More Bad News for Russia

[lordtiberius]

I wonder how the NATO troops training of the Ukrainian armed forces in western Ukraine is coming along ?

I suspect the Russians and their separatist mates are gonna have a huge shock if they try and advance further into Ukraine...and will probably also have real problems trying to hold the Donetsk and Lugansk regions.

Well-trained Ukrainian troops who are very pissed-off with Russia fighting Russian conscripts and mercenaries ..i'm not so convinced by the doom mongers on here about Ukraine's chances in this war.

None of us know if any advanced weapons have been supplied to Ukraine by NATO  countries.

How many of the armchair experts on here would want to face angry Ukrainians on the field of battle or in the war-torn cities ?

Ukrainians are a merciless bunch...especially when they're fighting for their families,their homes,their land i'd imagine.

Will make Bosnia seem like a walk in the park i suspect.

So,with the Russian economy tanking big-time and the Russian body-bags piling up in the trucks going back to Russia,let's see how long the Russian nationalistic worship for Putler lasts. .

Agree.

It is a bit odd to have so many Putler admirers among the Ukraine side

[AkMike]

Awww Shucks. More bad news!   


EUR/RUB: 60,08. Доходил уже до 60.39
USD/RUB: 48,35. Доходил уже до 48.60

[Isthmus]

I wonder how the NATO troops training of the Ukrainian armed forces in western Ukraine is coming along ?

I suspect the Russians and their separatist mates are gonna have a huge shock if they try and advance further into Ukraine...and will probably also have real problems trying to hold the Donetsk and Lugansk regions.

Well-trained Ukrainian troops who are very pissed-off with Russia fighting Russian conscripts and mercenaries ..i'm not so convinced by the doom mongers on here about Ukraine's chances in this war.

None of us know if any advanced weapons have been supplied to Ukraine by NATO  countries.

How many of the armchair experts on here would want to face angry Ukrainians on the field of battle or in the war-torn cities ?

Ukrainians are a merciless bunch...especially when they're fighting for their families,their homes,their land i'd imagine.

Will make Bosnia seem like a walk in the park i suspect.

So,with the Russian economy tanking big-time and the Russian body-bags piling up in the trucks going back to Russia,let's see how long the Russian nationalistic worship for Putler lasts. .

Agree with all of the above.

Psychology and motivation in warfare is never to be underestimated.  Ukrainians are fighting for the existence of their State as a functional State. Their nation doesn't have a future unless they win. The Ukies holding Donetsk Airport all understand this and that is why the Kremlin's Proxy Forces are breaking their teeth there.

[Brasscasing]

Awww Shucks. More bad news!   


EUR/RUB: 60,08. Доходил уже до 60.39
USD/RUB: 48,35. Доходил уже до 48.60

Looks like those sanctions will have the Kremlin's attention now, eh? Now's the time to ratchet it up a notch as well...

Dollar Shortages Spread Amid Russian Ruble Collapse

..."Rising demand for foreign currency meant U.S. dollars and euros were unavailable at some Russian banks and exchange points Friday as the ruble went into free fall during morning trading.

The Russian currency nosedived 3.8 percent against the dollar after markets opened, hitting a historical nadir of 48.64 against the greenback and shooting past the 60 rubles to the euro mark for the first time.

Analysts warned that Russia was standing on the verge of a full blown currency crisis amid signs of panic in the population, where memories of a plummeting ruble and runaway inflation during the 1998 default are never far away.

The dramatic rout meant the ruble had lost over 10 percent against the dollar in the 48 hours after the Central Bank announced Wednesday that it was capping market interventions to defend the ruble at $350 million a day.

While the ruble later bounced back, gaining 6 percent by mid afternoon on expectations that the Central Bank would be forced to act, the currency was still down 30 kopeks in the early evening, trading at just under 47 versus the dollar.

Physical Shortages

Russian retail banks reported a surge in demand for foreign currency on Thursday and Friday.

"The excess demand is 3-4 times more than the standard level of foreign currency purchased by individuals," VTB 24, the retail arm of Russia's second biggest banking group, told the TASS news agency Friday.

Attempting to exchange rubles for dollars at a VTB 24 in downtown Moscow at about 2 p.m. on Friday, a Moscow Times reporter was told that the branch had ran out of dollars, but was expecting additional shipments the following day.

