[Politics] Russia invades Ukraine (24/02/2022)

[peterward]

Would you lend money to Russia? I wouldn't. Well, all right. Would Russia's 'friends' then? North Korea? Iran? China?
No? So Russia can now only raise cash from inside Russia.

TLDR - no credit rating + low income + high interest rates + off-book loans + no foreign bank will lend Russia money = an impending debt crisis.

The presentation skills could be better, but he makes some good points.

I agree with all your points above, and without being an economist and knowing what Russian central Bank or Putin will do exactly, I wonder what will happen when/if Putin tries to lean on the Oligarchs to bail him out?

He has on numerous occasions asked them to pay for things like Crimea bridge, or facets of World Cup 2018, from a position of strength and they, wanting to keep onside and their wealth, have always conformed, but now as you cite, the whole picture is different, they've most likely already taken a huge haircut on their wealth and if Putin cant fund the everyday or his war and leans into them to do so, will they still conform to bail him out at their personal expense or will they finally try to somehow pull the trigger on Putin?

There's no real loyalty to Putin imho, just the mechanisms of a system that allowed them to be super rich, and preserving their wealth will be much higher priority than preserving Putin.

They wont be prepared to go down with the ship and you'd expect a desperate Putin will go to them for financial help if needed.

Will they choose the poor house to back a sinking ship, or chance of a Balcony fall to go against Putin?

 

[aftershavedave]

I agree with all your points above, and without being an economist and knowing what Russian central Bank or Putin will do exactly, I wonder what will happen when/if Putin tries to lean on the Oligarchs to bail him out?

He has on numerous occasions asked them to pay for things like Crimea bridge, or facets of World Cup 2018, from a position of strength and they, wanting to keep onside and their wealth, have always conformed, but now as you cite, the whole picture is different, they've most likely already taken a huge haircut on their wealth and if Putin cant fund the everyday or his war and leans into them to do so, will they still conform to bail him out at their personal expense or will they finally try to somehow pull the trigger on Putin?

There's no real loyalty to Putin imho, just the mechanisms of a system that allowed them to be super rich, and preserving their wealth will be much higher priority than preserving Putin.

They wont be prepared to go down with the ship and you'd expect a desperate Putin will go to them for financial help if needed.

Will they choose the poor house to back a sinking ship, or chance of a Balcony fall to go against Putin?

Good post. Who knows? In the short-term I guess that they'll protect whatever Ruble denominated assets they have, and there has been strong Ruble purchases today, either because 115 was an overreaction, or "interested" parties have been buying to avoid a stronger run on the currency. The media has been very quiet on this, which is strange

 

[essbee1]

Good post. Who knows? In the short-term I guess that they'll protect whatever Ruble denominated assets they have, and there has been strong Ruble purchases today, either because 115 was an overreaction, or "interested" parties have been buying to avoid a stronger run on the currency. The media has been very quiet on this, which is strange

Indeed. Why aren't the BBC running the demise of the ruble? They do allow BBC web access in Russia don't they? It could be the
trigger to help pukin on his way out a 4th floor window.

 

[Eric the meek]

Good post. Who knows? In the short-term I guess that they'll protect whatever Ruble denominated assets they have, and there has been strong Ruble purchases today, either because 115 was an overreaction, or "interested" parties have been buying to avoid a stronger run on the currency. The media has been very quiet on this, which is strange

What this thread needs is an economist. We had one briefly the other week, but he slipped over the side to go and watch the test match in NZ.

This wouldn't have happened in Russia. He'd have been chained to his desk, fed endless borscht and blinis, and his family held hostage at gunpoint.

 

[aftershavedave]

What this thread needs is an economist. We had one briefly the other week, but he slipped over the side to go and watch the test match in NZ.

This wouldn't have happened in Russia. He'd have been chained to his desk, fed endless borscht and blinis, and his family held hostage at gunpoint.

I am going for interested parties propping up the shitshow btw, I wouldn't be surprised at the buyers being sovereign funds friendly to Russia unless corporates are taking realised profits just to start again. The trajectory is one way though if they can't or won't protect their interests. The big players are big-corp banks, they know where this is heading: 120 by early next week