Here is what USSA has to do PRONTO...
-GTFO of Iraq, Afghanistan, Syria, Libya, Germany, Japan, Korea, Ukraine, Oman, Bahrain, UAE, West Africa, et al.
-Impeach Obama for dozens of violations of the US Constitution.
-Apologize for its interventionist actions all over the globe.
-Stop spying on all of its citizens.
-Cut all of the Federal Government in half.
-Abolish the Federal Reserve.
That's a good start...
You know they committed to suicide before agreeing to any of those suggestions, just to let ya know.
Money on the sidelines will save us all!...lol.
actually Putin is going to bunkrupt many companies owned by oligarchs and buy them cheap
The Putinistas are starting to look really lame. "Losers" springs to mind.
But we were not losers all those years ago.
try to live in the now :-)
Say what, it's back to the future bitches, prep or die.
About 20k economists are scratching their heads right now.
you mean why raising interest rates did not prop up the currency ?
19k of them would suggest to raise some more :)
There's Talisman gawn. Who is next? Gotta get at least 5-10 of these low/mid rangers out before oil turns.
Repsol are idiots and have way overpaid. Talisman shareholders should consider themselves lucky, its a bailout.
I wonder who is Jewing it to them?
Whoever he is, he is making a packet!
There's a vapor rub for that.
Is this a replay of 1996 when the USA bk'd Russia and Asia to gain leverage and assets cheap?
this time russia has $400bln to do some buy backs on its own
And it took 9-11 to occure for them to clear the bonds and erase the fraud that it took to take down the Russians last time. What will they do this time?
Bonds were due on the very day, LOL!
Two youngsters on bicycles, one with a frog in his left pocket, a Duncan Imperial yo-yo in his right, the other with a baseball card block of bubble gum hanging from his lower lip, looking up at a darkening sky: “Golly, the central bankers will save us . . . they always do . . .”
One does not simply walk into Ukraine. You tried, Mr. Putin, you tried.
On a more positive note, the victory in this war will surely improve the morale of the public in the western realm. Expect optimism, increased happiness and growth within a couple years. Banzai!
Let's look at the losers who phucked with Russia post World War I: Japan, Great Britian, France, Germany, Italy, Finland, Romania, Hungary, Austria, Poland, etc.
Did I miss any?
Only the USA stayed out of the Russian Civil War.
And yes, there were no nukes back then either.
Ironically Ukraine was a "winner" too.
I say again...ten million just to secure Moscow if this whole thing blows up in humanity's face.
wow just discovered the things we must not speak of on zh. Interesting. Good to see a fellow student of history. Dig deeper look back further.
Putin can still turn off the taps to the gas. Cold fucking winter and no way they replace Russian gas. The 5 month supply in Germany is just that, 5 months. It's fucking cold there until June/July.
Putin can still turn off the taps to the gas.
Could.....but it's not happening. That's as far as we go today.
He'll just probably raise rates to a freakish level......he can do that.....we can't.
Two key questions: Does Russia have enough fossil fuels to keep the grid up and transport moving? Can Russia feed itself? If the answer to these two questions are yes then what the world bankers do and what fiat currencies do is not nation threatening. Russia has killed every invader since Napoleon. They weathered genocide and collapse. We need to worry. The unraveling always begins at the edges.
1) Does Russia have enough fossil fuels to keep the grid up and transport moving? YES
2) Can Russia feed itself? NO - food imports in excess of $200bln a year
They most certainly can. http://naturalhomes.org/naturalliving/russian-dacha.htm
Most production can go to themselves. Russia is one of the largest exporters of food as well. What will end up happening (as talk so far) is limiting export of it.
Cue more homoerotic photos of Putin barechested galloping off into the Siberian sunset...
Better that than the ones of Michelle Obama's dogs sitting at the White House table.
Bound to trot out some "better than expecteds" today.
Most likely everyone is out buying houses for Christmas. Fun-Yun will give a glowing update from the NAR.
got ruble crumble?
it's all rigged. that hasn't changed.
I suspect we are going to see some very surprising turn of events and prices of certain commodities making very sharp U turns before we know it and when we least expect it.
I am curious though as to how far the USA can prod Russia before the Russians respond with some unexpected movement.