At a nearby Sberbank, dollars were still being sold but the branch was flooded with so many customers looking to exchange currency that the ticket-based waiting system had stopped working."...

http://www.themoscowtimes.com/business/article/dollar-shortages-spread-amid-russian-ruble-collapse/510803.html

I find it both ironic and amusing that with all the dis' talk about the US currency coming from inside Russia and Putin supporters that the first foreign currency the Russian population puts a run on to protect their own bank accounts is the US Greenback.   

Brass

[AkMike]

Has The Russian Central Bank Thrown In The Towel?
         
The Central Bank of Russia (CBR) seems to have decided that it can’t beat the markets. On Wednesday November 5th, it announced an end to unlimited currency support interventions. It said it would spend a maximum $350m per day smoothing out fluctuations as the ruble approached the edge of a trading band. Once that limit was reached, the ruble would be allowed to fall out of the band. The final sentence of the CBR’s press release spells it out:


“As a result of the implementation of this decision, the ruble exchange rate will be determined predominantly by the market factors.

Game, set and match to the markets, apparently.

But wait. This game is by no means over. In my previous post, I said that the way for the central bank to remain in the game was to play it aggressively. Defensive strategies do not work when there are finite resources, since they simply attract speculative attacks. The CBR understands this:


“…the abandonment of unlimited foreign exchange interventions in the borders of the operational band will hamper prerequisites for speculative strategies against the ruble.

There is much less profit to be made from speculative attacks when the target refuses to defend against them. It’s a form of passive resistance, if you like.

Allowing the ruble to fall freely is an aggressive strategy on the part of the Russian central bank. And it is having the desired effect. Since the CBR’s announcement, the ruble has been in free fall, dropping by 11% in a week – and market players are panicking. Reuters reports that there are desperate calls for the central bank to intervene:


““This is full-blown panic, with signs of a self-fulfilling currency crisis,” Dmitry Polevoy, chief Russia economist at ING Bank in Moscow, said in a note. “At such times, the central bank should intervene, after all if this isn’t a risk to financial stability, then what is?”

The Russian official news agency ITAR-TASS reports that Russian households are converting rubles to other currencies:


“Russia’s two largest retail banks Sberbank  and VTB-24 admitted households’ increased demand for foreign currency over the past week. Specifically, VTB-24 said the demand had soared by 3-4 times, adding it had set aside foreign currency cash reserves in advance.




This is a bad sign. Increased domestic FX conversions are a serious risk factor for financial stability, since domestic banks can be bankrupted by excessive demand for FX liquidity. They are also a risk factor for hyperinflation.

But the CBR foresaw this:


“At the same time, in case of financial stability threats, the Bank of Russia will be ready to carry out additional interventions in the domestic foreign exchange market.

The CBR has no intention of allowing the ruble’s fall to cause a financial crisis. It will provide support on an ad hoc basis to calm panic and ease distress in domestic markets. Indeed it already seems to be doing so:

So the CBR has certainly not thrown in the towel. It has simply changed its game strategy. Now, far from attacking it, market players – both international and domestic – are looking to it for support. Game, set and match to the CBR.

Mind you, the CBR could still be defeated by the combination of falling oil prices and rising inflation. The possibility of domestic economic collapse is real, and there is little the CBR can do about it: if it raises rates to choke off inflation it weakens the economy further, but if it cuts rates to stimulate growth it risks an inflationary spiral. As in all countries, the fate of the domestic economy ultimately rests in the hands of politicians, not the central bank.

UPDATE: It’s not “game, set and match” to the CBR just yet. The ruble is falling again. It’s “game on”.


http://www.forbes.com/sites/francescoppola/2014/11/07/has-the-russian-central-bank-thrown-in-the-towel/

[lordtiberius]

In the currency wars, Ukraine is kicking Russian butt but hey sanctions don't work, right?  Win win?

[Gator]

The p/$ hit 48.5 in the morning then moved down to 46.5 and held steady there for the day.   Maybe the bottom has been hit.   The ruble can fall only so far with huge and steady dollar denominated revenues from oil sales. 

[sleepycat]

I only wish I have the technical expertise to play in the FX market. With the way the Rouble has been swinging lately there's gotta be some serious profit opportunities.

