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Russian Bank fails as Russia edges closer to the Financial Abyss

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posted on Dec, 26 2014 @ 08:47 PM
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Russia's 15 largest lender failed the other day as their central bank stepped in and took over National Bank Trust. It isn't a surprise as Russia has over 300 banking companies with many of them financially challenged. The future looks full of banking consolidation and outright banking failure while the economic crisis in Russia boils over.

To add fuel to this fire Standard and Poor's has placed a negative watch on Russia's credit rating. Since Russia is already at one level above Junk status any reduction in rating would leave Russia with a Junk rating, heavily restricting foreign investment in Russian government bonds as most financial institutions refuse to deal with Junk rated bonds. Historically there is a 2 to 1 chance a negative watch turns into a rating downgrade later. The rating review will take until the middle of January 2015.

While many observers believe Russia has extensive financial reserves to protect it's banking system a few keen observers question the liquidity of much of these reported reserves. Much of the two national wealth funds have been committed to various sectors of the economy already while the Russian government has already burned through significant reserves trying to defend the Ruble. Informal capital controls are being implemented as the government orders large trading companies to convert foreign reserves into Rubles immediately, temporarily boosting the Ruble over the Holiday season in the West. The Russian parliament recently rushed through in one day legislation allowing the central bank to buy stakes in commercial banks to stave off bankruptcy proceedings.

Russians who took out US $ denominated house mortgages to save a few percent interest have been all but wiped out with the 40% currency devaluation this year. They have set up social website groups and threatened protest marches. Many discussions about what to do for this upwards of 100.000 people problem have taken place but nothing is settled so far. Due to the Western sanctions Russian businesses also face US $ denominated loan problems as they can't simply roll the loan over anymore. Critical state companies have been lining up to get money from the Russian central bank, however the mid to small companies worry about being left out in the cold with no state support. Putin is already on record saying not all business can be saved by the government.

The Russian financial system is clearly on the edge of complete failure. Recent requests from China to support the Ruble provide evidence that the government doesn't have the resources to solve the problem. Any new significant shock to this system could bring it down completely. If your financial adviser hasn't pulled you out of Russian stocks you should probably give him/her a call right about now.

www.bloomberg.com...




posted on Dec, 26 2014 @ 09:19 PM
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Correction:
Russia has over 800 banks, not 300. This year alone the Central Bank has revoked over 80 banking licenses.



posted on Dec, 26 2014 @ 09:37 PM
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a reply to: noeltrotsky

Putin has told his staff that they will be working through most of the holiday due to all the economic crisis going on. They will work something out. And I'm hearing that other US investors saying that now is the time to buy in on the Ruble. They believe that the ruble will regain lost ground by the middle of '15. I guess we will see. But it sounds to me like economic warfare. If another country were doing this to us,it would be war for sure.



posted on Dec, 26 2014 @ 10:53 PM
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It sounds a lot like the US recently. Whatever their financial situation, they do undeniably have real assets and real estate. If I had money and know-how, I'd be sorely tempted to be buying assets in Russia because those assets would seem to be under-valued at moment!

That said, Russian leadership may have brought this upon their own country by behaving in a way that the international community largely looked down upon. Now I don't want to get into a "Yeah but the USA has done this stuff!" argument, because nobody is free of guilt least of all the USA. But the fact is that most of the developed world was calling on Russia to knock off what they were up to, and when they refused, it seems entirely possible that people started to feel leery of how level-headed Russia is, and if there's one thing that scares investors, it's unpredictability.

I'm sorry for the regular citizens of Russia who, like many Americans, watch their leadership behave in a way that ignores humanity for the sake of nationalism and profit.
edit on 26-12-2014 by TheBlackTiger because: (no reason given)



posted on Dec, 27 2014 @ 12:21 AM
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Here are some facts...

