Question about the origin of a specific E.J. quote

[icm63]

Re: Question about the origin of a specific E.J. quote

If the actual unemployment rate falls below "natural unemployment rate" and inflation rises to
the future inflation expectations level then the Fed will start to raise rates.

If the FED increases rates 0.25%, what if!

The FED has to pay the Treasury 0.25% more on its $4.8 trillion of debt, which about $120 Bn increase in interest payments.

Then the FED/TREASURY will have to PRINT to pay that bill....

Yeah that will work...

..BOOM!

[jk]

Re: Question about the origin of a specific E.J. quote

Russia corp debt servicing without central banks help could force asset (Russia oil company’s offshore holdings?) liquidation.

http://blogs.wsj.com/moneybeat/2014/...d-as-it-seems/

this is the west's mirroring of the forced sale of western oil interests on sakhalin and other similarly enforced sale of energy interests within russia. the boundary gets ever more clearly drawn.

[EJ]

Re: Question about the origin of a specific E.J. quote

this is the west's mirroring of the forced sale of western oil interests on sakhalin and other similarly enforced sale of energy interests within russia. the boundary gets ever more clearly drawn.

What if the goal isn't punish Putin for his policies in Syria and Ukraine but to get him deposed by completely wrecking the Russian economy?

A risky gambit to be sure, but it worked once before.

[Woodsman]

Re: Question about the origin of a specific E.J. quote

What if the goal isn't punish Putin for his policies in Syria and Ukraine but to get him deposed by completely wrecking the Russian economy?

Then I'd say it hasn't worked (yet), if there's any truth to this piece in The Atlantic:

Putin's Popularity Is Much Stronger Than the Ruble

Evan amid an economic crisis, the Russian leader managed to secure his fifteenth straight "Man of the Year" title.
ADAM CHANDLERDEC 16 2014, 3:11 PM ET



There's an old Russian proverb that goes, "The economy is a good servant, but a bad master." Apparently, the saying doesn't apply to Vladimir Putin. The Russian ruble is currently in the midst of an historic landslide; Russia's central bank jacked interest rates up nearly seven points on Tuesday to counter the currency's two-day, 20-percent fall. And yet today also brought news that the Russian president had emerged from a public-opinion poll as the country's "Man of the Year"—for the fifteenth straight year.

The Kremlin-touted survey—conducted by the Russian polling group Public Opinion Foundation on December 7 among 1,500 respondents across 43 Russian regions—found that 68 percent of Russians placed Putin in first place on a list of national politicians and public figures who deserved the title "man of the year," Russia's Interfax news agency reported. In 2013, only 32 percent of Russians gave him the nod.

By that (admittedly dubious) measure, Putin's popularity has doubled in the months since he annexed Crimea and backed pro-Russian militias in eastern Ukraine (Putin's approval rating hit a peak in August and still remains high). During the same period, the Russian economy has gone from being a relatively good servant to a pretty cruel master. International sanctions levied in response to the Ukraine crisis have stung Russia and the price of oil has dropped, dealing another blow to the oil-exporting country.

http://www.theatlantic.com/internati...-ruble/383809/

Pretty cool how we screw with the whole world to soothe our geopolitical jones. No worries about the big brains at State and the three letter agencies miscalculating and taking down the world economy, LTCM style. These magicians never make a mistake.

[EJ]

Re: Question about the origin of a specific E.J. quote

Larry Summers ran the campaign to divide the spoils after the collapse of the Soviet empire.

Who's in charge this time?

[icm63]

Re: Question about the origin of a specific E.J. quote

With China signing lot of deals with Russia...

I wonder if they support the demise of the Putin leadership... after all better the devil you know!

China could play there cards, supporting Russia...

[EJ]

Re: Question about the origin of a specific E.J. quote

With China signing lot of deals with Russia...

I wonder if they support the demise of the Putin leadership... after all better the devil you know!

China could play there cards, supporting Russia...

Not a fan of Putin but respect where it is due. It takes guts and brains to outlast the will of the U.S. this long.

This may sound a bit gold buggy but I can't help but wonder if the very public purchases of gold by Russia and its remaining satellites over the past five years is part of this game.