I wonder if the majority of the market speculators on the Rouble are western ledge fund managers or are they actual Russian investors trying to profit from the demise of the Rouble.

[AC]

I only wish I have the technical expertise to play in the FX market. With the way the Rouble has been swinging lately there's gotta be some serious profit opportunities.

I wonder if the majority of the market speculators on the Rouble are western ledge fund managers or are they actual Russian investors trying to profit from the demise of the Rouble.

What is that?  Either way I am sure the Putin propaganda machine will spin it as America's fault.

[AC]

The p/$ hit 48.5 in the morning then moved down to 46.5 and held steady there for the day.   Maybe the bottom has been hit.   The ruble can fall only so far with huge and steady dollar denominated revenues from oil sales.

Yet oil prices continue to drop.  How far away do you think Russia is from a repeat of 1998?

If the ruble continues to fall, and the price of oil continues to fall -- these two may just be what the Doctor ordered to save Ukraine from total Russian invasion.  Afterall it's simply not the same as 1956 when the Soviet Union could do what they wanted in Eastern Europe.

[ML]

  After all it's simply not the same as 1956 when the Soviet Union could do what they wanted in Eastern Europe.

I'm not so sure about that.  The  west seems to have no stomach for real resistance.

[AC]

I'm not so sure about that.  The  west seems to have no stomach for real resistance.

I'm not referring to that.  I am referring to the fact that the Russian economy is now so intertwined with the Worlds economy.  It seems that the sanctions coupled with low oil prices might cause a total economic collapse in Russia.

[lordtiberius]

So you are reversing yourself.  Turns out sanctions work after all.  Win win

[AC]

So you are reversing yourself.  Turns out sanctions work after all.  Win win

I am not reversing my opinion.  I still agree with Billy's analysis, which is that the sanctions are making Putin mad and increasing his popularity in Russia.  If the sanctions stop Putin from an all out invasion of Ukraine I will be surprised but very happy.

And until the West gives Ukraine some proper weapons this thing is far from over.  Even if Russia does not invade the separatists are firmly entrenched in Donetsk and Lugansk and all indications are that Russia has been resupplying them.  Do you deny that?  Do you deny that just prior to the cease-fire the Russians had routed the Ukrainians?  Do you deny that the Russians have far better weapons at their disposal?  Do you deny that Russia could easily have air-superiority over Ukraine if they chose to?

Do you also deny that most of the remaining people in those areas are more loyal to Russia than they are to Ukraine?

I'm sure in your fantasy world it's better to just deny reality and claim you are pro-Ukraine and I'm not because I dare to engage in critical thinking.  You are closer to the Stalinists then you realize.

[Boethius]

Do you also deny that most of the remaining people in those areas are more loyal to Russia than they are to Ukraine?

I would deny that.  Most don't have the means to leave, and most just want the war to stop. 

[calmissile]

I am not reversing my opinion.  I still agree with Billy's analysis, which is that the sanctions are making Putin mad and increasing his popularity in Russia.  If the sanctions stop Putin from an all out invasion of Ukraine I will be surprised but very happy.

And until the West gives Ukraine some proper weapons this thing is far from over.  Even if Russia does not invade the separatists are firmly entrenched in Donetsk and Lugansk and all indications are that Russia has been resupplying them.  Do you deny that?  Do you deny that just prior to the cease-fire the Russians had routed the Ukrainians?  Do you deny that the Russians have far better weapons at their disposal?  Do you deny that Russia could easily have air-superiority over Ukraine if they chose to?

Do you also deny that most of the remaining people in those areas are more loyal to Russia than they are to Ukraine?

I'm sure in your fantasy world it's better to just deny reality and claim you are pro-Ukraine and I'm not because I dare to engage in critical thinking.  You are closer to the Stalinists then you realize.

I have to disagree a little with your conclusions.  Particularly about the sanctions.  In the beginning I did not have any confidence they would have any affect.  While Putin publicly states that they are simply an annoyance, there is a lot of evidence they are having serious affects.  In fact, if they are ratcheted up they may well bring Russia to it's knees IMO.  It is currently nearly causing a currency collapse in Russia.  The public is converting to stronger currencies to the point that the banks are running out of them.  Another clue as to the affect of the sanctions is the response of many of the officials in the Kremlin.  They are bitching about them daily and making a big issue of it.  Putin can blow it off, but the rest of the government seems to be in near panic state and is getting into the news almost daily.

