More Bad News for Russia

[Muzh]

[jone]

It is great today, problem is that tomorrow we may have to pay double.

Hey, Shadow, why the long face?  Most people would rejoice at having a windfall. 

[JayH]

Jone , you have to stay on cue with the topic......only 'bad' news is reported here.

I am guessing you interpreted as meaning a better rate--I read higher as more rubble to the USD  ie--   currently 62 and heading for 80 --that being higher!!  So that is BAD news !!

[sleepycat]

The midget president must be tearing out whatever hair he has left at the sight of the continuing tanking oil price.

http://news.yahoo.com/oil-slumps-lows-supply-glut-005658248.html

 

[AkMike]

Time for him and his oligarchs to try a time honored round of Russian Roulette with a full chamber.

 If the oil continues like this or stays at this level Russian government will fold in 45-60 days.

[jone]

Actually, Mike,

I see the Russian economy as much more resilient than tanking immediately.  Perhaps you were employing hyperbole?

[LAman]

Time for him and his oligarchs to try a time honored round of Russian Roulette with a full chamber.

 If the oil continues like this or stays at this level Russian government will fold in 45-60 days.

Unfortunately the situation in Ukraine is worse. I know the talk here is More Bad News for Russia but things
are not looking up in next few years. 

http://www.bloomberg.com/news/2015-01-05/ukraine-bonds-at-60-cents-seen-signaling-risk-of-default.html?cmpid=yhoo

[fathertime]

 If the oil continues like this or stays at this level Russian government will fold in 45-60 days.

That sounds like an exaggeration to me....but we shall see in 45-60 days if oil stays at this price what the result is on the Russian government...   


Fathertime!

[JayH]

Actually, Mike,

I see the Russian economy as much more resilient than tanking immediately.  Perhaps you were employing hyperbole?

There is a solid chance that crisis level is not to far away--I wrote sometime ago that the Russian reserves were less than half what they claim--hence them declining to keep attempting to shore up rubble price. Spasmodically they have attempted to again- but only very temporary relief from the downward slide.
Russia has attempted and is attempting to cajole others into helping(saving?) them-- an example of how little understanding of the depth of of distaste and contempt the world has for Russia right now.
To reverse that-- Putin would have to make a huge climbdown and it is highly unlikely that would happen .
My guess--they will attempt to negotiate to hang on to as much as possible .

Meanwhile--the slide continues

1.00 USD   =   62.6600 RUB
US Dollar   ↔   Russian Ruble
1 USD = 62.6600 RUB   1 RUB = 0.0159591 USD
Convert again
RUB/USD thumbnailView Chart
Mid-market rates: 2015-01-08 01:50 UTC

[Brasscasing]

Does anyone here have personal knowledge of Russian Conditional Currency Units (UE) or 'uslovnaya yedinitsa'?

It's apparently a form of 'alternate currency' in Russia tied to the USD or Euro (for stability) and it's being traded, the only word I can apply here I guess, by Russian business and population to avoid using the legal but worthless Ruble.

Is this legal tender or some form of black market coupon?

Who prints the stuff and is there coinage?

And how the hell did they (who ever "they" are) manage to tie it to a stable western currency?

...Trust the Russians to find a way around their own tanking currency.

Hmmm, I think I'll print Brass Bucks as an alternate to CAD...

Brass

[bagalia]

Does anyone here have personal knowledge of Russian Conditional Currency Units (UE) or 'uslovnaya yedinitsa'?

It's apparently a form of 'alternate currency' in Russia tied to the USD or Euro (for stability) and it's being traded, the only word I can apply here I guess, by Russian business and population to avoid using the legal but worthless Ruble.

Is this legal tender or some form of black market coupon?

Who prints the stuff and is there coinage?

And how the hell did they (who ever "they" are) manage to tie it to a stable western currency?

...Trust the Russians to find a way around their own tanking currency.

Hmmm, I think I'll print Brass Bucks as an alternate to CAD...

Brass

If I understand you correctly, it is not what you think. It basically means dollars. So if you wanted to buy something from me and asked how much it costs I might say 200 UE which would mean 200 dollars. In USA speak we might say 200 bucks vs dollars.

