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Russia on Verge of Junk
Russia may lose its investment-gradecredit rating for the first time in a decade after Standard & Poor’s said it’s considering a cut amid the country’s worst economic crisis since the 1998 debt default.
There’s at least a 50 percent chance that Russia will be lowered to junk within 90 days, S&P said in a statement as it put the country on negative credit watch. Moody’s Investors Service and Fitch Ratings rank Russia one step higher than S&P, which lowered the rating one level in April to BBB-.
The move “stems from what we view as a rapid deterioration of Russia’s monetary flexibility and the impact of the weakening economy on its financial system,” S&P said.Oil prices at a five-year low and sanctions over the conflict in Ukraine have pushed the world’s biggest energy exporter to the verge of recession. The central bank in Moscow has spent one-fifth of its international reserves and increased benchmarkinterest rates six times since March, when Russia came under international sanctions after it invaded Crimea.
While the ruble strengthened for a third day as the government told state-run exporters to sell foreign currency, it’s still lost 40 percent against the dollar this year, the second-worst performer among more than 170 currencies tracked by Bloomberg after Ukraine’s hryvnia.Photographer: Kirill Kudryavtsev/AFP via Getty Images
The ruble remained higher following S&P’s announcement, trading at 54.7005 per dollar as of 1:34 p.m. in New York, up 2 percent from yesterday. Dollar-denominated bonds fell, sending yields on notes due 2030 up 0.11 percentage point to 6.24 percent. Yields touched a five-year high of 7.64 percent Dec. 16.
The costs to insure Russia’s debt against non-payment for five years more than doubled this year to 4.21 percentage points, according to data compiled by Bloomberg. That compares with 4 percentage points for Lebanon, which is rated B- at S&P, or six levels below Russia.
The S&P warning comes as Russia tries to avert a banking crisis. The central bank put National Bank Trust, the country’s 15th-biggest lender based on retail deposits, under its control yesterday, the first bailout since the currency crisis started.
Lawmakers rushed legislation through the lower house of parliament today allowing the Deposit Insurance Agency to buy stakes in banks before they face bankruptcy proceedings to keep the system stable.
The penalties imposed by the U.S. and its allies have locked Russian corporate borrowers out of international debt markets and curbed investor appetite for the ruble, stocks and bonds.
Capital Outflows
The central bank raised the key rate to 17 percent from 10.5 percent in the early hours of Dec. 16, the biggest increase since 1998.
The economy may shrink as much as 4.7 percent next year, the most since 2009, if oil averages $60 a barrel under a “stress scenario,” according to the central bank. Net capital outflows may more than double this year to $134 billion.
Investors often disregard ratings companies’ credit grade and outlook changes.France’s 10-year yield, which was 3.08 percent when S&P removed its top rating in January 2012, tumbled to a record-low 1.339 percent on Aug. 15 this year.
Moody’s cut Russia’s credit score one level to its second-lowest investment grade in October, citing concern that the sanctions will hurt its economy. The continued erosion of Russia’s foreign-exchange reserves because of capital flight, low oil prices and borrowers’ lack of access to credit were also cited by Moody’s.
Credit to Bloomberg
http://nunezreport.blogspot.com/
Source: http://nunezreport.blogspot.com/2014/12/russia-on-verge-of-junk.html
Putin is THE ANTICHRIST!
If Russia defaults on her debt, this time it will bring down the big banks AND the Western economies. Meanwhile Russia has HUGE energy deals with Turkey and India, plus the financial backing of China. Once those energy deals kick in, Russia will use some of her resources to buy back Rubles at bargain prices. Since the new Russian energy deals cut out the US dollar, there is very likely to be a dollar crisis in January, especially since the value of the dollar is pegged to the price of Saudi oil. We could even see a dollar crash in 2015. Putin holds all the cards and is NOT, and the uniformed say, the antiChrist. Every day new reports come out showing how evil the US government is. As a result of the release of the classified report on CIA torture, Germany has indicted George W. Bush, Dick Cheney and Donald Rumsfeld. The US could very well be hit by an EU embargo if it refuses to extradite these monsters to stand trial be an international tribunal. Recent mainstream media reports out of England prove the Ukraine is responsible for shooting down that Malaysian airliner; and that the US is behind the overthrow of the legitimate government of the Ukraine and replacing it with a neo-NAZI puppet regime.
