Russia's imploding.

[Creed of Heresy]

http://www.washingtonpost.com/blogs/wonk...ol_strip_2

President Obama might have a future as a credit rating analyst. During his State of the Union, you might remember, he took a victory lap of sorts when he declared that, as the price of its aggression, Russia's economy was "in tatters." Well, S&P agrees: the rating agency just downgraded Russia to junk.

Now, normally I wouldn't pay any attention to what a credit rating agency says about a government. That's just, like, their opinion, man, and often a poor one at that. But this time is, well, different, because if Russia is rated junk, then its companies will be too—which will increase the borrowing costs on their existing debt. It could also trigger earlier bond repayments, which, together with the higher interest rates, could, according to one official, cost them as much as $20 to $30 billion.

And that's $20 to $30 billion it really can't afford. Russia, as I've said before, doesn't have an economy so much as an oil-exporting business that subsidizes everything else. But it can't subsidize much when prices are only $50-a-barrel. That leaves Russia in a world of bad, worse, and Dostoevskian choices. Cheaper oil, you see, means that Russian companies have fewer dollars to turn into rubles, which is just another way of saying that there's less demand for rubles—so its price is falling. But it can't fall too much or Russian companies, who have a lot of dollar debts they can't roll over due to Western sanctions, won't be able to pay back what they owe. Even worse, Russia banks could face a run on their foreign currency holdings, as people try to turn rubles they think will lose value into dollars that won't.

Russia can't wake up from this economic nightmare, though, because they're not asleep. This is their reality. After falling in almost perfect tandem with oil for most of the year, the ruble started free falling in December. In under a week, it went from 55 to 75 rubles per dollar—a 36 percent decline—and the panic got so bad that the bank run turned into an Apple and Ikea run. People decided that if they couldn't ditch their rubles for dollars, then they'd settle for the latest smartphones and assemble-it-yourself furniture instead.

See, Putin...you were in the KGB. So I understand that the Russia you worked for was the Soviet Union-era Russia. But let me, a humble US citizen, let you in on a little secret...

Russia is not the Soviet Union anymore.

It is not a superpower.

It's barely a global power.

You do not have the production or financial capabilities to continue trying to cling to your former territories that want nothing to do with you any longer.

Your less-than-subtle attempts to try to force annexation from nations you no longer have any influence over otherwise? Did you seriously believe you would not face international sanctions? You were a former spymaster of the KGB. Was the KGB really so inept that it had people like you running its intelligence operations?? People who have this utter lack of foresight and understanding of international affairs?? No wonder the Soviet Union fell apart...

But anyway, Putin. You're not the US. You can't get away with interfering in politics outside of your own country by force anymore. You're a shadow, a husk of your former glory. Get over it.

Or, you should have gotten over it. Now, you're fucked.



Russia is screwed. Their economy is going to fall the fuck apart all over again. Was Ukraine REALLY worth this risk?? What, exactly, did Putin think he stood to gain that made this risk worth it? Was he so swole over his victory over that tiny little country called Georgia that he thought he could pull a puppet-war against the Ukrainians, who absolutely hate Russia these days??

I'm sad for the Russian people, though. They will be the ones to suffer the most, and let's face it, we all know they didn't elect this shithead. Putin's so corrupt that he basically rigged the elections. He's just a thug. And now they all have to pay for it. Again. As usual.

I feel bad for the Russian people. They deserve much better. Instead, they get this. :/

[Tonus]

But anyway, Putin. You're not the US. You can't get away with interfering in politics outside of your own country by force anymore.

I think that even the US (aside from the far-right) is realizing that it cannot do that anymore either. It costs too much, even for a nation that still has a lot of wealth to buffer bad decisions. That does not seem to be the case with Russia, though I am admittedly ignorant of much of their recent goings-on. If they're really that dependent on oil to keep their economy from collapsing, then they might be the real target of OPEC's decision to keep up supply at the expense of cost-per-barrel.

Doesn't Russia supply a pretty large amount of the natural gas used by Europe? How might Russia's economic problems affect the price and delivery of energy to Europe? And does Putin see it as a way to keep his country from going over the cliff-- basically ransoming energy to his neighbors in a last-ditch effort to keep enough money flowing and the ruble from becoming toilet paper?

[Fidel_Castronaut]

Thing is about Putin, and his oligarch friends, is that they're so rich a massive downturn in Russia's economy won't affect them at all.

Most of them non-dom to London anyway. The entire Russian economy can go to shit and Putin's grip around the population means many of them will still love him and praise him for 'standing up to the western bullies'.

