Rouble exodus hits Russia credit rating

Rouble exodus hits Russia credit rating

www.ft.com

Russia on Monday became the first G8 country since the start of the financial crisis to have its credit rating downgraded after Standard and Poor’s took fright at the recent exodus from the rouble and sharp drop in oil prices.

S&P said it had lowered Russia's foreign currency credit rating by one notch from BBB+ to BBB because of the “rapid depletion” of the country’s foreign exchange reserves and the “difficulty of meeting the country’s external financing needs”. It said the outlook for the rating was negative.

Russia’s reserves have fallen by $128bn since August to $455bn, as the country battles the capital flight that began following the war with Georgia and escalated as the oil price fell and the global crisis worsened.

(visit the link for the full news article)

I'd like to take a moment to thumb my nose and say "Nyah-Nyah" at all the buffoons who've been running around here painting Russia as this model of prosperity and one of the prime threats to the United States' in our time of economic hardship. This goes to further a major point, when the United States sneezes, the rest of the world catches a cold, not the other way around.

There may be some economies out there who can survive a recession which ultimately could end up crippling us, but they are NOT among the current big players in the world. If this is happening in Russia, you can bet the Chinese are more than a little pensive and concerned.

Yes, there's been talk of America eventually having its credit rating downgraded over all of the out of control bailout spending, but the simple fact is, it hasn't happened here yet... but it just did happen to our old Cold War enemy, Russia.

www.ft.com
(visit the link for the full news article)

HAH! One big LOL, given all of the crap coming out of Russia during our financial crises. They kept saying how the US was over... well, it appears that one should pull the LOG out their own eye first...

Simple logic would have told anyone that they were taking it to the chin alot harder than the US has been. How many days in September & October did the Russian MICEX & RTS have to close early thanks to circuit breakers kicking in following double digit percentage drops? Russia's percieved "prosperity" was built upon a house of cards made up of artificially inflated oil prices over the Summer. When those prices came back down to Earth, Russia returned to the same state they had been in following the initial (and partial) recovery from the fall of the USSR.

This seems to be very bad news for the fragile free-market economy that lives there. Shouldn't this be really troubling?

well, I was posting here few times that Russia will be hit as one of the first countries. Putin was talking a lot of crap about the stromng Russian economy. but the reality is that they are weak and they stand on the gas and oil as only income products (but the prices are dropping down as we all know).

the oil sold outside the country was highly taxed and that is where from the Russia had some cash from. but now the russian exporters stoped selling the oil outside of the country. Putin already forced them to restart but they have a huge problems with transport now. they already cancelled most of it.

anyway, Russia it is not a solid market at all and with its lack of stability will be the first to go down.

and Putin and Russians will be forced to strike someone (maybe Georgia) or use other confilct to put the own people attention away from the real staff. as they did in the past.

but to be honest it is a domino game. and US are pretty on the top of the line too. but for the another reasons.

NWO works to destroy the global financial system anyway so maybe in fact it just doesn't matter any more who is going to lead the world collapse....

Ive been on here saying it all along. The US is NOT in this mess by itself. Russia is not in great shape as many folks on here try to paint. So to all you anti-US'ers and Pro-Russia's.....HA!!!

Looks like the ruble turning to rubble!!!

The article mentions that the war with Georgia is to blame for the decrease in capitalization of investments in Russian. What a load of bullshat - the Western press is just trying its hardest to show that the war was bad for Russia. The "fligh of capital" has nothing to do with the war. It is partly due to decrease in oil prices, partly due to general slowdown of the global economy, and partly due to outside investors who invest in Russia pulling out their money to deal with the financial crisis hitting the Western markets. Many venture capitalists that invested inside Russia now have a pressing need for cash as collaterilized assets are being devalued.

Originally posted by HunkaHunka
HAH! One big LOL, given all of the crap coming out of Russia during our financial crises. They kept saying how the US was over... well, it appears that one should pull the LOG out their own eye first...

Russia never said US was "over". What Russia did was blame the activities of US investors and speculators who had little regard for risk and were feeling opportunistic, for the global financial crisis. It was also blaming the fact that trading of collateralized securities, such as credit default swaps that got AIG into trouble, are mostly unregulated in the US and Western Europe.

Russia did say that US dominance of the world markets may be fading - and it is. US will remain a major player - no one argues with that - but it might not be the only major player anymore. No one is denying that financial situation in Russia is bad. But it is not significantly worse that the rest of the world, or US for that matter. Credit ratings were similarly lowered for Ukraine recently (US ally).

Originally posted by princeofpeace
Russia is not in great shape as many folks on here try to paint. So to all you anti-US'ers and Pro-Russia's.....HA!!!

