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Started By
Message
re: Update pg 23: Russia,IMO, will default on its sovereign debt within six months
Posted on 12/16/14 at 11:16 am to LSURussian
Posted on 12/16/14 at 11:16 am to LSURussian
quote:
What schism? The CBR's Governor, akin to our Fed Chairman, was appointed by Putin.
Just because someone is appointed doesn't guard them from the inevitable criticism that comes when crisis happens.
I use the term "Putin" broadly to include his party members. There have been grumblings about this for a little bit but the only new story I've ever found about it is here, albeit not a great source. No, Fyodorov =/= Putin but Russia is one of the few countries where you can feel comfortable that party member's statements will generally not be against the party leader. Or that will be one of the last time you see that party member have a public statement for a while.
1
Posted on 12/16/14 at 11:18 am to LSURussian
quote:It's happened before when they defaulted.
What makes you assume they would not be paid?
quote:No. they aren't the isolated collective they once were.
I don't think the Russian military would consider not fighting to "defend Mother Russia."
They have access to outside information.
Would they defend the motherland? Sure. But they know what "defend" means these days.
Posted on 12/16/14 at 11:21 am to Roaad
quote:This is the kind of information I'm looking for. Which leads to this...
It's happened before when they defaulted.
quote:How would a default be different today compared to then?
No. they aren't the isolated collective they once were.
They have access to outside information.
Posted on 12/16/14 at 11:23 am to LSURussian
quote:
That's a good link. Thanks. Notice the downward trend in their treasury holdings.
Well, since they started selling their Treasury holdings months ago interest rates in the U.S. have gone down and the dollar has strengthened...
There's no telling. I noticed the downward trend as well and thought it was interesting. The whole global system is so convoluted now, especially with government-owned debt being on the Fed's books, there's no telling what would actually cause what anymore until it actually happens. The Fed may have purchased the debt themselves to prevent any disruption in rates, but I'm not digging through their books to try to find it.
Posted on 12/16/14 at 11:24 am to ell_13
quote:the average Russian would now about it.
How would a default be different today compared to then?
And we would probably bail them out
Posted on 12/16/14 at 11:25 am to Roaad
quote:No way this happens.
And we would probably bail them out
Posted on 12/16/14 at 11:32 am to BennyAndTheInkJets
quote:I not saying Elvira won't be criticized. In fact, she's probably packing up her desk right now.
Just because someone is appointed doesn't guard them from the inevitable criticism that comes when crisis happens.
She will be the scapegoat Putin needs to continue to appear presidential when he fires her. Your link just confirms that.
(Although Elvira may try to avoid the axe by firing one or more of her First Deputies first and claiming they gave her bad advice.)
But no matter, the beginning of the end for her is in progress.
Posted on 12/16/14 at 11:35 am to ell_13
quote:
And we would probably bail them out.....
No way this happens.
perhaps with concessions.....
ETA: Excellent thread Russian. Thanks for posting.
This post was edited on 12/16/14 at 11:36 am
Posted on 12/16/14 at 11:38 am to Roaad
quote:The Russian military was non-existent in 1998 under Yeltsin. Putin has changed that.
What makes you assume they would not be paid?
It's happened before when they defaulted.
They get first dibs at the government trough now right after the oligarchs.
quote:Not like you think they do. Many websites are blocked in Russia. And all of the media is government controlled again.
They have access to outside information.
It's how Putin keeps the internal opposition suppressed.
quote:The same as it meant when they invaded Crimea and eastern Ukraine. The troops and tanks were sent in to defend ethnic Russians in those areas.
But they know what "defend" means these days.
Posted on 12/16/14 at 11:59 am to LSURussian
What's the new development that bumped this thread? Cliffs or page number to start reading update? Haven't been on for a while. 
Posted on 12/16/14 at 12:15 pm to Roaad
quote:""Know" about it? You don't think the "average Russian" knew about the 1998 default when 100% of the Russian banks refused to open their doors the day after the default was announced?
How would a default be different today compared to then?
the average Russian would now about it.
When some of the banks (many Russian banks never re-opened) started reopening, they all put strict limits on the amount of withdrawals they would allow with most of the limits equaling approximately $25/day even if the depositor/customer had thousands of dollars on deposit.