This link was posted yesterday by someone and it should be raised up as an article here IMO. Push Putin too far, and it could be the end of the Rothschild banking syndicate:
http://new.euro-med.dk/20141215-putins-confident-putin-to-nationalize-ro...
Interesting article.
If we do see the Russian Central Bank leaving BIS and Swift then all sorts of things will follow.
I suspect though that before that we will see an attempt on Putin's life as a means of breaking the back of the Russian leadership.
noone thinks it worthwhile having "an attempt on Obama's life".......but if the US thinks it can kill a Russian President I doubt there will be a White House to occupy
My take is that US is trying to do a strong bully stand while OIL is cheap and they have surplus. They look self sufficient only for now. Putin long knows that shale gas is a bubble and I don't think US can hold the self sufficient energy image longer than couple years. So Putin will play the long game and see who blinks first.
Cold war but different kind.
yeahhh...he´s really going to show it to the Yanks with a completely worthless rubble.
the long game....putin will be gone by the weekend at this rate?
Lay offs in Houston
already and many
Hercules Offshore cuts 400
and that not shale
Go read the post-rate hike articles from yesterday, then read the comments. Look at what was championed, and how honest analysis brought out the "best" of ZH. Appreciate the real value of this site's vocal membership. Gartman and Stolper, you're both Nostradamus next to the gang here.
Oil will roil the markets, but the ruble rout is the oligarchs deserting their enabler. It's a sideshow. Focus on oil, and the associated debt.
you're pissing in the wind. where there was once contrarianism there are now sheep.
One needs to tickle the beast, so it will speak. Then just fade it.
It is just so bizarre that the gang here---a gang that fancies itself so "awake" and free thinking---is just another sub-species of sheeple. They simply cannot grasp that a person could walk this Earth today with no heroes, neither in DC nor Moscow, Beijing nor Delhi. The gang here is like Dubya: if one is not "with" them, one must be against them.
Damn, Charles Mackay puts even Sun Tzu to shame.
Cheap. I have gleaned much from economic analysis and what used to be fundamentals. These do not apply anymore. This is no true market, but an economic battleground where algorithmic programs do the bidding of our masters that you worship as seen in your blatant pandering. You are showing your true colors as you move from sentient and intellectual commentary to schadenfreude. Real people are hurt by these plays. Yes, you have no heroes and truly no honor. You applaud the shackles that await us all.
So all of your PM stacking is really pure altruism, for the greater good of the species, eh?
Right.
When all the players in positions of power are acting like fools, all that is left to do is try to navigate their collective stupidity. Neither you, nor anyone else here is doing anything different. You just aren't coming up trumps, so you get miffed.
Go back and look at four plus years of this site (the first year was more balanced). Lots of schadenfreude every time PMs rose, APPL fell, bonds fell, FB dumped after its IPO, etc. Lots and lots of ridicule aimed at Gartman, Stolper, etc. When equity markets tumble, I have not noticed any sympathy coming from you for those "real people" getting hurt. You are being hypocritical.
Now the shoe is on the other foot. Last night I posted an honest assessment of what I believed the result would be of the Russian rate hike. It was not favorably received. Apparently one cannot state an opinion if it isn't Puti-positive. It turned out to be correct.
I do not think this is about the ruble. That rout is almost exclusively a result of oligarchs deserting the one who allowed them to get rich. Polls might say Puti is wildly popular, buts lots of Russian, especially uber wealthy ones, are revealing their true sentiments by expatriating their money. Rosneft insists it isn't converting that 625 billion ruble bond issuance. Check their account. I don't remember Ben Franklin being Russian.
This is about oil. Yes, that is going to cause lots of folks pain. There is a ton of debt associated with it. At the same time, cheaper oil is going to be manna from heaven to energy users around the world. From Japan to India, China to Chile, lots of folks are going to be a lot better off because energy is suddenly more accessible. Are they not worthy of some sympathy? Are they not real people?
Oh, and fundamentals still apply, just as they always do. Just broaden your definition of what they are, and position yourself accordingly.
Just saw a short guy in a wool cap outside the Marriner Eccles Building carrying a tin cup. I'm going to cover at 77, since I think Janet will give in and start QE-ing Russki paper.
Is gold at zero yet?
No, just your understanding of assets.
Some people are born to be customers.
LOL. What's your pay rate for posting? Sad to be as successful as you purport to be and still have a leash around your neck. Or is that a remnant from your man-boy love club days?
