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Private habits of Putin (Russian Crisis)
17-12-2014, 10:25 AM.
Post: #51
RE: Private habits of Putin
(17-12-2014, 09:59 AM)CityFarmer Wrote: Will Mr. Putin admit defeat, with his personality?

Kerry says Russia sanctions could end if Putin takes right steps

LONDON - Russia has made constructive moves in recent days towards reducing tensions in Ukraine, U.S. Secretary of State John Kerry said on Tuesday, and he raised the possibility that Washington could lift sanctions if Moscow keeps taking positive steps.

Speaking in London, Kerry said the United States and Europe could lift sanctions within days or weeks if President Vladimir Putin keeps taking steps to ease tensions and lives up to commitments under ceasefire accords to end the Ukraine conflict.

"These sanctions could be lifted in a matter of weeks or days, depending on the choices that President Putin takes," Kerry told reporters.

"Their sole purpose here is to restore the international norm with respect to behavior between nations," to ensure respect for borders, sovereignty and rights, he said.
...
http://www.todayonline.com/world/kerry-s...ecent-days

Actually Putin is a tough but not a stubborn guy. He is a masterful chess player Smile Like I posted below, all these talks abot DD/SS can be resolved once Ukraine is resolved Smile

(16-12-2014, 10:30 AM)specuvestor Wrote:
(15-12-2014, 05:55 PM)Boon Wrote: Why oil prices are so unstable:

John Kemp

Sun Dec 14, 2014

http://www.reuters.com/article/2014/12/1...W620141215

Agree with the article. The conundrum for the commodities market is that prices are not just dictated by the big oligopolictic players but also marginal players coming in and out. The rapid and wild price swings do not conform to the simplistic DD/SS theory. And oil has an additional geopolitical layer to it which makes it even more unpredictable.

I'm beginning to think that OPEC wants to mark oil at lowest for year end so that P1 reserves will be slashed drastically and hence credit for the marginal players. But longer term oil will no longer go above US$75 or so unless Ukraine issue is resolved.
http://www.valuebuddies.com/thread-5541-...#pid103235

We are starting to see the 2nd order impact emerging from the Russia crisis now:

"Shares of Chinese carmaker Geely are set to drop 10.6 per cent after it warned its earnings could halve this year.

The Hong Kong-listed company - whose parent owns Volvo of Sweden and the maker of London's black cabs - blamed an "unrealised foreign exchange loss" recorded by its Russian subsidiary as a result of the "abrupt" decline of the rouble"

http://www.ft.com/intl/fastft/252441/gee...it-warning
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17-12-2014, 12:40 PM. (This post was last modified: 17-12-2014, 12:44 PM by specuvestor.)
Post: #52
RE: Private habits of Putin
Good summary article on more second order impacts: 3rd order impacts will come in the form of counterparties if intermediaries like brokers and agents starts to fail. As posted Russia is inviting vultures to watch the fat lady sing by raising rates to 17%. They will need concerted efforts then just interest rates... but ooops they are largely isolated now. Will be interesting to see if China will want to fit into the picture... either RMB or USD swap lines or just O&G pre-payments to name a few.

"After the single worst day in Russia’s nine-month-old financial crisis, the fallout is spreading across global markets.

Pacific Investment Management Co. (PEBIX) is facing mounting losses on its Russian bond holdings; almost every bullish ruble option contract registered in the U.S. has been made worthless; and foreign-exchange brokers in New York and London told clients they’re no longer taking ruble trades. Sergey Shvetsov, a first deputy central bank governor, expressed astonishment at the scope of the collapse during a conference in Moscow.

“We couldn’t imagine what’s happening in our worst nightmare even a year ago,” Shvetsov, who oversees financial markets at Bank of Russia, said yesterday. He said the surprise interest-rate increase in the middle of the night, a 6.5 percentage-point move that failed to stem the run on the ruble yesterday, was a choice between a “very bad” option and and a “very, very bad” option.

The ruble sank beyond 80 a dollar, a record low, as panic swept across Moscow’s financial markets before it rebounded after Economy Minister Alexei Ulyukayev denied speculation the government would impose restrictions to stop Russians from converting cash into dollars. The currency ended the day at 67.9, down 5.4 percent on the day, while bonds and stocks also tumbled, sending the RTS equity gauge down the most since 2008. One-month ruble forwards strengthened 1.5 percent today, snapping a seven-day losing run in which they fell 26 percent.

Oil Collapse

The speed of the ruble’s retreat indicates policy makers are losing control as the six-month tumble in oil robs President Vladimir Putin of the hard currency he needs to sustain an economy faltering under the weight of international sanctions tied to the Ukraine conflict. The selloff in Moscow is being felt in other developing nations, where investors are pulling money amid concern that Russia’s financial struggles and the tumble in oil point to a global economic slowdown.

A Bloomberg gauge tracking the top emerging-market currencies fell to the lowest since 2003 while equity benchmarks in Dubai and Saudi Arabia lost more than 7 percent each yesterday. Indonesian policy makers propped up the rupiah as it sank to a 16-year low and the currency is down 0.3 percent today. The MSCI Emerging Market Index rebounded 0.2 percent, paring its losses for this month to 9.2 percent. Crude oil fell 1.5 percent in New York.