So you appear to be comforted and happy that your economy is not being flushed down the toilet alone. Yes - Russia is feeling the heat. But it was the activities of investors, speculators, and brokers in the US that brought this mess about in the first place. And now you are laughing that you are pulling down the rest of the world with you? Keep laughing - see how much the rest of the world trusts you to run global finances again.

[edit on 8-12-2008 by maloy]

Originally posted by czacza
Putin was talking a lot of crap about the stromng Russian economy. but the reality is that they are weak and they stand on the gas and oil as only income products (but the prices are dropping down as we all know).

Oil and gas are not the only revenues stream for Russia. Don't confuse it with Middle East. Russia has a huge amount of non-energy raw resources, industrial products, high-tech products, and services industries.

And while oil prices are dropping, natural gas prices are not.

Originally posted by czacza
the oil sold outside the country was highly taxed and that is where from the Russia had some cash from.

Taxed? Far less so than many other exporters. It is not the tax where the government is deriving much of the income - but from ownership interest, and special-purpose entities run by the governmental oligarchs.

Originally posted by czacza
but now the russian exporters stoped selling the oil outside of the country.
Putin already forced them to restart but they have a huge problems with transport now. they already cancelled most of it.

What are you talking about? Do you have any sources?

Originally posted by czacza
and Putin and Russians will be forced to strike someone (maybe Georgia) or use other confilct to put the own people attention away from the real staff. as they did in the past.

When did Russia stage a military conflict to deflect attention away from economy?

By the same logic all of the countries in the world are about to attack each other - since all of them are facing economic problems and would like to turn the attention elsewhere.

It is not happening. Russia will not parttake in another conflict for the time being, and there isn't much opportunity for conflicts around Russia. This is all a myth anyway - that the government can escape the blame for economy by starting a war. The only way you can do that - is if the entire country's population is completely brainless.

S&P said it had lowered Russia's foreign currency credit rating by one notch from BBB+ to BBB because of the “rapid depletion” of the country’s foreign exchange reserves

Before you all go saying I told you so, I'd call attention to the above sentence. Since the standard currency of foreign exchange reserves is the US dollar, it strikes me that Russia's "depletion" of foreign exchange currency will only serve to help her out in the long run. Sure , Russia takes a credit hit for the moment, and yes, Russia's main source of income these days is her gas and oil, but in the end this hurts the USA more than Russia and I'm pretty sure Mr. Putin is aware of this. Doesn't China buy US debt to the the tune of a billion or so per day? Imagine what will happen when China undergoes a similar "depletion"?

Heh burdman here is my issue. Isnt this the same credit agency that still has a lot of the junk mortgages rated as AAA? Is this the same Standards and Poor that until the last minute had AIG as AAA? I wouldnt trust these punks as far as I can throw them. They all have an agenda. Im sure tanking Russia's economy is one of them. Russia is in a LOT better of a position at this current time because they actually have money. Make no mistake the only reason why America is alive now is because of the printing press period. If it wasnt for that we would be even worse off. For what its worth Russia with the low oil prices will go through their money fast so I happen to agree with the ratings but once again I cant stand the double standard.

I know how to solve the Russian economic problem!!! Maybe they should start exporting more Vodka than they consume!!! Nah. Without a bunch of drunks to run the government, where would their creativity come from?

Was it an age of Glasnost or Drunknost?

Originally posted by princeofpeace
I know how to solve the Russian economic problem!!! Maybe they should start exporting more Vodka than they consume!!! Nah. Without a bunch of drunks to run the government, where would their creativity come from?

Was it an age of Glasnost or Drunknost?

You know, Prince, since the President of the USA has himself admitted to past alcohol abuse and his DUI is a matter of public record, your comments ring rather hollow. How about we let the discussion regarding Russia's financial situation carry on, rather than dilute it with any more asinine comments.

Originally posted by princeofpeace
I know how to solve the Russian economic problem!!! Maybe they should start exporting more Vodka than they consume!!!

And I know how to solve America's problem!!!!!!!!!!!!!!!!!!!!!!! Maybe all the gun-toting rednecks should start shooting each other instead of exporting "democracy" by bombing shooting people in other countries!!!!!!!!!!!!!!!!!!!!

Any more bigotry and witty solutions?

Originally posted by princeofpeace
Nah. Without a bunch of drunks to run the government, where would their creativity come from?

AHAHAHAHHAHAA - I get it. It is funny, because Russians are supposed to be drunk. You are a riot man.

Originally posted by princeofpeace
Was it an age of Glasnost or Drunknost?