- The three big US rating agencies are political tools as we have seen many times before

- What those rating agencies give to Russia doesn`t matter, because they have been cut off of Western funding any ways and those are the ones who use them

- Russia has, because of being cut off by Western funding, liquidity problems

- Not only rumours, but China is going to provide liquidity if needed

- The loans of Russian businesses are mostly in the hands of European institutions, they are the ones who will get hurt by businesses who go bust

- Russian businesses going bust doesn`t mean Russia itself is going to default

- The Rouble support (buying) by the Russian Central Bank means a great deal of the money is still there (but at the Central Bank) and is worth as much as the Rouble is worth

- The Rouble is now right where it should be with a loss of 30/40% to the Dollar because of the lower oil price (with the strength now of the Dollar it should be about 1 to 40 without lower oil)

- With peak oil already have occurred (only to be offset with the US shale boom, which will quickly go down also), oil prices are most likely going to recover in the not so near future (it still might take a few years), and by so also the Rouble

- Pieces like the OP are written for political means very frequently


edit on 27 12 2014 by BornAgainAlien because: (no reason given)



posted on Dec, 27 2014 @ 12:32 AM
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originally posted by: Dimithae
a reply to: noeltrotsky

Putin has told his staff that they will be working through most of the holiday due to all the economic crisis going on.


which means didly squat considering Russia doesn't celebrate Christmas and doesn't recognise Dec 25th as being such a big deal.


Christmas is celebrated normally on the January 7th. The date is different because the Russian Orthodox church uses the old 'Julian' calendar for religious celebration days


This '' Putin is evil and Russia's in trouble because they've denied officials Christmas off'' is a BS FOX NEWS headline that people seem to have swallowed.



posted on Dec, 27 2014 @ 12:51 AM
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a reply to: Agit8dChop

which means didly squat considering Russia doesn't celebrate Christmas and doesn't recognise Dec 25th as being such a big deal.


But it does mean didly squat.....



In a televised government session, Putin told ministers that they could not take off the customary period from January 1st through the 12th, saying, "For the government, for your agencies we cannot afford this long holiday, at least this year—you know what I mean."

Putin Cancels New Year's Holiday for Government Workers



The MSM has a lot of people psyched out and freaked out.




posted on Dec, 27 2014 @ 02:19 AM
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Here`s someone who`s more level headed about the whole situation...

Russian Pivot



MICHAEL HUDSON, ECONOMICS PROF., UNIV. OF MISSOURI, KANSAS CITY: It’s good to be here. Since the last time we talked, which was almost a month ago, the world’s geopolitics, its trade patterns and its military alliances, have radically changed. And as you point out, most of this is because Russia has given up on Europe and reoriented its oil and gas trade, and also its military technology and its military alliances, towards Eurasia.


Source



posted on Dec, 27 2014 @ 03:13 AM
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China will drop the economic equivalent of an atomic bomb on US dollar if there really was a problem with Russia and will not allow Russia to fall since it will give the banking mafia of the west an advantage. Right now China have the banking mafia by the balls forcing them to sell of the physical gold at lower prices for worthless fiat dollar and the banking mafia is getting desperate needing a WW3 to get out of the mess and be able to continue the Ponzi schemes and not be found out by the masses in US.

The Chinese are waiting for the next derivative collapse that will nuke US economy from within one more time so that people cannot blame the Chinese for the problem even if they are not helping Americans out, but using the situation for their benefit and plan for the future where US becomes marginalized.

Turkey got the gas pipeline from Russia now, since the Syrian pipeline from Quatar became a bust when the western mafia could not get rid of Assad. So what is the Saudi/US hegemony going to do that they have not already tried to keep the Petro dollar alive? The dumping of oil on the world market will not change the fact that the derivative collapse is coming again.
edit on 27-12-2014 by LittleByLittle because: (no reason given)



posted on Dec, 27 2014 @ 04:51 AM
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a reply to: Agit8dChop

Relax. I never said anything about him being evil for doing this. If I was running a country and we were having a crisis,I would make my staff stay and keep working. Don't like it,get another job. I was merely pointing out that him and his staff were working on the economic issues Russia is having right now,and would find a way out of it.

Putin works on his birthday,and almost everyday. And here we have a president who is already on vacation and won't be back till the new year. Don't even talk about congress and how few a days they work. They are the most over paid lazy fools ever. Talking about welfare....they don't do their jobs right if they bother to show up at all,and then they vote against their people back home and let lobbyists write the laws they pass.What kind of representation is that? Yet we have more and more taxation. We need new leaders that can lead for a change.



posted on Dec, 27 2014 @ 05:46 AM
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Banks do fail in an economy but not in the west these days becaus the state takes our money to prop them up.

These too big to fail banks since 2008 have got bigger and so have the bribes being paid to our politicians.

S&P are puppets of the banks in the west and gave them all AAA+ in 2008 just before they all went bang so i think Russia has nothing to fear with just one bank going down and lets remember that Russia is not in debt like the USA.

