yes sure is complicated, and a mess. one article i read last night suggest with high oil prices and improving quality of living every one ignored the glaring problems under the surface. also read they need 100 bucks per barrel to balance the budget, which i don't think is gonna happen any time soon.
good to see oil and these things finally find a bottom, and hopefully reverse.
title of the article is "State Firm Bailouts Are Killing Russia’s Ruble"
Its funny you say that because the only real incentive not to default is so you can access capital markets going forward. Well since eu and u.s. are already locking them out of the capital markets why would they even bother to make good on debt owed to western banks?
yes but private debt has not caused currency collapses in the past its usually governments not being able to pay interests on the government debt, so sure i can see why the bonds of a company like vip are dropping but i fail to see what that has to do with the ruble.
I misread the early article, same point though highly unlikely they would default on government debt.
agree they have structural problems with majority of income coming from oil related stated companies, but I am not convinced oil will trade in the 50's for long. time will tell i guess, but seems to me much of the excess production cost more then 54 bucks to produce.
a Russian is asked “what is the real relationship between the pound, the ruble and the dollar? And he gets the answer: “a pound of rubles is worth a dollar.”
one Russian saved his rubles all his life but then threw himself out the window, only to discover that he still fell more slowly than the value of the ruble.
it would appear to be more then just the free market at play, and I find it a little troubling considering what goes around comes around. There appears to be zero chance of russia defaulting on state debt, so clearly some manipulation and worse behind it. Not that i am a fan of putin and to a certain extent had this not happened my shares of mbt probably would have been toast, so I am lucky in that regard.
jeez if the ruble can collapse in no time with little to no debt, what the heck does that mean for japan and euro as well as u.s. who carry debt to gdp loads of 100-200%
maybe the clueless wonder putin figured out that destroying all faith in his markets is not helping, although i highly doubt it. more likely he is under duress and forced to do things he does not like to do.
here is the text
This section requires the presid
ent to prohibit U.S. persons fr
om investing in or purchasing
significant amounts of Gazprom equity or debt
and to impose one additional sanction on
Gazprom if he determines that that the comp
any is withholding signifi
cant amounts of natural
gas from NATO member-states
or countries such as Ukraine, Moldova, or Georgia
only mention it because no one had brought it up, but the president does not have to impose them and there was a stipulation about gazprom would first have to cut supply off. so i assume part of the insane low valuation is u.s. investors fearing they would be forced to sell if sanctions are put on.
google ukraine freedom act, or some thing like that and you can read if for your self
Frankly I am so sick of the dollar bears telling me the dollar is going to zero and that cash is trash!
Not only has the dollar appreciated against other currencies also against commodities now! Looking like a good opportunity to buy cheap assets in dollars terms whether its russian equities or oil names or emerging markets.
I do not know but if i knew where to buy Russian bond I would go with the government debt instead. I suspect emerging market bond funds have them but they are probably mixed in with all the other emerging markets which i don't want
other thing talking heads on tv were saying yesterday was margin calls and forced liquidation. not orderly selling thats for sure.