[icm63]

Re: Question about the origin of a specific E.J. quote

Putin would be plain stupid to act alone to rattle the $USD system.

Surely, he is acting as the PUBLIC 'sharp end of the sword' for the BRICS nation view of the world.

So I guess we shall see if Brazil, India, China, South Africa stand side by side with Russia in this fight!

Or will it be divided we shall fall.

[bill]

Re: Question about the origin of a specific E.J. quote

Larry Summers ran the campaign to divide the spoils after the collapse of the Soviet empire.

Who's in charge this time?

From whom did Larry Summers get his plan of action?
Stanley Fischer


http://www.cfr.org/financial-regulat...ability/p33857

[astonas]

Re: Question about the origin of a specific E.J. quote

What if the goal isn't punish Putin for his policies in Syria and Ukraine but to get him deposed by completely wrecking the Russian economy?

A risky gambit to be sure, but it worked once before.

Might this be wishful thinking?

The main concern I'd have regarding this hypothesis is that Putin hasn't really been relying very heavily on an economic message to cement his political strength. He has learned that the trick is to play identity politics, including very heavy plays on both nationalism and religious furor.

As long as he can credibly point to an external force as the bad guy for the economic distress -- something that he is already doing with vigor -- a declining economy will strengthen, not weaken, him politically. His control over the media is certainly complete enough to make this fly.

To be sure, this is all only valid up to a point. But I wouldn't characterize the Russian people as having a particularly delicate constitution when it comes to suffering. That point is still very far away.

The only way I could see him being deposed is if an oligarch were hatching a particularly brilliant plot against him. But Putin has for some time been quite efficient at purging anyone with a chance to do so. When it comes to controlling the twin spigots of power, pride and fear, Putin has established himself to be a master.

It is always possible that you are seeing something that I am missing. If so, I'd like to learn more.

[ProdigyofZen]

Re: Question about the origin of a specific E.J. quote

When capital markets don't cooperate just change the rules. Russia virtually suspends all mark to market and any bank/trading losses until "who knows when."

The Central Bank of the Russian Federation (Bank of Russia)
On measures of the Bank of Russia to maintain the stability of the Russian financial sector
1. The Bank of Russia will introduce a temporary moratorium on the recognition of the negative revaluation of securities portfolios of credit institutions and non-credit financial institutions, which will reduce the sensitivity of market participants to market risk.
2. To limit the impact of the revaluation of foreign currency denominated assets and liabilities on prudential requirements of credit institutions, the Bank of Russia plans to provide credit institutions temporary right to use in the calculation of prudential requirements on transactions in foreign currency rate calculated in the previous quarter.
3. The Bank of Russia will improve the mechanism of credit institutions in foreign currency. Within the framework of a currency Repo planned additional auctions for various periods of time if necessary. As part of the mechanism for providing loans to credit institutions secured by non-marketable assets (according to the Regulation number 312-P), is scheduled to begin providing loans to banks in foreign currency, secured credit claims in foreign currency to non-financial organizations.
4. The Bank of Russia considers the central counterparty on the Moscow Stock Exchange as an important institution for centralized distribution of liquidity among all financial market participants - both credit and non-credit financial institutions. To ensure the sustainability of the stock market for the Bank of Russia, if necessary, will provide support to the central counterparty on the Moscow Stock Exchange, market participants have confidence in the reliability of centralized clearing and continuity of its functions.
5. To empower Interest Rate Risk Management The Bank of Russia plans to:

- Temporary (up to 07.01.2015) not to apply the restriction values of the total cost of consumer credit (loan) at the conclusion of credit and microfinance institutions in consumer contracts (loan);

- Increase the range of the standard deviation of market interest rates on deposits in banks from the estimated average market interest rate to a maximum of 3.5 percentage points (instead of 2 percentage points at the moment).

6. To enhance the management of credit risks, the Bank of Russia intends to:

- To give credit institutions an opportunity not to impair the quality assessment of debt service, regardless of the assessment of the financial position of the borrower on loans restructured, for example, in the case of changes in the currency in which the loan is denominated, regardless of changes in the maturity of the loan (principal and (or) percent ), the interest rate;

- To give credit institutions an opportunity to make a decision on non-worsening assessment of the financial position of the borrower for the purpose of provision for losses if the changes in financial position due to the action imposed by individual foreign countries restrictive economic and (or) policy measures (Annex to the letter of the Bank of Russia from 21.10.2014 ? 184 -T);

- To increase the period during which the credit institution has the right not to increase the size Actual provision of loans to borrowers, financial position, and (or) quality of debt service, and (or) as collateral for loans has deteriorated as a result of an emergency, from 1 year to 2 years.