Zionist need removing from our banking system and that will only happen by using force



posted on Dec, 27 2014 @ 05:57 AM
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The way I see it, the worse off Russia's economy gets, the closer we get to the Big Kaboom.

Earth hasn't had a good nuking in awhile. USA is ripe for it.



posted on Dec, 27 2014 @ 07:28 AM
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originally posted by: BornAgainAlien
Here are some facts...

- The three big US rating agencies are political tools as we have seen many times before

- What those rating agencies give to Russia doesn`t matter, because they have been cut off of Western funding any ways and those are the ones who use them

- Russia has, because of being cut off by Western funding, liquidity problems

- Not only rumours, but China is going to provide liquidity if needed

- The loans of Russian businesses are mostly in the hands of European institutions, they are the ones who will get hurt by businesses who go bust

- Russian businesses going bust doesn`t mean Russia itself is going to default

- The Rouble support (buying) by the Russian Central Bank means a great deal of the money is still there (but at the Central Bank) and is worth as much as the Rouble is worth

- The Rouble is now right where it should be with a loss of 30/40% to the Dollar because of the lower oil price (with the strength now of the Dollar it should be about 1 to 40 without lower oil)

- With peak oil already have occurred (only to be offset with the US shale boom, which will quickly go down also), oil prices are most likely going to recover in the not so near future (it still might take a few years), and by so also the Rouble

- Pieces like the OP are written for political means very frequently



As of Friday, the Ruble had recovered nearly all its losses. The west successfully destroyed Russia in the 80s through currency manipulation and taking most rubles out of circulation.

Putin is hip to the plan. Ultimately its going to backfire on the dollar since the dollar is pegged to oil.

This is the final gasp of the dollar's dominance and a final desperate act of the western cabal.

These are historic times and we are just beginning to witness an incredible transfer of power.



posted on Dec, 27 2014 @ 08:28 AM
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originally posted by: BornAgainAlien
Here are some facts...
- The three big US rating agencies are political tools as we have seen many times before

The ratings agencies are much less political tools than most businesses. Making mistakes doesn't make them political tools.



- What those rating agencies give to Russia doesn`t matter, because they have been cut off of Western funding any ways and those are the ones who use them

The ratings Russia gets matters greatly. Sanctions don't come from every country in the World, however a Junk rating status will literally cut Russia off from almost all international investment in government bonds. Banks can't hold Junk rated bonds on their balance sheets and meet financial regulations.



- Russia has, because of being cut off by Western funding, liquidity problems
- Not only rumours, but China is going to provide liquidity if needed

I have yet to see any firm Chinese plan to provide the Russian economy any liquidity. Financial crises happen in minutes and hours now. If you aren't acting until the next day you are too late as Russia saw with the last Ruble pounding. The announcement of Chinese support isn't a plan.



- The loans of Russian businesses are mostly in the hands of European institutions, they are the ones who will get hurt by businesses who go bust
- Russian businesses going bust doesn`t mean Russia itself is going to default

Businesses defaulting is exactly the type of shock the Russian financial system doesn't need. That default comes with hundreds of unemployed and increased media coverage of economic problems.



- The Rouble support (buying) by the Russian Central Bank means a great deal of the money is still there (but at the Central Bank) and is worth as much as the Rouble is worth

This is pure fallacy. The government can print as many Rubles as it wants at any time...so with this logic they have unlimited money. The truth is once the foreign currency reserves are blown then the Russian Ruble blows in the wind and the government must start getting foreign reserves through bond auctions at exorbitant prices or by seizing foreign reserves companies and citizens have.
Typically when a country under financial crises runs out of foreign reserves the value of the currency implodes.



- The Rouble is now right where it should be with a loss of 30/40% to the Dollar because of the lower oil price (with the strength now of the Dollar it should be about 1 to 40 without lower oil)

Many other Petro state currencies have performed significantly better than Russia's Ruble. The Ruble isn't 'where it should be' right now, even Putin says it is extremely undervalued.



- With peak oil already have occurred (only to be offset with the US shale boom, which will quickly go down also), oil prices are most likely going to recover in the not so near future (it still might take a few years), and by so also the Rouble

Peak Oil will save Russia? Hang on to that if it makes you comfortable.



