So you say its not about the people but you wont watch F1 . You put politics before sport and prefer to watch the money exchange in the hope the rubal crashes robbing the people of savings while you get your jollies of. Ok thats weird
Valeria Hontareva heading the Central Bank of Ukraine does not have the understanding of her political importance on the world scene when she can yuck it up with her Russian counterpart and especially when viewed by the world. If she considers the days events normal, surely it will only open the door to weak sisters in the west continuing economic pressure. She should present a posture of non acceptance of the military and economic war with Russia. She should resign and a stronger presence be put in place.
There are men on the lines and innocents are dying, as well as fortunes being lost. She just doesn't understand. Soviet stoicism would be a better posture in this situation. Take on the moronic western look and smile. Maybe I have assumed some eastern traits of my own.
Pavel Gubarev, self-proclaimed governor of the self-proclaimed People's Republic of Donetsk, is in a Russian hospital, reportedly unconscious in serious condition.
The car in which he was traveling came under fire (perhaps small arms, not clear to me), and then crashed into a pole. This incident occurred inside rebel-controlled Ukrainian territory.
Even if Gubarev doesn't recover from his injuries, the effect on the "Republic" may not amount to much. They are holding their own elections in November, and apparently Gubarev did not file to participate in the election by the deadline.
Good for the Saudi's, if the Yanks and EU etc. can't achieve it by themselves then nothing like some Middle East participation:
The vice-president of Russia's state-owned oil behemoth Rosneft has accused Saudi Arabia of manipulating the oil price for political reasons. Mikhail Leontyev was quoted in Russian media as saying:
Prices can be manipulative. First of all, Saudi Arabia has begun making big discounts on oil. This is political manipulation, and Saudi Arabia is being manipulated, which could end badly.
The news comes as Reuters reports Saudi officials have been privately admitting to oil market participants that they are comfortable with lower oil prices. According to the news service, the Organization of the Petroleum Exporting Countries (OPEC) is willing to accept prices as low as $80 a barrel for as much as the next two years.
Falling prices are of particular concern to Russia. Russia needs high oil prices to buoy its economy. The country has seen its economic performance slow under the weight of sanctions over Ukraine and weakening domestic demand. The Russian Central Bank forecasts growth over 2014 to be a meager 0.4%, improving marginally to between 0.9%-1.1% in 2015.
The problem is that Russia's latest budget requires oil prices to average at least $100 a barrel in order to cover the government's spending promises. The government already needs to borrow around $7 billion from foreign investors next year and as much as 1.1 trillion rubles ($27.2 billion) from domestic investors. Given the country's sanctions-imposed isolation from international bond markets, any additional borrowing would be a big concern for policymakers in Moscow.
Finance Minister Anton Siluanov has already acknowledged that the budget forecasts for both Russian GDP growth and oil prices are "optimistic." During the Reuters Russia Investment Summit in September he was quoted as saying:
There are risks to economic growth rates. It is a rather optimistic forecast; there are risks to the oil price. Without a doubt, this and the next year we will have to try very hard to ensure the planned growth rates.
If the forecast growth fails to materialize and the oil price continues its slide it could force the Russian government into an embarrassing retreat on spending commitments and increase the country's economic woes.
Thanks for your post of this info from Reuters! Saudi Arabia's position is complete news to me.
I just checked Urals (Russia's crude-oil benchmark): it has already dropped to $88.07 / bbl.
If indeed OPEC can maintain oil in the low 80s, and what I have been reading about Russia's financial situation is correct, then Putin is finished. Attentive readers of my "economic impact" thread may remember that a Russian government insider recently said that if petroleum drops to $80, Russia would have to "sell the Kremlin".
Already, Putin's regime has fallen into a sort of cannibalism. Since Putin took the reins of power 14 years ago, Russia's backward march to Soviet conditions has not only been political: Putin has re-socialized the economy. I recently read an assessment that more than 50% of Russia's GDP is now owned or controlled by the Kremlin.
It's important to remember, that most of Russia's present economic woes are NOT due to sanctions ... they are because Russia's economy is surprisingly weak for a country with so many resources. Sanctions are merely aggravating the decline. The main thing Russia "makes" (either material or intellectual/artistic property) that the rest of the world wants, is weaponry and trucks. Nearly everything else is internal consumption, or "extractive" industries in which Russia exports its natural wealth (petroleum, metals, timber, fertilizer).
Petroleum alone is near 30% of Russia's GDP, and about 2/3 of its exports. Russia's economy has looked strong during Putin's time, but about half of the growth in GDP has been petroleum. [Remember, when an economy starts at a very low baseline, simply inching toward average looks like massive GDP growth (China, for example), and does not represent actual economic strength. Similarly, when such a backward economy stops growing or merely slows, the pain to average citizens is much worse than a slowdown or recession in a wealthy country.]
Two factors that magnify the bad news for Russia:
1. Although Russia is now the world's largest petroleum exporter, and undoubtedly has vast petroleum reserves ... Russia may be running out of petroleum that can be extracted at low cost. Most of Russia's untapped reserves, for geological and/or geographic reasons, are likely to be very expensive indeed to get out of the ground. As a practical example, Russia's recent deal with China (which bothered stevc so badly) requires Russia to open new gasfields (China doesn't want to compete with Europe for existing gas production). Because China exploited Russia's desperation to show that it can withstand sanctions, the contract price was very tough indeed. Based on projections of what it will cost to develop and operate the new gas fields and pipelines, Russia will be selling the gas to China approximately at cost. Big win for Russia, huh?
Three consequences of running out of "cheap petroleum":
* opening untapped reserves will require enormous amounts of capital, nearly impossible to raise inside Russia as it is now organized (they require foreign investment, presently not available)
* the unit cost of petroleum from those reserves will be higher than other sources around the world
* at low petro prices, the only way to sell these expensive products will be at a loss: better to leave them in the ground, or not develop the fields at all
2. Although petroleum demand remains strong at present, in order for the world to save itself both economically and physically from climate devastation, it will be necessary to wean from oil. In the long term, this will reduce demand and put a downward pressure on petroleum prices.
This process will take years, allowing time for Russia to prepare for a "soft landing". But...
3. Most petro-states suffer from epic corruption. Imagine being able to open a little spigot on the petroleum pipeline, siphoning off a percentage for yourself. In effect, this is what happens in countries where petroleum is the backbone of the economy. Putin might be the wealthiest man on Earth, because of his financial connection to the gas flows through Ukraine. It is likely that in today's Russia, corruption is at an all time high: worse than under the tsars, under communism, or even the despised Yeltsin years.
It is exactly this Putin-controlled corruption that is holding Russia back from better economic development. One small example: no country or group of countries has the combination of willingness and ability to attack or invade Russia, but Putin has been making heavy expenditures on improving his military's ability to bully small neighbors. Where Russia needs that money invested, is in fundamental economic development.
So, to my headline: as Russia's economy grinds to a halt, Putin still has checks he wants to write. How is doing it? By more theft. He has appropriated billions from a national pension fund, and just stole yet another energy firm (Bashneft) after arresting its (now former) owner. Everything that is wrong with Russia's economic base -- socialism in its TRUE sense (government control of economic production), lack of protection for property, dependence on resource extraction, underinvestment in fundamentals -- is getting EVEN WORSE.