[mendeleyev]

Russian Conditional Currency Units (UE)

Brass, the Moscow Times did a piece on this recently. http://www.themoscowtimes.com/business/article/conditional-currency-makes-comeback-as-retailers-lose-trust-in-russia-s-ruble/513307.html

[Brasscasing]

If I understand you correctly, it is not what you think. It basically means dollars. So if you wanted to buy something from me and asked how much it costs I might say 200 UE which would mean 200 dollars. In USA speak we might say 200 bucks vs dollars.

Hiya Bagalia welcome aboard!

Ok, I've had time to look in to this a bit and I think you're right. Most of the links were in Russian but I found something that makes some sense here...

Press // Russian press

Companies Switch From Rubles to U.E.

..."While conditional units — known as u.e. in Russian — were originally a euphemism for the U.S. dollar during the period of the ruble's instability in the 1990s, it has since come to represent values ranging from the dollar to the euro to a ratio between the two.

 The government, fueled by complaints from confused buyers and pride in the then-robust ruble, initiated a crackdown on conditional units from 2004 to 2006. But a loophole provided by two competing pieces of legislation suggests that there is room to maneuver.

 Companies are maneuvering as they scramble to minimize losses from the depreciating ruble, which has lost nearly 20 percent of its value since November. The Central Bank said Thursday that it had "finished" with the devaluation of the ruble.

 Real estate developer PIK Group began listing its prices in conditional units at the beginning of January, spokeswoman Natalya Konovalova said. The company calculates the mean of the dollar and the euro based on Central Bank rates, and clients pay the company the equivalent amount in rubles.

 "The use of conventional units was around four years ago, and now because of the economic downturn a lot of builders are using this form of measurement again," she said.

 Most developers are quoting prices in dollars or conditional units these days, she said.

 The use of conditional units is appearing in other sectors as well. Advertising agency Begun has started selling online ads for 2 to 50 conditional units apiece. The trend is also popular in the auto sector, where foreign cars produced by BMW, Toyota, Mazda and Mitsubishi are priced in conditional units based on euro or dollar rates, Autonews.ru reported."...

http://neftegaz.ru/en/press/view/5566

The website is dated today but I'm not sure how recent the actual article is.

I'm still a bit confused as to how this system works though. It seems all some Russian companies are doing is charging American/EU prices for Russian goods and services. 

Brass

Edit: Just reading it now Mendy, thanks.

What's your take on this? Seems a bit fantastical to me.

[AkMike]

Russia faces 'perfect storm' as reserves vanish and derivatives flash default warnings

BNP Paribas says Russia no longer has enough reserves to cover external debt and enters this crisis 'twice as levered' as it was before the Lehman crash


Ambrose Evans-Pritchard
By  Ambrose Evans-Pritchard, International Business Editor

9:02PM GMT 06 Jan 2015

Russia’s foreign reserves have dropped to the lowest level since the Lehman crisis and are vanishing at an unsustainable rate as the country struggles to defends the rouble against capital flight.


Central bank data show that a blitz of currency intervention depleted reserves by $26bn in the two weeks to December 26, the fastest pace of erosion since the crisis in Ukraine erupted early last year.


Credit defaults swaps (CDS) measuring bankruptcy risk for Russia spiked violently on Tuesday, surging by 100 basis points to 630, before falling back slightly.


Markit says this implies a 32pc expectation of a sovereign default over the next five years, the highest since Western sanctions and crumbling oil prices combined to cripple the Russian economy.


Total reserves have fallen from $511bn to $388bn in a year. The Kremlin has already committed a third of what remains to bolster the domestic economy in 2015, greatly reducing the amount that can be used to defend the rouble.



The Institute for International Finance (IIF) says the danger line is $330bn, given the dollar liabilities of Russian companies and chronic capital flight.

Currency intervention did stabilise the exchange rate in late December after a spectacular crash threatened to spin out of control, but relief is proving short-lived.

The rouble weakened sharply to 64 against the dollar on Tuesday. It has slumped moe than 20pc since Christmas, with increasing contagion to Belarus, Georgia and other closely-linked economies.