You need to do your research. Me, my family and some friends invested a lot in currency exchange with the ruble. Yes, we are here in the US and today for every $1 that we invested we will be getting back almost $40. But we will choose to hang with it because here are your so called trash percentages!!!!
1.
Sberbank of Russia
19475790 + 5.08%
2.
Gazprombank
4262868 + 7.65%
3.
VTB 24
2613550 + 7.79%
4.
Bank of Moscow
2182937 + 14.85%
5.
Agricultural Bank
1990343 + 3.06%
6.
Alfa-Bank
1886291 + 6.79%
7.
FC Opening
1407246 + 10.82%
8.
UniCredit Bank
1106421 + 5.49%
9.
PSB
943650 + 1.26%
10.
Raiffeisenbank
831913 + 10.58%
All Plusses my friend +++++++ and thats how billionaires are made. Taking a gamble and having common business sense, instead of believing fear porn!!!
AND when the FED’s pull out of the US market, all you will see is red and ————— signs.
Yeah, that’s what all these investors thought just before the housing market collapsed and they lost everything they owned (and then some).
Just might want to cash in on a large percent of that now.. if it isn’t too late already.
rating agencies are crooks … just a division of the criminal establishment … AAA+ plus credit in the US. with no industries other than bomb building… I’d stand by Russia any day of the week … In fact, I might be moving ton of money into the yuan, from that position I’ll buy up rubles.. and then .. a gold back currency … hyper inflation coming to USA, Canada and Europe .. go to hell you devil worshipers …
russia will be just fine.
Yeah but for the time being though we can still all enjoy watching Obama make an ass-wipe out of Mr. Pukin???
Heres why MANY HERE on BIN are so “lackdasial” in their efforts to investigate or report anything substantial:
BLOOMBERG? Come on !! CIA controlled for heavens sake.Cant you “reporters and investigators” stretch your skills a little further , learning to dig in other NON Cia controlled entities so you have someting to COMPARE???
HERES SOME NEW INFORMATION THAT JUST CAME IN:
Just as I thought; jacking up the interest rate was the correct course of action to take, capital controls would have been nice too but the Central Bank measured intervention is already yielding results.
Today from ZeroHedge: Ruble Rallies 34% After Biggest Russian Intervention In 5 Years
LINK> http://www.zerohedge.com/news/2014-12-25/ruble-rallies-34-after-biggest-russian-intervention-5-years
The Bear Squeezes Back: Ruble Rises Against Dollar:
“The Russian ruble had been falling in value against the U.S. dollar. It fell as much as 11 per cent on Dec. 16. Speculators borrowed rubles in the morning and sold them for dollars immediately. At the end of that day, the rubles were bought back for 11 per cent less, the loan repaid, and the speculators picks up an 11 per cent profit in one day, just short of 4,000 per cent if it could be sustained for a year.
Except that on December 17, the Russian Central Bank intervened in the foreign exchange market to support the value of the ruble. By selling from its deep U.S. dollar reserves, the Russians were able to drive up the value of the ruble, forcing speculators to take huge losses. The new headline was “Ruble Surges.”
Later last week, and again to start the week of December 22, the ruble has been gaining ground against the dollar. The engineer of the turnaround is Ms. Elvira Nabiullina [13], Governor of the Bank of Russia, the first woman to head a G8 central bank, and formerly economic adviser to Putin.
By defeating attempts to drive its currency down, the Russian Central Bank had executed a procedure known as a “bear squeeze,” the bears being those who believed the ruble would fall in value. Feeding this belief was major misinformation, and misunderstanding of the Russian economic and financial situation. [...]”
More at the LINK> http://www.informationclearinghouse.info/article40558.htm
HERES A VERY INSIGHTFUL INTERVIEW FROM AN AMERICAN ECONOMIST MICHEAL HUDSON
RUSSIAN PIVOT
http://michael-hudson.com/2014/12/russian-pivot/
HERES ANOTHER REALLY GOOD ARTICLE….
Stick this in your ear “Bloomberg” and your very “kindergarten commentaries”
GRANDMASTER PUTINS TRAP
http://orientalreview.org/2014/12/25/grandmaster-putins-trap/
Russia has more friends than the Rothschilds and the lizards. Friends rule when it is time to rule, but peace and love can be blind.