- To increase the period during which a credit institution can not form a provision for possible losses on loans for investment projects, while maintaining other existing minimum reserve requirements set depending on the number of years, the lack of payments on investment loans or entering the minor size;

- To cancel the increased rate risk with respect to loans to leasing and factoring companies - participants of the banking group, which includes the lending bank;

- Introduce a reduced weighting factor of risk for the ruble-denominated loans to Russian exporters under an insurance contract EXIAR (Export Insurance Agency of Russia).

7. In order to maintain the stability of the banking sector in the face of increased interest rate and credit risks of a slowdown of the Russian economy the Bank of Russia and the Government of the Russian Federation prepare measures to recapitalize credit institutions in 2015.

[EJ]

Re: Question about the origin of a specific E.J. quote

Might this be wishful thinking?

The main concern I'd have regarding this hypothesis is that Putin hasn't really been relying very heavily on an economic message to cement his political strength. He has learned that the trick is to play identity politics, including very heavy plays on both nationalism and religious furor.

As long as he can credibly point to an external force as the bad guy for the economic distress -- something that he is already doing with vigor -- a declining economy will strengthen, not weaken, him politically. His control over the media is certainly complete enough to make this fly.

To be sure, this is all only valid up to a point. But I wouldn't characterize the Russian people as having a particularly delicate constitution when it comes to suffering. That point is still very far away.

The only way I could see him being deposed is if an oligarch were hatching a particularly brilliant plot against him. But Putin has for some time been quite efficient at purging anyone with a chance to do so. When it comes to controlling the twin spigots of power, pride and fear, Putin has established himself to be a master.

It is always possible that you are seeing something that I am missing. If so, I'd like to learn more.

Like everyone else I'm trying to logic-out recent events and square the data with the information I am getting from various personal connections.

For now the latest measures by the Bank of Russia appear to be working to halt the ruble collapse.

While western news coverage of Russia is of crisis and calamity, the data appear to show the central bank managing events effectively, considering the effect of low oil prices on the nation's trade balance, fiscal position, and fx position. On the latter, FX reserves have declined 19% over the past year. That's a lot but not catastrophic.

Gold has increased from 8% to 11% of FX reserves in 2014.

Three relevant stats:

$42,009,600,000 Gold FX @ $1200
$678,000,000,000 External Debt
-19,462,000,000 Cap Flows (annualized Q3 2014)

Source: tradingeconomics.com

If Russia can engineer a $2000 gold price then it's $418.8B in FX reserves will jump to $436.5 even if the current rate of outflows continues.

[thriftyandboringinohio]

Re: Question about the origin of a specific E.J. quote

...If Russia can engineer a $2000 gold price then it's $418.8B in FX reserves will jump to $436.5 even if the current rate of outflows continues.

Now that is an interesting sentence.

[vinoveri]

Re: Question about the origin of a specific E.J. quote

When capital markets don't cooperate just change the rules. Russia virtually suspends all mark to market and any bank/trading losses until "who knows when."
.

Bingo. Winner Winner Chicken Dinner.

Coming to your own country .... whenever needed.

[astonas]

Re: Question about the origin of a specific E.J. quote

Like everyone else I'm trying to logic-out recent events and square the data with the information I am getting from various personal connections.

Thank you for sharing your thought process with us! The information you've provided suggests that while Russia isn't an economic giant, it also won't easily be compelled to roll over under an economic attack.

If Russia can engineer a $2000 gold price then it's $418.8B in FX reserves will jump to $436.5 even if the current rate of outflows continues.

Wouldn't it be vastly easier for the US and Europe to engineer the gold price than for Russia to have a significant influence on it? I've been assuming that the west's control over gold is considerably greater than its influence over oil, when it comes to acting as a cartel. Am I mistaken in this?