There are signs that Russia’s crisis may undermine President Vladimir’s Putin’s Eurasian Economic Union before it has got off the ground. Belarus’s Alexander Lukashenko is already insisting that trade be carried out in US dollars, while Kazakhstan’s Nursultan Nazarbayev warned that the Russian crash poses a “major risk” to the new venture.

The rouble is trading in lockstep with Brent crude, which has continued its relentless slide this week, falling to a five-year low of $51.50 a barrel. “If oil drops to $45 or lower and stays there, Russia is going to face a big problem,” said Mikhail Liluashvili, from Oxford Economics. “The central bank will try to smooth volatility but they will have to let the rouble fall and this could push inflation to 20pc.”

Under the Russian central bank’s “emergency scenario”, GDP may contract by as much as 4.7pc this year if oil settles at $60. The damage could be worse following the bank’s contentious decision to raise rates from 9.5pc to 17pc in December. BNP Paribas says that each 1pc rise in rates cuts 0.8pc off GDP a year later.



BNP’s Tatiana Tchembarova said the situation is more serious than in 2008, when Russia had to spend $170bn to rescue its banks. This time it no longer has enough reserves to cover external debt, and it enters the crisis “twice as levered”.

Mr Putin has imposed partial capital controls by forcing companies to repatriate foreign currency. This has bought time and shored up the rouble for a few days, but it is a disguised form of reserve depletion since many of these companies will need dollars to repay debt.

Many of these companies are pillars of the Russian economy or energy champions. Their dollar debts are implicitly liabilities of the Russian state since these firms cannot be left to default. The oil giant Rosneft has requested $46bn in state aid to help meet repayments and cover investment.

Igor Sechin, Rosneft’s chairman, expects oil to recover in the second half of 2015 and fluctuate between $70 and $75 but warned that the group would have to retrench. “Some high-cost projects will be postponed,” he said. Analysts at Sberbank said the group faces a “very difficult year”.

The total foreign debt of Russian companies and state entities is $654bn. They have to repay roughly $10bn a month since they are shut out of international capital markets and cannot roll over loans.

The IIF’s Lubomir Mitov said the oil crash could leave Russia with a current account deficit of 3.5pc of GDP. Each $10 fall in crude cuts export revenue by 2pc of GDP. This comes on top chronic capital flight and the collapse of inward flows due to sanctions. The overall “financing gap” could soon reach 10pc of GDP, putting enormous strain on the rouble. “It’s a perfect storm,” he said.

The interest costs on hard-currency debt have suddenly doubled in rouble terms. While commodity exporters earn matching dollars, Russian property developers and domestic companies with dollar-debt have no such buffer.

Russia’s RTS index of stocks has fallen by 62pc since early 2011 but smaller companies have been hit far harder. Kingsmill Bond, Sberbank’s chief strategist, said Russian equities are among the cheapest in the world and are trading on fear, ignoring the country’s strategic depth. “People have been selling indiscriminately. Once the oil price stabilises, it will be a perfect time to buy illiquid domestic stocks, like the homebuilder ISR,” he said.

Mr Bond said brave investors who bought Russian stocks at the nadir of the crisis in 2008-2009 were rewarded with gain of up 1,000pc. “First we have to wait for oil to hit bottom,” he said.

[JayH]

Russia faces 'perfect storm' as reserves vanish and derivatives flash default warnings

BNP Paribas says Russia no longer has enough reserves to cover external debt and enters this crisis 'twice as levered' as it was before the Lehman crash

Russia’s foreign reserves have dropped to the lowest level since the Lehman crisis and are vanishing at an unsustainable rate as the country struggles to defends the rouble against capital flight.

Central bank data show that a blitz of currency intervention depleted reserves by $26bn in the two weeks to December 26, the fastest pace of erosion since the crisis in Ukraine erupted early last year.


Markit says this implies a 32pc expectation of a sovereign default over the next five years, the highest since Western sanctions and crumbling oil prices combined to cripple the Russian economy.


Currency intervention did stabilise the exchange rate in late December after a spectacular crash threatened to spin out of control, but relief is proving short-lived.