Lets not bring up your ring around the collar problem though, you might have committed a sin.
Pro bono. Ecclesiastes 3 was a good guide, plus luck.
Ah yes, the time to spread the seed of lies for those that gave you a few small crumbs off their table. Sad existence you.
Cue Andrew Lloyd Webber...
"Don't cry for me...."
This article is outdated - EUR is approaching 100 RUR (and in a couple of hours, this post will become outdated, too). I am Ukrainian, and I approve this message...
I suppose you also approve of your countrymen who set fire to a building and let innocent civilians burn to death by not even allowing or notifying the fire brigade to come until it was too late.
The Ukraine could have had all the benfits of Europe as long as it did not make the wrong noises about wanting to have NATO park its missiles in Ukraine.
Did he shoot at the firemen to keep the blaze burning, if not, it was not a legit burning.
Well you are certainly correct about the plunging rouble. Makes me wonder what will happen to the US dollar when people realise the size of their unfunded liabilities and the exhorbitant privilege.
Can not wait to see how the Russians are going to react (they have a few tricks that they can use on the west to bring it down )
Like what - the $700+ bln debt that their state-owned corporations have? The shrinking economy, which was like 2% of the world's? The nukes?
lmao, fYI every govt on this planet has debt, so what is your point
we are in a currency war
for example: dumping all the US treasuries bonds, the dollar etc...
china and Russia can easily break the dollar system , wake up
No, sadly they don't.
It's not the "West"... it's their Arab and Persian OPEC friends!
The "West" will gladly sell them food.
For anything else, I guess it's just leave Ukraine and fingers out... but really, watching Putin drive his car through the mall and right for the cliff is pretty exciting! Yeltsin could at least blame his shit on the booze.
yes so far all the Russian tricks keep crashing the Rouble...what did you have in mind?
It could call in all the loans made to Ukraine. Those loans with a clause allowing for immediate repayment should Ukraine debt exceed 60% of GDP. Some of the loans have underground gas storage facilities as asset backing.
I am surprised that Russia doesn't have a Plunge Protection Team . It is time to start one or to put a limit on drops of a basket of shares to avoid panic attacks !
When a certain limit ( a drop of 5 % say ) is exceeded the stock exchande is closed for half a day ...... Copy from the new COMEX rules .
that's because thy don't have a strong TRIBE presence in the country
I can't wait to hear from the idiots how great the indomitable Vlad is.
Ya lost, buddy!
C Ya!
Just head over to the Guardian and you can amuse yourself with the Putinista fanbois. But yes there are still holdouts claiming this is a master stroke by Putin :-)
Its infectious, even Tyler seems to be quite mesmerised these days by the blond barechested midget.
I honestly don't get it.
The love for Vlad seems to span left and right, east and west.
I think people just like a hard ass with a Napoleon complex.
In times of great uncertanty, The Masses will clammer, and demand a strongman.
Amost without fail.
yes i think there is some sort of father complex wrapped up in that need fo some people for an authoritarian cross-dresser like putin.
Oh well...
You ain't seen nuthin yet.
Does anyone really think Putin is going to say: "Ok, Fuck it. I'm retiring?"
You think the Russian guy in the street doesn't know they're under attack from the West?
Expect some 'special powers act' shortly.
We are at war.
Its actually hatred of US and FEd dominance which causes many to side with Putin. Its human nature. Sure we´d all like to see central bank planning fall off its chair but it aint going to happen with this Russian nonsense.
Putin has way over-reached and no military is going to help him now.
This is economic war. Military need not apply. We will see if he is a puppet or bringing out the treasury dump/oil in gold/ruble gold backing plays, but I doubt it. I think he is owned and this is theater.
When the likes of the Obama State Department isn't afraid to meddle with Ukraine, of all places, like as if it were Nicaragua, it's hard to miss "how low the mighty have fallen."
Well they are all in trouble so don't fog up the mirror to bad with that shower.
Next, CBR nationalized.
Nail guns for all!!!!
Why do people think that the exchange rate for the ruble to the $US is the only important thing?
There are many things in a society that are far more important than the exchange rate between fiat currencies.