Pimco Losses

Pimco’s $3.3 billion Emerging Markets Bond Fund has been one of the hardest hit. It held $803 million of Russian corporate and sovereign bonds at the end of September, equal to 21 percent of total assets, an amount that’s more than double that of the benchmark it tracks, according to data compiled by Bloomberg. The fund has lost 7.9 percent in the past month, trailing 95 percent of its peers.

“The investment themes in Pimco’s portfolios are based on long-term ideas and views,” said Michael Gomez, the head of emerging markets at Pimco. “While emerging markets have been volatile, we think segments of the market offer compelling risk-reward opportunities for long-term investors.”

Traders and investors in the currency options market were also caught off-guard by the ruble’s 52 percent slide this year. In a market with hundreds of bullish call options worth more than $15 billion combined, only one of them -- a $5 million contract expiring a year from now -- is still profitable at the current exchange rate.

Worthless Options

Every single other contract is now out-of-the-money because they gave traders the right to buy the ruble at exchange rates that are stronger than yesterday’s closing level, according to data compiled by the Depository Trust & Clearing Corp. from clients of U.S. banks.

The volatility is proving too much for some brokers. New York-based FXCM Inc., the third-largest currency broker for retail clients, will stop offering the ruble versus the dollar and begin closing its customers’ trades while Alpari UK stopped clients from taking new positions.

Hedge fund Alden Global Capital is profiting from the turmoil sweeping across Russia’s financial markets. The $1.8 billion New York-based firm run by Randy Smith has been betting against the ruble for the past month and a half, according to two people familiar with the trade.

Government officials including central bank Governor Elvira Nabiullina and Finance Minister Anton Siluanov huddled outside Moscow yesterday to discuss ways to combat the crisis. The rate increase to 17 percent, taken less than 24 hours earlier, only managed to stoke a brief rally in the ruble.

In addition to denying that officials were considering currency restrictions, Ulyukayev, the economy minister, told reporters after the meeting that “of course” rates should have been raised earlier. No policy changes were announced.

Capital Controls

Speculation has been growing that foreign-exchange controls were imminent, with firms from Schroder Investment Management Ltd. to Skandinaviska Enskilda Banken AB (SEBA), or SEB, saying they were possible. Per Hammarlund, chief emerging-markets strategist at SEB, said the government could make it harder for depositors to swap cash into hard currency or require exporters to bring some earnings into the country.

While there were no initial signs yesterday of Russians lining up in downtown Moscow to pull their ruble deposits and buy dollars, Khanty-Mansiysk Otkritie Bank, the retail arm of the country’s second-largest private lender, said demand for foreign currencies was three to four times the daily average.

Even after rebounding late in Moscow, the ruble was still down 14 percent this week and 27 percent this month. It earlier fell the most in a day since the country defaulted and devalued the currency in 1998. Ten-year ruble bond yields jumped 3.05 percentage points to 16.28 percent while the annual cost of insuring against a debt non-payment climbed to 5.55 percent in the credit-default swap market, the highest since 2009.

‘No Bids’

“Our traders are informing me that we see no bids to buy rubles,” SEB’s Hammarlund said. “I thought 17 percent would give them at least a month of breathing space. We next have to look at the experience in 1998-1999. We are also one big step closer to capital controls.”

The ruble has kept plunging even after the central bank raised rates 11.5 percentage points this year and spent more than $80 billion in the foreign-exchange market, draining reserves to a five-year low of $416 billion. Economists surveyed by Bloomberg said they expect central bankers to step up intervention again, spending about another $70 billion.

Stagflation Risk

Russia, meanwhile, is sinking into stagflation.

A recession looms at the same time that inflation is soaring to a three-year high. The economy may shrink as much as 4.7 percent next year if oil, the country’s biggest export, averages $60 a barrel under a “stress scenario,” the central bank said earlier this week. Net capital outflows may reach $134 billion this year, more than double last year’s total. Prices for benchmark Brent crude fell below $60 yesterday, leaving them down 48 percent in the past six months.

While Putin’s approval rating remains near an all-time high on the back of his stance over Ukraine, the currency crisis risks eroding his popularity. There are few signs the crisis will fade any time soon.

“It’s very hard to stop the panic,” Vadim Bit-Avragim, a money manager at Kapital Asset Management LLC in Moscow, said by phone. “Everyone is betting against the ruble.”

http://www.bloomberg.com/news/2014-12-16...sinks.html
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Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

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17-12-2014, 05:02 PM.
Post: #53
RE: Private habits of Putin
Latest brief on Russia...

Russia finance minister says starts selling foreign-currency stock

MOSCOW - Russia's Finance Ministry said on Wednesday it was starting to sell its leftover foreign-currency stock and that it considered the rouble to be undervalued.