The silliness of the idea of Putin starting a nuclear war over Ukraine is just that....silly.  He is not going to risk the whole of Russia over Ukraine.  He did not have it before, and surely he is smart enough to realize that it would not be worth the costs.

Does anyone remember the Gulf War and how the coalition took out the military in rather short order?  First, a few planes with anti-radiation missiles go in and take out all the radar sites.  Anyone of them turned on and........poof.  No more ground fire at aircraft!  Next some close air support go in and take out the tanks, artillery, mortars, and terrorist camps.  The Ukrainians can clean up on the ground as the terrorists scramble for the border with good old Russia.

If Putin commits aircraft to the fight, he knows that the entire west will probably come to Ukraine's defense.   He would be stupid to do so.   Not to mention that at this stage every stinking ship he has in the region will become good target practice for the allies (including those in Sevastopol).

The only difficult issue remaining would be the terrorists that are holed up in the cities.  Unfortunately any that are left will have to be routed out with Ukraine troops.  I would think at this point they would be demoralized to the point of fleeing anyway.

[AC]

If Putin commits aircraft to the fight, he knows that the entire west will probably come to Ukraine's defense.   He would be stupid to do so.   Not to mention that at this stage every stinking ship he has in the region will become good target practice for the allies (including those in Sevastopol).

I think this is wishful thinking although there may have been some confidential communications along this line from Washington DC and Europe that we don't know about.

Yes the sanctions are doing some damage, but as Doll and others have said, Russians are accustomed to hard times.  No I don't think Putin will use Nuclear weapons, but now that his economy is boxing him into a corner, there is a good chance he will indeed invade Ukraine in order to make his supporters happy.  That is the problem of the sanctions working well -- they make him decide to go ahead with it, because he knows if he doesn't then his time of being in power in Russia may quickly come to an end.

It's certainly going to be interesting to see what develops.  Even if he remains in power and does not commit to a full-scale invasion of Ukraine I don't think there is much doubt that he has now created a "frozen conflict" in the areas in question which will likely be there for many years to come.

[AC]

I would deny that.  Most don't have the means to leave, and most just want the war to stop.

You said yourself that the perception of millions was that the events of Maidan did not represent their wishes.  If you watch the video posted by JohnDearGreen (vice news, Simon Ostrovsky) it's clear that the lady he interviews at the remains of the Museum has a perception that Donbass was always closer to the Russian Empire and then the USSR, and that W. Ukraine wanted to be closer to Europe.  It's clear that she believes what she is saying.  Perception is reality in most of the World.  What people perceive to be true for them, is what they perceive reality to be.

[calmissile]

I think this is wishful thinking although there may have been some confidential communications along this line from Washington DC and Europe that we don't know about.

Yes the sanctions are doing some damage, but as Doll and others have said, Russians are accustomed to hard times.  No I don't think Putin will use Nuclear weapons, but now that his economy is boxing him into a corner, there is a good chance he will indeed invade Ukraine in order to make his supporters happy.  That is the problem of the sanctions working well -- they make him decide to go ahead with it, because he knows if he doesn't then his time of being in power in Russia may quickly come to an end.

It's certainly going to be interesting to see what develops.  Even if he remains in power and does not commit to a full-scale invasion of Ukraine I don't think there is much doubt that he has now created a "frozen conflict" in the areas in question which will likely be there for many years to come.

Generally agree, however I would take with a grain of salt what Doll says.   While Russians have a history of enduring hardships in the past, most of what I read tells me that they have been getting used to a higher standard of living than those days.  I would suspect that a decline in their standard of living would have a similar reaction as the USA reducing welfare benefits to that crowd.   

[calmissile]

You said yourself that the perception of millions was that the events of Maidan did not represent their wishes.  If you watch the video posted by JohnDearGreen (vice news, Simon Ostrovsky) it's clear that the lady he interviews at the remains of the Museum has a perception that Donbass was always closer to the Russian Empire and then the USSR, and that W. Ukraine wanted to be closer to Europe.  It's clear that she believes what she is saying.  Perception is reality in most of the World.  What people perceive to be true for them, is what they perceive reality to be.