Russia needs to decouple fom the forex markets it's gotten itself into, and start thinking in terms of actually goods ans services it needs and how to trade for them, not dollars. They could probably get rid of their central bank too, sounds just as bad as the rest of them, or at least redifine it's roll of an ineffective currency prop.
They don't, it the media's way of ejackulating in public.
important thing is russia has become a net importer as a result of oil price going down
Merkel urges Bulgaria to seek new talks with Putin on South Stream
http://www.reuters.com/article/2014/12/15/us-bulgaria-gas-southstream-id...
(Reuters) - German Chancellor Angela Merkel backed Bulgaria on Monday in its bid to seek new talks with Russia about the South Stream gas pipeline after Moscow shelved the project this month in favor of an alternative link via Turkey.
The EU, at odds with Moscow over the Ukraine crisis and keen to reduce its energy reliance on Russia, had raised objections to the $40 billion South Stream pipeline, which was to run under the Black Sea and enter the EU via Bulgaria.
Critics of the plan said they believed it breached EU law, but some EU member states saw the pipeline, which would bypassUkraine, as the best way to secure their own gas supplies and economic interests and still hope it can be revived.
-------------------
CHINA
Canada, China to sign deal on return of fugitives' seized assetshttp://www.reuters.com/article/2014/12/15/us-china-canada-corruption-idU...
China presents US with list of alleged fugitiveshttp://bigstory.ap.org/article/62f9ab3df23147f89eafef9331aae61d/china-pr...
http://www.theguardian.com/world/2014/dec/15/dresden-police-pegida-germa...
Trouble in Deutschland...
Wow! Just wow! It went under faster than Titanic. From hero to zero in a split second.
It's all a land grab, real estate. FED buying all the mortgage backed securities possible, still. Oil fears new technology, as usual. BTW, Yellen and White are almost perfect dupes, talking puppets.
Meanwhile, physical silver is being hoarded as relic? No, some folks still think it is hedge along with the other tradition. More shelter in place coming soon to a town near you!
BTFD
It seems like we really are reliving the 30s again....they had a trade war..we have sanctions...then the FX market fell apart..so is ours....they got out of it with a World war....will we????
Have you ever seen one example of when we didn't go to war, even just one.
I think all the crazies are still trying to figure out how to not get blown up themselves. Even they don't want to spend eternity underground and if it does come to that the dead will be better of than basically being burried alive.
That last world war ended with every nuke on the planet being used. Fortunately, the total number available at that time was two.
That number is a lot higher now, as is the number of countries that have them. So avoiding another existential international conflict is in everyone's best interests.
WE have fun in Russia=)
Teen did not make 72m...
http://www.foxnews.com/us/2014/12/16/new-york-city-high-school-student-reportedly-makes-72m-on-stock-market/
Oh and DOW now -100... That changed quickly...
Send Krugman over there to fix it.
The Ruble is not falling fast enough for Krugman, he will want MOAR
It would at least it'll get him away from here.
War is coming.
Already happening. Economic war that is.
It won't be long before Vlad, like Saddam before him, is spending each night in a different spider hole.
WARNING Amerikan Patriot is a TRoLLER/paid SHill (check his history)
CAN SOMEONE PLEASE ban him
thank you
So the market was 'not' determining supply and demand beforehand? What was?
"The participants of that meeting concurred that the situation will be fixed by the market itself in terms of supple and demand balance. Russia is not a country that changes its supply. We will maintain our production unchanged."
LOL typical bullheaded russian response. Let the market determine supply, the world is awash in it, you bitch about low prices, yet you vow to oversupply regardless which will drive prices even lower. I can't wait to see how this ends. Might not be reading about it on the net though lol.
Obama and his bankster are patting each other on the back for bringing Russia's economy down.
Russia is used to extreme hardships. The US is not.
Good time in 2015 for Russia and China to turn the tables and attack the US dollar when QE 4 is announced.
Here is what USA has to do, PRONTO, if it wants to remain in one piece by this time next year:
- GTFO Ukraine
- Impeach Obama & Congress for violating the US Constitution (sending arms to Ukraine)
- Jail their top propaganda guys at MSM (just find a couple of dozen scapegoats to appease the public)
- Announce new elections (well, an interim military government will do, too, BUT you have to keep the current nutjob of a Defence Minister out of it).
- Apologize to the world for its actions, start talking about making mends with the world.
The USD is irrelevant now, because there is no confidence in the market.