It is an age of comments that should be ignored for the level of idiocy they transpire.

reply to post by maloy


"What are you talking about? Do you have any sources?"

oh yes I do, but unfortunatetly in polish only. but you should be able to find it also in the russian press ( I hope).

link here:
wiadomosci.onet.pl...

on 9th Mr Tokariev, the president of Transnieft declared that the russian oil producers will drop the export (25% fall) to reduce the lost on it.

after that meeting he was called to meet Putin and on 15th he made a statement that they will keep to all obligations and asked others oil companies to do the same to help the russian budget.

the other oil companies went in panic cause thay already called off the tankers and had no idea how to solve the problem with transport.


and just to be clear on that. I belive that the conflict could start also some other country like china, india, pakistan or us when struck hard by the economical disastear. but it looks that Russia can be the first one to be badly affected. but I do not wish you so anyway as I do not want the conflict to start in the first place.

the problem is that it looks coming closer and closer from all directions.

Oh too bad! Russias credit has decreased. Is that because they are not supporting the globalist financial movement or because their money is actually not worthless like our money is.

BTW you can thank Russia for the affordable gas prices, they are as low as $1.50 a gallon here.

I wouldn't count Russia out yet. They have tons of gold and diamonds that can be dropped on the market for cash. Huge reserves of oil and gas that will be injected into the market in the next couple of years.

They are a country rich in natural resources but they are also a country rich in corruption at all levels of government.

It would be great, as an American, to say this will place the wooden stake into the Russian heart and kill it, as I am an old cold warrior; but in reality, you can put lipstick on a reformed communist and it's still a communist.

This day and age, someone has to want to buy all those diamonds and gold. With the world economy teetering on collapse most will be investing in things like food and fuel not diamonds. Not enough so to keep a whole country afloat anyways.

Vodka is still their better option. Studies show that people continue to buy alcohol whether things are going "great" or things are "bad". They just have to quit drinking up their own supply!!

Originally posted by hinky
I wouldn't count Russia out yet. They have tons of gold and diamonds that can be dropped on the market for cash. Huge reserves of oil and gas that will be injected into the market in the next couple of years.

They are a country rich in natural resources but they are also a country rich in corruption at all levels of government.

It would be great, as an American, to say this will place the wooden stake into the Russian heart and kill it, as I am an old cold warrior; but in reality, you can put lipstick on a reformed communist and it's still a communist.

[edit on 8-12-2008 by princeofpeace]

[edit on 8-12-2008 by princeofpeace]

I dont care id the president has admitted to using alcohol thats not what this is about. Im talking about a WHOLE country and how they could be exporting one of their resources.

Originally posted by maloy
The article mentions that the war with Georgia is to blame for the decrease in capitalization of investments in Russian. What a load of bullshat - the Western press is just trying its hardest to show that the war was bad for Russia. The "fligh of capital" has nothing to do with the war. It is partly due to decrease in oil prices, partly due to general slowdown of the global economy, and partly due to outside investors who invest in Russia pulling out their money to deal with the financial crisis hitting the Western markets. Many venture capitalists that invested inside Russia now have a pressing need for cash as collaterilized assets are being devalued.

Originally posted by HunkaHunka
HAH! One big LOL, given all of the crap coming out of Russia during our financial crises. They kept saying how the US was over... well, it appears that one should pull the LOG out their own eye first...

Russia never said US was "over". What Russia did was blame the activities of US investors and speculators who had little regard for risk and were feeling opportunistic, for the global financial crisis. It was also blaming the fact that trading of collateralized securities, such as credit default swaps that got AIG into trouble, are mostly unregulated in the US and Western Europe.

Russia did say that US dominance of the world markets may be fading - and it is. US will remain a major player - no one argues with that - but it might not be the only major player anymore. No one is denying that financial situation in Russia is bad. But it is not significantly worse that the rest of the world, or US for that matter. Credit ratings were similarly lowered for Ukraine recently (US ally).

Originally posted by princeofpeace
Russia is not in great shape as many folks on here try to paint. So to all you anti-US'ers and Pro-Russia's.....HA!!!

So you appear to be comforted and happy that your economy is not being flushed down the toilet alone. Yes - Russia is feeling the heat. But it was the activities of investors, speculators, and brokers in the US that brought this mess about in the first place. And now you are laughing that you are pulling down the rest of the world with you? Keep laughing - see how much the rest of the world trusts you to run global finances again.

[edit on 8-12-2008 by maloy]

wow, the pro US lovoers jump to declare Russia is bankrupt , while the real fact is USA is bankrupt , Russia has large amts of gold,platinum, silver and diamonds to back up , while USA HAS NOTHING