The rouble weakened sharply to 64 against the dollar on Tuesday. It has slumped moe than 20pc since Christmas, with increasing contagion to Belarus, Georgia and other closely-linked economies.

“The central bank will try to smooth volatility but they will have to let the rouble fall and this could push inflation to 20pc.”
 

Throw in that the "official" numbers in some areas are at best "suspect" and like a lot emanating out of Russia-likely to be untrue. It is not likely that the numbers are being reported conservatively!!

[AkMike]

But, but, but, If it's shown on RT it has to be correct!

Right?

[AkMike]

Site "Peacemaker" published information about nine thousand terrorists





Active assistants in gathering information about terrorists who are fighting against Ukraine were Russians

This is your page on Facebook written adviser Interior Minister Anton Gerashchenko.

"A few weeks ago I presented a project to collect data on terrorists and separatists, a group of like-minded people to help in the Interior Ministry and SBU - site Peacemaker" - wrote Gerashchenko.

As of January 7 Online harvested and processed about 9000 terrorists and their supporters. And that's just the beginning.

Site "Peacemaker" made considerable commotion in terrorist and separatist circles.

According to information gathered by the site "Peacemaker" to block posts on departure from the area TUs were detained about 150 terrorists and their supporters who thought their arts nobody knows.

Bandits and terrorists came to this site and was horrified to learn that all their innocent Self with guns and grenade launchers collected and included the careful hands of volunteers and their boastful escapades ever recorded and will be used against them.

And among the most active volunteers were thinking Site Russian citizens who were massively send by e-mail website information of Russian terrorists, mercenaries and Russian soldiers, they found a Russian social networks and forums.

With the help of Russian friends Ukraine, we now have the personnel lists a number of units of the Russian armed forces without a declaration of war invaded the Ukraine and kill our citizens.

These lists are proof of unleashing an aggressive war Putin at the upcoming International Tribunal on Crimes of Ukraine.

Thanks to the active support of the idea of ​​gathering public information about gangsters and terrorists became aware of the fact that in the last month in social networks have closed their accounts or started pretending "poor sheep" 30% previously active supporters of ideas "New Russia".

"They were probably scared so much the idea sooner or later bear criminal responsibility for their actions and become persona non grata in the civilized world" - Gerashchenko wrote.

It is also interesting that after the presentation of the site "Peacemaker" his interest in foreign intelligence - the CIA, FBI, European intelligence and counterintelligence.
 The reason is simple - civilized countries, drawing from the site "Peacemaker" about pro-terrorist fighters will create their own databases of suspicious persons and persons must disarm and isolated from society.

Another interesting aspect of the success of the website "Peacemaker" is that criminals and terrorists, finding themselves on the site, start to think about what they can expect in the near future if they usually stay alive and not follow in the wake Hell for "Batman" and a group of his fellow killed in an ambush by his own accomplices in "FSC".

Hotline SBU, after the execution group "Batman" called dozens of militants to the question - how can you be sure of amnesty to voluntary transition to the Ukrainian side.

All of them provided security guarantees if they do not have time to do grave and especially grave crimes, and if they will assist in exposing their less prudent associates that are on the dark side.

Anton Gerashchenko noted that telephone "hotline" is protected by listening, because all the militants, who want to collaborate with the SBU guaranteed anonymity. "For your safety, the militants-terrorists are the temporarily-occupied territory or Russia, it is recommended to call via Skype, or use other means of Internet telephony. So FSB security services and militants can not determine where you called the hotline and how SBU phone number You use "- he wrote.

If you do not know themselves how to use Internet telephony - ask a friend whom you trust and who has these skills.

In the future site "Peacemaker" will become like Vienna Simon Wiesenthal Center, which since the late forties and is now engaged in tracking and catching Nazi war criminals.

Only in this case are criminals who destroyed the people of Ukraine - traitors, kollabortsionistov, Russian and other mercenaries and military personnel involved in unannounced and therefore illegal war with Russia.

[jone]

The worm turns.   I read this dispatch, Mike, and believe it will impact a number of potential fighters.  Ultimately Russia has not been very protective of its mercenaries.  Russia still claims plausible deniability.  Imagine, tomorrow, that Putin cuts a deal to get his economy moving again.  Any fighters in Eastern Ukraine become immediate pariahs.  And Russia will not even remember ever having done business with them.   