I dread to think what the rich/poor divide is like in Russia having not studied it, but I would it's massive. Wealth concentration there is centered almost entirely around the Kremlin. Even if you're an oligarch, if you fall out of favor, better watch your back.

If people wanted a perfect example of a cult of personality, I think Putin would be it.

[Creed of Heresy]

Well, actually, I think the reason for OPEC's upkeep of supply despite price might be in reaction to this in particular. I don't know much about the oil economy, as I find far more interest in the ideas of solar-panel roads and thorium reactors and Tesla cars and stuff, but given that the EU just introduced even MORE sanctions against Russia, it seems that the reason OPEC has gone for the lower price has been to become an appealing replacement to Russia as far as supply goes. Russia's hold as the majority supplier is now in jeopardy, and Europe will probably need to look elsewhere. Lower prices, coming from nations that AREN'T under sanctions for financing illegal rebel operations in a sovereign nation that is requesting to become the newest member of NATO, with more reliable supply...

OPEC will gladly sacrifice cost-per-barrel if it means having a whole new continent of consumers.

Russia is in serious shit. It's in danger of losing the customers it relies upon to actually be a nation.

I vote we all rush to save the Russian people and bring them over here or at least somewhere in Europe.

Russian accents are sexy~

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Thing is about Putin, and his oligarch friends, is that they're so rich a massive downturn in Russia's economy won't affect them at all.

Most of them non-dom to London anyway. The entire Russian economy can go to shit and Putin's grip around the population means many of them will still love him and praise him for 'standing up to the western bullies'.

I dread to think what the rich/poor divide is like in Russia having not studied it, but I would it's massive. Wealth concentration there is centered almost entirely around the Kremlin. Even if you're an oligarch, if you fall out of favor, better watch your back.

If people wanted a perfect example of a cult of personality, I think Putin would be it.

You'd be surprised. Putin is actually pretty reviled amongst the "common" folk of Russia. It's largely understood by the populace that he rigged the elections and their votes didn't mean shit, but he's using the Russian military not just for foreign defense, but to keep people from breaking out in riots or protests. Russia is basically North Korea, except without the worship of the leadership.

Thing is...the Russian military can only be Putin's pet bulldogs as long as there's money around to finance them. No money, no military. Even if he himself doesn't suffer financially, he's gonna find himself without an army. No army, an angry populace...

What could possibly go wrong?

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http://www.ft.com/fastft/268082

The new EU sanctions I mentioned.

[Nine]

Russia is pretty fucked right now. I'm curious to see how they handle their situation. Bizarrely it seems like at the moment they are just continuing to dig themselves deeper into the hole by backing the rebels in Ukraine. Even if the rest of the world were willing to ignore it the EU certainly doesn't want an old military like Russia bullying its way west.

[Creed of Heresy]

Russia is pretty fucked right now. I'm curious to see how they handle their situation. Bizarrely it seems like at the moment they are just continuing to dig themselves deeper into the hole by backing the rebels in Ukraine. Even if the rest of the world were willing to ignore it the EU certainly doesn't want an old military like Russia bullying its way west.

Neither does the US. Having a NATO member right next to Russia? Valuable asset.

[Chas]

Russia is pretty fucked right now. I'm curious to see how they handle their situation. Bizarrely it seems like at the moment they are just continuing to dig themselves deeper into the hole by backing the rebels in Ukraine. Even if the rest of the world were willing to ignore it the EU certainly doesn't want an old military like Russia bullying its way west.

Neither does the US. Having a NATO member right next to Russia? Valuable asset.

Which might explain Putin's gamble.

[Nine]

Which might explain Putin's gamble.

Before Russia got involved I think Ukraine's chances of NATO membership were a lot lower.

[Creed of Heresy]

To be fair, though, [also hello Insanity my bro-love] Ukraine actually only was considering NATO membership in a sort of "meh, maybe..." kind of way until Russia started making it clear they weren't going to drop their influence over them without a fight of it. Then when Ukraine realized that Russia was going to pull some serious shenanigans, they were like "YEP. NATO IT IS."

Can't say I blame 'em, either, nor can I see any reason not to admit them in, either.

Anything that gives a big giant "fuck you" to Putin is good as far as I'm concerned.

[Nine]

Even when they were considering asking for NATO membership (probably to prevent exactly what happened anyway) it was unlikely they would have been actually given it. Now it sounds pretty likely. NATO gets to stick it to Russia and Ukraine gets some much needed backing. Ukraine would also make for a great buffer between Russia and the rest of eastern Europe.

Love ya too Creed <3