- Pieces like the OP are written for political means very frequently

Amazingly not everything written about Russia is political one way or the other.
edit on 27-12-2014 by noeltrotsky because: formatting



posted on Dec, 27 2014 @ 08:29 AM
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a reply to: mcChoodles



These are historic times and we are just beginning to witness an incredible transfer of power.


I'm behind anything that removes the Zionist banker control over the world and if that means going hungry then hungry i will be.

We cannot continiue the way we are going and too me Putin is a hero for standing up to these bankers and their greedy puppets who are ex lawyrers come politicians.

I won't make money selling rope because i will be giving it away free if/when the tables turn.


edit on 27-12-2014 by VirusGuard because: (no reason given)



posted on Dec, 27 2014 @ 08:48 AM
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originally posted by: LittleByLittle
China will drop the economic equivalent of an atomic bomb on US dollar if there really was a problem with Russia and will not allow Russia to fall since it will give the banking mafia of the west an advantage. Right now China have the banking mafia by the balls forcing them to sell of the physical gold at lower prices for worthless fiat dollar and the banking mafia is getting desperate needing a WW3 to get out of the mess and be able to continue the Ponzi schemes and not be found out by the masses in US.

The Chinese are waiting for the next derivative collapse that will nuke US economy from within one more time so that people cannot blame the Chinese for the problem even if they are not helping Americans out, but using the situation for their benefit and plan for the future where US becomes marginalized.

Turkey got the gas pipeline from Russia now, since the Syrian pipeline from Quatar became a bust when the western mafia could not get rid of Assad. So what is the Saudi/US hegemony going to do that they have not already tried to keep the Petro dollar alive? The dumping of oil on the world market will not change the fact that the derivative collapse is coming again.

Maybe that's why they allowed the banks to use insured funds again to trade in derivatives. The derivatives market ready to implode would need the backing of the government. I'm talking about the one put in the spending bill that Senator warren had a problem with.



posted on Dec, 27 2014 @ 09:11 AM
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a reply to: noeltrotsky



The ratings agencies are much less political tools than most businesses. Making mistakes doesn't make them political tools.


For someone who has studied economics you should know the following :



When the subjectivity of these ratings are combined with the fact that the credit ratings market is overwhelmingly dominated by just three agencies-Moody’s, Standard & Poor’s and Fitch Ratings-all of which are American agencies which derive much of their income from the very Wall Street banks they claim to be impartially evaluating, the potential for abuse is rampant. It should be no surprise, then, that the historical record is rife with examples of the “Big Three” agencies’ corruption.


Source



Many other Petro state currencies have performed significantly better than Russia's Ruble. The Ruble isn't 'where it should be' right now, even Putin says it is extremely undervalued.


Putin thinks it should accounts for a 25/30% drop, but I read an important Russian (forgot his name) disagreeing with him that it should be between 30/40%.

Because there have been pegging...

Source



This is pure fallacy. The government can print as many Rubles as it wants at any time...so with this logic they have unlimited money. The truth is once the foreign currency reserves are blown then the Russian Ruble blows in the wind and the government must start getting foreign reserves through bond auctions at exorbitant prices or by seizing foreign reserves companies and citizens have.


Russia doesn`t need that much Dollars because it already sells in other currencies and China is able to provide Dollars if needed, besides Russia still gets Dollars from it oil sales.



Peak Oil will save Russia? Hang on to that if it makes you comfortable.


Peak OiL



Amazingly not everything written about Russia is political one way or the other.


You`re right, but part of them are, especially now when the West tries to stir up things in Russia.

You would think that someone who has studied economics had more knowledge of economic warfare and how it`s done, oil, geopolitics and knows there`s no room for emotions in economic analyses.



posted on Dec, 27 2014 @ 09:16 AM
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just waiting to see what happens to all the Chinese businesses that used copper as collateral on loans, copper is now piling up outside the bonded warehouses, and the Chinese firms are 15 trillion dollars in debt, copper prices are falling, over seas income is falling, does not read good at all.



posted on Dec, 27 2014 @ 09:29 AM
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a reply to: BornAgainAlien

Yes the big three rating agencies are 'ripe for corruption', but this is different than 'political tools'. The EU has wanted a credit ratings agency based in the EU for a long time. I still haven't seen any significant studies proving corruption, only that the potential exists.



posted on Dec, 27 2014 @ 09:29 AM
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a reply to: pikestaff

Never heard of that issue....interesting.



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