The ministry did not elaborate in its statement on which stock it was selling, or how much. REUTERS
http://www.todayonline.com/business/russ...ency-stock
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17-12-2014, 05:24 PM.
Post: #54
Private habits of Putin
Should follow Hongkee style. Buy rubles buy bonds and buy shares to kill the speculators.

Supporting ruble only provides short sellers the last resort buyer.


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17-12-2014, 06:50 PM. (This post was last modified: 17-12-2014, 06:52 PM by specuvestor.)
Post: #55
RE: Private habits of Putin
^^ Hongkongers timing was superb. That was almost the bottom of the crisis in Aug 1998. And they also made structural changes next day by making short selling illegal and people have to declare they are not shortselling. They know how to play the game

They also bought EUR when it was 0.87 all the way to 0.83 to the USD and people questioned why they speculated since their peg was USD and EUR was plunging and survival was in doubt in 2000.

The finance secretaries actually added a lot of value to HK...
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Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

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17-12-2014, 06:56 PM. (This post was last modified: 17-12-2014, 07:26 PM by BlueKelah.)
Post: #56
RE: Private habits of Putin
(17-12-2014, 06:50 PM)specuvestor Wrote: ^^ Hongkongers timing was superb. That was almost the bottom of the crisis in Aug 1998. And they also made structural changes next day by making short selling illegal and people have to declare they are not shortselling. They know how to play the game

They also bought EUR when it was 0.87 all the way to 0.83 to the USD and people questioned why they speculated since their peg was USD and EUR was plunging and survival was in doubt in 2000.

The finance secretaries actually added a lot of value to HK...
Value which has gone back to mother China, oh wait hk already owned by China then.. Heh

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17-12-2014, 08:55 PM.
Post: #57
RE: Private habits of Putin
In software term, the "ripple effect" of ruble...

Apple says online store in Russia is down due to ruble fluctuations

SAN FRANCISCO - Apple confirmed on Tuesday that it has taken down its online store in Russia due to extreme fluctuations in the value of the rouble.

It said in a statement that it is currently reviewing pricing. REUTERS
http://www.todayonline.com/business/appl...uctuations
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17-12-2014, 10:40 PM.
Post: #58
RE: Private habits of Putin
Quote:Chess moves to transform world politics

Political analysts often use chess as a metaphor to describe world affairs. States and peoples move around the board struggling to make incremental gains. Every now and then, a grandmaster arrives and transforms the game with a new and unexpected gambit — something like Mr Richard Nixon and Mr Henry Kissinger’s “opening to China” in 1972.
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Opinions differ as to whether Mr Vladimir Putin is a political grandmaster or a fool who is on the verge of being checkmated.

The Russian President’s admirers saw his annexation of Crimea as a bold gambit that caught the West off guard. (At the time, Mr Putin’s admirers in the West sometimes said: “He’s playing chess and we’re playing checkers.”) But with the Russian economy reeling, it looks increasingly like Mr Putin’s move was too impetuous. In an effort to recover ground, the Russians are now pursuing a game plan that could be called the new Yalta defence.
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18-12-2014, 10:54 AM.
Post: #59
RE: Private habits of Putin
The impact reaching the shore of Hong Kong fixed income market...

Russia Mess Spreads to Hong Kong as Investors Dump Dim Sum Debt

Russia’s crisis is being felt as far as Hong Kong’s Dim Sum debt market with the average price of yuan-denominated notes slumping to the lowest in 15 months.

Notes issued by Russian lenders including OAO Gazprombank and VTB Group have tumbled 1.65 percent on average in December as the ruble plunged to an all-time low, Bank of America Merrill Lynch’s Dim Sum Corporate Index shows. That pushed losses on Russian Dim Sum debt for the year to 2 percent, the only negative return out of 22 countries tracked by the gauge.
...
https://www.bloomberg.com/news/2014-12-1...nsentTrack
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18-12-2014, 04:18 PM.
Post: #60
RE: Private habits of Putin
A view from a Russia's senior officer...

Western sanctions may last for decades: Russian minister tells newspaper

MOSCOW - Western sanctions over Russia's role in the Ukraine crisis are likely to last "for a very long time", possibly decades, Economy Minister Alexei Ulyukayev told Vedomosti newspaper.

"When a U.S. law is passed it is very hard to change it afterwards - looks like it will be in place for decades," Ulyukayev said in an interview published on Thursday.

Russia's economy is heading for recession, dragged lower by sanctions imposed by the West over Ukraine and weak oil prices, a cornerstone of state revenues. The rouble has lost more than 45 percent against the dollar since the start of the year.

Ulyukayev said a lack of structural reform of the economy had partly set Russia up for "the perfect storm".

He added that if there were no sanctions, no falling oil prices and if "we had not done some foolish things" which he did not elaborate on, the Russian economy could show annual growth of between 2.5 and 3 percent.

He added that sanctions may become tougher next year with the situation on the oil markets worsening further.

"The situation is so hard to predict that we cannot be prepared for its changes in the future ... How should we behave then? Write one more stress-scenario in addition to (the oil price at) $60 (per barrel)? Let's do it for $40, $20 and $10," he said ironically. REUTERS
http://www.todayonline.com/world/western...-newspaper
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