[AkMike]

Oh gee whilkers!


Then they'd get what they deserve!


 Here's the main 'Peacemaker site'.

http://psb4ukr.org/

[lordtiberius]

The political murder of Batman was that to prevent him from arming groups hostile to the Kremlin?

[Doll]

Oh gee whilkers!


Then they'd get what they deserve!


 Here's the main 'Peacemaker site'.

http://psb4ukr.org/

[AkMike]

Report Names Birthplaces of Russian Soldiers 'Killed in Ukraine'
The Moscow Times Jan. 07 2015 15:09

Activist website Open Russia has published a map detailing the birthplaces of all Russian soldiers believed to have died fighting in Ukraine in 2014, with the largest group reported to have come from Moscow.

The report is based on a list of names released in November by the Gruz-200 group, a pro-Ukrainian grassroots organization that used publicly available information to determine the number and identities of 227 men believed to have died fighting in Ukraine in 2014.

The information relies on media reports and interviews with relatives of the deceased. Open Russia issued a disclaimer saying there was no way to verify whether all information obtained from Gruz-200 was accurate, but that Open Russia had conducted its own checks of the information offered.

Information on the deaths of Russian soldiers believed to have died in Ukraine has come largely from activists and opposition-minded journalists, while Russia's Defense Ministry has maintained that no Russian soldiers were sent to Ukraine.

Many journalists and Western leaders have maintained that there is ample evidence of Russia's direct involvement in the conflict.

The report published by Open Russia on Tuesday claimed that 15 Russian soldiers killed in Ukraine last year came from Moscow, 10 from recently annexed Crimea, 11 from the restive North Caucasus republic of Dagestan and nine from St. Petersburg.

Another nine were said to have come from the Rostov region, which is close to the border with Ukraine. The southern Krasnodar region just east of Crimea reportedly lost nine soldiers.

Chechnya also appeared on the list, with seven Russian troops reported to have died in Ukraine last year having come from the predominantly Muslim republic, the leader of which has expressed support for the separatists in eastern Ukraine.

In a separate report, Open Russia is compiling detailed information on each of the soldiers reported to have died in the line of duty. A statement on the website says all of the information has been verified as best as it can be.

"In each case, we search for confirmation, try to determine the time and location of death and the most trustworthy sources," the statement said.

An initiative among activists and journalists to prove that Russian soldiers were sent to Ukraine kicked into high gear in mid-November, when 12 Russian paratroopers were buried in the Pskov region, their cause of death unknown.

Speculation ran rampant that the men had died fighting alongside separatists in eastern Ukraine, although Russia's Defense Ministry denied this and refused to disclose information on their cause of death.

The soldiers' grave markers were removed after journalists began asking questions, and an attack on several journalists who went to Pskov to research the soldiers' deaths fueled further speculation of a cover-up.

http://www.themoscowtimes.com/article/514112.html

[AkMike]

Lithuania Publishes Survival Manual in Case of Russian Invasion

By Damien Sharkov   1/7/15 at 6:29 PM


Lithuania’s national defence minister Juozas Olekas unveiled a new public information book entitled ‘How to act in extreme situations or instances of war’ at a press conference on Tuesday evening, prompted by the threat of a Russian invasion, Baltic news service Delfi reports.

Olekas was speaking in the Lithuanian capital of Vilnius, at the launch of a new joint project between the ministry of defence and Lithuania’s fire brigade. The project aims to educate the population about what to do in emergencies and war-time situations, which the defence minister said has been made more urgent due to “Russia’s recurring aggression against its neighbours - presently in Ukraine”.

Speaking to the gathered journalists, Olekas said the project would culminate in the general release of the manual which would instruct Lithuanians “to not only know how to act during the organization of civil resistance, but also how to act under battlefield conditions."

The book is almost 100 pages long and hard copies of it will be distributed by the ministry of national defence in secondary schools, public libraries and in non-governmental organisations, while an e-book version will be made available for download from the ministry of defence website as soon as next week, according to Olekas.