Here are some photos taken outside Moscow banks the Monday morning after the Minister of Finance announced the default that previous night:
You're way off base in your historical knowledge of the 1998 Russian default. I lived it. I was working in Moscow when it happened.
Posted on 12/16/14 at 12:21 pm to LSURussian
Interesting stuff. Would that happen again?
Posted on 12/16/14 at 12:25 pm to LSUGrrrl
quote:
What's the new development that bumped this thread? Cliffs or page number to start reading update? Haven't been on for a while.
My post that bumped this thread...
I provided a link to the Central Bank of Russia's (CBR) drastic interest rate increase on Monday night, Moscow time. The rate hike was a whopping 650 basis points (6.5%) from 10.5% to 17% for overnight loans banks borrow from the CBR.
The rate increase was intended to support the value of the ruble but so far it hasn't worked. the ruble fell almost 20% Tuesday morning to about 80 RUR/USD from about 66 RUR/USD on Monday. The ruble has strengthened a little since this morning to around 71-72 RUR/USD.
Posted on 12/16/14 at 12:36 pm to LSURussian
quote:
This tells me all I need to know about your posts regarding Russia. Thanks.
Stop being silly. I have at no point acted as if I somehow had information on Russia that was superior to yours. I've merely pointed out that your strident view is out of all phase with global trading markets; and, further, I thought it was odd that you wouldn't seek to profit on such an enormous disparity in perspective.
Posted on 12/16/14 at 12:46 pm to Big Scrub TX
quote:I never said you claimed that.
I have at no point acted as if I somehow had information on Russia that was superior to yours.
All I said was your comment, "My understanding of Russia is irrelevant" told me all I need to know about your posts regarding Russia.
Res ipsa loquitur....
This post was edited on 12/16/14 at 12:48 pm
Posted on 12/16/14 at 12:49 pm to LSURussian
quote:
All I said was your comment, "My understanding of Russia is irrelevant" told me all I need to know about your posts regarding Russia.
In other words, the height of silliness.
Posted on 12/16/14 at 12:55 pm to LSURussian
quote:
1998 Russian default
Damn, I didn't even think about Long Term Capital Management. I wonder what the global exposure is today for hedge funds and institutional investors. You'd like to think they learned their lesson, but...
Posted on 12/16/14 at 12:56 pm to LSURussian
quote:
Please provide a link to where someone was mentioning the possibility of a Russian sovereign default before I started this thread on 9/29. I just Googled and I couldn't find one. Thanks.
quote:
As Argentina hurdles toward its third default in less than as many decades, it is also worth acknowledging the much more significant global risk of a Russian default. The FT reported on Friday that Russian banks and companies have $161 bln in foreign debt coming due in the next 12-months.
Russian Default Risk rises - July 29th, 2014
quote:
In response to the recent tensions and the threat of sanctions from the West, Russia’s stock market tumbled as much as 13% on Monday, wiping out nearly $60 billion in market cap before mounting a rebound on Tuesday. Russia’s currency also tumbled to record lows, prompting the country’s central bank to sharply hike interest rates.
quote:
KBW said that while a Russian default like in 1998 is not likely, such an event would cause “material” potential losses for Citi. Economic sanctions could also cause elevated credit losses, lower revenue or even a loss of Citi’s banking license, the firm said.
March 4th, 2014
You think you're the lone soul in the world that looked askance at Russia's credit risk prior to 3 months ago? What kind of a narcissist are you? You want some pat on the back because you made an anonymous post on the topic on an LSU message board - i.e. no skin in the game or career risk to making such a reckless call (which you were forced to double the timeline on when I started asking you real questions about it?)
Get over yourself.
Posted on 12/16/14 at 12:56 pm to Big Scrub TX
quote:I agree your comment is silly.
In other words, the height of silliness.
But I didn't want to be that harsh.
Posted on 12/16/14 at 12:58 pm to LSURussian
quote:
I agree your comment is silly. But I didn't want to be that harsh.
You're a ridiculous arse. You make a prediction and then start patting yourself on the back for it before it has even come to pass, while simultaneously calling me silly for asking you why your opinion is so out of phase with the specific global markets which track exactly these sorts of events.
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