# What's going on in Russia?



## kid hustlr (17 December 2014)

Can one of you guru's explain this to me?

Sounds like it's spiraling out of control?

Currency crash + reliance on oil, huge interest rate increase yesterday

what's the cause and effect of all of this - I'm just not as close to this type of action as I once was.


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## sydboy007 (17 December 2014)

*Re: what's going in in russia?*

some interesting articles on this

Basically the argument is that the Saudis are doing their best to kill off shale oil in the USA, while also giving the bird to Russia and Iran.  They have $750B in FOREX reserves so can afford a few lean years.

Will be very interesting to see hwo this pans out.  The bonds for a lot of the smaller energy players in the US have tanked as badly as Russian bonds.  Lets hope this doesn't set off another round of global contagion.

http://blogs.reuters.com/great-debate/2014/12/15/saudi-arabia-is-playing-chicken-with-its-oil/

http://www.bloomberg.com/news/2014-...le-memories-of-1998-emerging-market-rout.html


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## darkhorse70 (17 December 2014)

Saudi Arabia sickens me.


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## skc (17 December 2014)

kid hustlr said:


> Can one of you guru's explain this to me?
> 
> Sounds like it's spiraling out of control?
> 
> ...




Not fully across it myself but it's happened before (and gets A LOT crazier) 

http://en.wikipedia.org/wiki/1998_Russian_financial_crisis



> In an effort to prop up the currency and stem the flight of capital, in June 1998 Kiriyenko hiked GKO interest rates to 150%.






darkhorse70 said:


> Saudi Arabia sickens me.




Why?


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## Smurf1976 (17 December 2014)

It's a bit rough to blame the Saudi's for a crash in the oil price when other countries, including Australia, are doing the same or worse with other resources.

Australia has a major position in the export of various minerals, notably iron ore and coal, and yet we've never even tried to form a cartel to control prices globally. In contrast, this is the fist time in decades that the Saudi's have failed to hold prices high, although they're still "high" by historical standards.


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## darkhorse70 (17 December 2014)

Skc just because they act so democratic or try to portray that image but they have so much blood on their hands. Try to destablize other countries for money yet they are filthy rich. Less so woth russia and more so by destroying middle eastern countries to interupt oil supply etc. My opinion could be dead wrong. My dads opinions have rubbed off on me haha.


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## McLovin (17 December 2014)

darkhorse70 said:


> Skc just because they act so democratic or try to portray that image but they have so much blood on their hands. Try to destablize other countries for money yet they are filthy rich. Less so woth russia and more so by destroying middle eastern countries to interupt oil supply etc. My opinion could be dead wrong. My dads opinions have rubbed off on me haha.




Saudi Arabia is an absolute monarchy. They neither claim to be nor act as a democracy.


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## darkhorse70 (17 December 2014)

I mean act as they are fair and just. Haha. Atleast I learnt something new.


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## DeepState (17 December 2014)




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## McLovin (17 December 2014)

darkhorse70 said:


> I mean act as they are fair and just. Haha. Atleast I learnt something new.




And I'm saying they don't do that. KSA has oil, if it didn't the West would view it the same way it views Afghanistan.



> Saudi Arabia is one of approximately thirty countries in the world with judicial corporal punishment. *In Saudi Arabia's case this includes amputations of hands and feet for robbery, and flogging for lesser crimes such as "sexual deviance" and drunkenness. In the 2000s, it was reported that women were sentenced to lashes for adultery; the women were actually victims of rape, but because they could not prove who the perpetrators were, they were deemed guilty of committing adultery.*[12] The number of lashes is not clearly prescribed by law and is varied according to the discretion of judges, and ranges from dozens of lashes to several hundreds, usually applied over a period of weeks or months. In 2004, the United Nations Committee Against Torture criticized Saudi Arabia over the amputations and floggings it carries out under Sharia. The Saudi delegation responded defending "legal traditions" held since the inception of Islam 1,400 years ago and rejected interference in its legal system.
> 
> Saudi Arabia also engages in capital punishment, including public executions by beheading.[13] The death penalty can be imposed for a wide range of offences[14] including murder, rape, armed robbery, repeated drug use, apostasy,[15] adultery,[16] witchcraft and sorcery[17] and *can be carried out by beheading with a sword,[15] stoning or firing squad,[16] followed by crucifixion*.[17] In 2005 there were 191 executions, in 2006 there were 38, in 2007 there were 153, and in 2008 there were 102.[18]


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## McLovin (17 December 2014)

Back on Russia, it's really a one trick pony. Without oil and gas there isn't much left in Russia. Who would go and put money into Russia, they've shown pretty clearly over the years that they're quite happy to seize assets when they feel like it. 

When you do **** like this, should you really be that surprised at capital flight?

http://www.theguardian.com/world/2006/dec/12/business.oil


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## darkhorse70 (17 December 2014)

Ok well I just spoke to my dad. He said that yes america has critized their system etc. My point was on a global scale even though we dont accept their form of systen as being fair, these suadis try to portray that their system is fair and just. No country or government would claim their laws were unjust.

I just meant the fact that they try to act like theyre a part of a civalized global society while they are cuasing blood baths is disgusting.


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## banco (17 December 2014)

Russia's destiny is to be the white trash of Eurasia.