Interestingly, the project is intended to address issues of a “hybrid war”, a term which has been use by the Ukrainian government to describe Russia’s tactics in its territory. They have accused Russia of carrying out small-scale, covert military incursions in Ukraine whilst also skewing the news agenda to misinform the east Ukrainian population about the cause of the conflict and referring to the Ukrainian government as an “Illegitimate… Kiev junta”.

Olekas said the manual includes advice on conflicts in which “there are a number of elements that might vary and resemble civil-life situations.”

The Lithuanian booklet supposedly contains information on subjects including changes in government after a declaration of war, when a building ought to be evacuated and how to react to natural disasters.

Recently Russian president Vladimir Putin has adopted a similar rhetoric about Lithuania and its Baltic neighbours to the one he used to describe pro-EU protesters in Kiev last year. While on a visit to Serbia in October last year he warned that “open neo-nazism” had become “commonplace” in the Baltics.

Lithuania, Latvia and Estonia, each of whom have large Russian speaking minorities, have experienced an enormous spike in the number of Russian military incursions in their airspace and waters in the last few months. 

Lithuania’s president Dalia Grybauskaitė has been one of the most outspoken critics of Russia, most recently moving to restrict the broadcast of Russian state channels on Lithuanian television.

Unlike Latvia and Estonia, where the Russian speaking minorities comprise of approximately a quarter of the total population, Lithuania has a smaller Russian minority - around 6% according to the country’s last census in 2011.

Lithuania does, however, border the Russian enclave of Kaliningrad, home of one of Russia’s largest historic military bases and its own membership in NATO has raised its geographic significance to Moscow as NATO has an airbase near the Lithuanian city of Šiauliai from which NATO ‘air police’ patrol flights take off and land.

http://www.newsweek.com/lithuania-publishes-book-educating-citizens-how-respond-russian-invasion-297347

[AC]

The worm turns.   I read this dispatch, Mike, and believe it will impact a number of potential fighters.  Ultimately Russia has not been very protective of its mercenaries.  Russia still claims plausible deniability.  Imagine, tomorrow, that Putin cuts a deal to get his economy moving again.  Any fighters in Eastern Ukraine become immediate pariahs.  And Russia will not even remember ever having done business with them.   

This story shows the fragile nature of the life of a Russian soldier who makes the decision to go and fight in the Donbas.  It also shows that the soldiers are trained to deny they were ordered to go there, and this adds to the probability that they will soon be forgotten if they die.  It's an Orwellian system stacked against the likes of Petr Khokhlov, a former orphan who became a professional soldier in Russia, and likely went to the Donbas in hopes of making even more money as a paid "volunteer".  Read the story carefully and you will see how easy it is for Russian officials to deny sending him there.



excerpt
"The video, posted by the S.B.U., Ukraine’s internal security service, showed what seemed to be an interrogation. It began with Petr introducing himself as a “citizen of the Russian Federation.” A green curtain hung behind him, the only visible detail in an otherwise featureless tableau. Under questioning, Petr described his involvement in an act of outright aid to Russian-­speaking rebels, who by then were three months into a grinding war with the government in Kiev. His brigade, he said, was stationed in Rostov, a region of Russia that borders Ukraine. After a month of living in tents, the soldiers received an order from the company commander. They were told to strip 14 armored vehicles of all identifying markings, everything from the license plates to the serial numbers on the gun turrets, and then drive them toward the border. There, Petr told his interrogators in a rushed monotone, “we were told that the vehicles were handed off to some Chechens, and they were to be passed to the rebels.

This happened several times, Petr explained, listing the last names of the officers who gave the orders: Sashenko, Polomotov, Dultsev. Sergey noticed that at certain moments in Petr’s account — when he talked of passing military hardware to the rebels or of seeing separatist fighters fire grenades and mortars at civilians — the officers standing next to him in the draft office muttered, even winced. “He knows a lot of information,” one said ominously."


http://www.nytimes.com/2015/01/11/magazine/a-russian-soldier-vanishes-in-ukraine.html?_r=1

[AkMike]

That was very good AC!
Thanks