True, however I did not get the sense from any of the women that they were radically pro-Russian.  The feeling I got from the interviews was they they just want the fighting to stop.  In fact, none of them came across to me as being particularly anti-Kiev.  It's natural that they lived in a more Russian culture and language and feel more comfortable in that environment.

It was funny when one of the shopkeepers was asked about closing up shop and going home...... her response "Give me the money and I will close up and go home".     

One of the points that stuck out in my mind were the comments about Kiev outlawing the Russian language.  This women was still very angered by this action.  Clearly this was the most stupid mistake of the new Kiev government!  In fact, I think the new leadership should be reaching out much more to heal those wounds.

[Boethius]

Generally agree, however I would take with a grain of salt what Doll says.   While Russians have a history of enduring hardships in the past, most of what I read tells me that they have been getting used to a higher standard of living than those days.  I would suspect that a decline in their standard of living would have a similar reaction as the USA reducing welfare benefits to that crowd.   

I disagree.  I think Doll is absolutely spot on in her assessment. 

One of the points that stuck out in my mind were the comments about Kiev outlawing the Russian language.  This women was still very angered by this action.  Clearly this was the most stupid mistake of the new Kiev government!  In fact, I think the new leadership should be reaching out much more to heal those wounds.

Russian was never outlawed.  Its road to official language status was revised.


I think that would have been reversed in any event, to conform to EU standards.

[AC]

True, however I did not get the sense from any of the women that they were radically pro-Russian.  The feeling I got from the interviews was they they just want the fighting to stop.  In fact, none of them came across to me as being particularly anti-Kiev.  It's natural that they lived in a more Russian culture and language and feel more comfortable in that environment.

It was funny when one of the shopkeepers was asked about closing up shop and going home...... her response "Give me the money and I will close up and go home".     

One of the points that stuck out in my mind were the comments about Kiev outlawing the Russian language.  This women was still very angered by this action.  Clearly this was the most stupid mistake of the new Kiev government!  In fact, I think the new leadership should be reaching out much more to heal those wounds.

I noticed that too about her remarks about Russian language.  Whether it's true or not (I don't believe it's true after reading Stirlitz's comments) is not the point.  The point is that she perceives it to be true.  She also perceived that there was not a middle ground.  Clearly Putin and Russia have manipulated opinions.  Yet perception is reality.  Also what she perceives is that Ukrainian forces are deliberately shelling them.  The other women said the shelling has been daily, even during the ceasefire.  You must admit there has been very limited Western reporting about this.  The people there apparently feel that the government in Kiev is trying to kill them.  How would you or I feel if we were stuck there?  I agree they all want the fighting to stop.

[calmissile]

Russian was never outlawed.  Its road to official language status was revised.


I think that would have been reversed in any event, to conform to EU standards.

I am aware of that and agree with you.  However the perception of the Russian speakers is that it was outlawed.  They probably do not even know today the truth.  I can understand their reaction.

[JayH]

I am aware of that and agree with you.  However the perception of the Russian speakers is that it was outlawed.  They probably do not even know today the truth.  I can understand their reaction.

The problem I have with this being continually repeated is it gives it credence to something that is simply incorrect.
The reality is--the whole issue was trumped up by those with an  agenda that sort to create discontent.
Even today-many in the east are clueless as to who is attacking them.
Never forget-- a majot tenant of Russian propaganda is to cause confusion and not let people know the reality.
When you hear people in the east interviewed--it is abundantly clear that they are bye and large clueless as to what is going on.That is also evident with those that fled to Russia-- only having access to Russian lies and propaganda.

[lordtiberius]

AC, its good that you agree with me that sanctions are working.  Your failure to address Calimissile's assessment of Western support for Ukraine in the face of further escalation and your failure to properly assessment of popular sentiment in the occupied territories leads one to think you're ashamed of your earlier confused ramblings.  A simple retraction and apology would suffice, but I understand your pride is on the line.

Ukraine is free.  They will bear any burden, support any friend and pay any price to defend that freedom.  Would that we would demonstrate such a commitment.  If the words expressed here are any reflection of Western sentiment, it is easy to see, why such a commitment is not forthcoming.