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## rimtas (17 December 2014)

I've lived in a country that has borders with Russia and I am familiar with their mentality.  Most of Russians are poor, very poor, and they love drinking vodka.  For breakfast, lunch and super. During weddings, birthdays, weekends and afternoons, after work (and many during work  hours).  
They say " we are poor, but our country is big and great" . And after they drink up 0.25l of vodka in one go, followed by a marinated cucumber and black bread.  They are extremely proud of themselves, but poor.  Vodka is the key for life in Russia. You go somewhere-bring a bottle with you.

Most of Russians don't feel that economy is in bad shape, because for most of them life was always bad and they don't care or even notice that a crash is in progress.


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## skc (17 December 2014)

Bloomberg reported that a few FX house have stopped Rouble trades... This came from a local CFD provider today.



> Due to the political and economic uncertainties regarding Russia, underlying market conditions are such that AxiTrader has made the decision to suspend trading in the Russian Rouble until further notice.
> 
> The Effective Date for ceasing to offer the USD/RUB & EUR/RUB will be Close of Business 5:00 PM MSK (Moscow time) December 23, 2014 (3:00 PM platform time [GMT+2]).






darkhorse70 said:


> I just meant the fact that they try to act like theyre a part of a civalized global society while they are cuasing blood baths is disgusting.




You should really verify your view with some facts. Be critical to other's off-the-cuff opinions.


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## Atari rose (18 December 2014)

President Obama is expected to sign legislation by the end of the week implementing new sanctions on Russia over the Ukraine crisis. The additional sanctions will hit the Russian weapons and energy sector, hammering an economy that is already being battered by a fall in oil prices and a plunging currency. The ruble dropped to record lows yesterday, falling as much as 20% against the dollar despite the Russian central bank’s move to raise interest rates to 17%


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## darkhorse70 (18 December 2014)

SKC, ok next time.


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## KnowThePast (19 December 2014)

rimtas said:


> I've lived in a country that has borders with Russia and I am familiar with their mentality.  Most of Russians are poor, very poor, and they love drinking vodka.  For breakfast, lunch and super. During weddings, birthdays, weekends and afternoons, after work (and many during work  hours).
> They say " we are poor, but our country is big and great" . And after they drink up 0.25l of vodka in one go, followed by a marinated cucumber and black bread.  They are extremely proud of themselves, but poor.  Vodka is the key for life in Russia. You go somewhere-bring a bottle with you.
> 
> Most of Russians don't feel that economy is in bad shape, because for most of them life was always bad and they don't care or even notice that a crash is in progress.




That can't be right, I haven't had any vodka since breakfast and it's now almost dinner.

Seriously though, where did you come up with this rubbish? I can assure you that it is wrong.


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## sydboy007 (19 December 2014)

McLovin said:


> Back on Russia, it's really a one trick pony. Without oil and gas there isn't much left in Russia. Who would go and put money into Russia, they've shown pretty clearly over the years that they're quite happy to seize assets when they feel like it.
> 
> When you do **** like this, should you really be that surprised at capital flight?
> 
> http://www.theguardian.com/world/2006/dec/12/business.oil




an issue Venezuela is facing as well.  You can afford to act like the rest of the world doesn't matter when the times are good, but when things turn economically ugly they're left with little support.

It's hard to fathom what a 50% reduction in purchasing power for imports must be like when it occurs so quickly.


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## qldfrog (19 December 2014)

I would not dismiss russia so quickly:
without the russian gas, europe stops and cheap or expensive it is needed,
 and the alternative is coming from the newly democratic northern africa/middle east...
good luck with trying to do long term economic plan with fanatics who only wish your death ideally sucking your wealth in the process...
oops are we talking Saudi Arabia (and cie) again???


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## The Falcon (19 December 2014)

^ above is true until US East coast export LNG terminals come on line in next few years..4 have now been approved and 10 more awaiting approval. Massive game changer, the petrol station masquerading as a country is in trouble long term.


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## qldfrog (19 December 2014)

The Falcon said:


> ^ above is true until US East coast export LNG terminals come on line in next few years..4 have now been approved and 10 more awaiting approval. Massive game changer, the petrol station masquerading as a country is in trouble long term.




agree as long as we believe US gas production will still be high in 3 years;
would not bet my money on it
actually betting the other way by buying local Santos/WPL for a 3y long term view
time will tell


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## The Falcon (19 December 2014)

Doesn't have to be mutually exclusive  Picked up STO and WPL last week, no other Oz Energy stocks though


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## luutzu (19 December 2014)

qldfrog said:


> I would not dismiss russia so quickly:
> without the russian gas, europe stops and cheap or expensive it is needed,
> and the alternative is coming from the newly democratic northern africa/middle east...
> good luck with trying to do long term economic plan with fanatics who only wish your death ideally sucking your wealth in the process...
> oops are we talking Saudi Arabia (and cie) again???




Heard that Obama is not going to add more sanctions and France is negotiating.

I think NATO (and Australia, haha) might leave the sanctions as is and might ease off a little. We might learn from last time that it might not end well to bankrupt a former industrial power as we did at Versailles. 

The rational thing to do is probably to only weaken, not wreck, a nuclear power, and one time Evil Empire, like Russia.


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