Alexei Kudrin on Ukraine

[alice malice]

Two keys to the resolution of the Ukraine conflict. I have a better
handle on oil than on the Russian people, and, obviously, my handle on
oil is as slippery as anybody's grip on energy prices, but my guess is
that oil prices will continue to fall and that they will stay in a
range (WTI $65-35) that punishes Russia. The price now, like most
other commodities, while still in greater demand, though that demand
increase has slowed considerably, is weighed down by a supply glut, by
production capacity that is not shrinking even at these price levels.
So, the bubble in oil is still deflating. My guess is that these price
levels, even if China starts growing at 9 or 10% again, not likely,
and even if the US grows at 5% in the next 2 years, are still too high
and lower prices will be, a new normal, the norm for at least a
decade, if not longer. America has no real energy policy, so you never
know for sure, but it looks like America's non-plan is on track to
continue increasing production and reducing its demand. We shall see
how that works out if American lifts its ban on crude exports and if
the go-green shoots get mowed over by cheaper energy.But I think the
Saudis have lost a lot of American market share to American Shale &
Co. and is not going to win it back at these prices. So we're going
lower. And we may stay down for a long time.


 How will Europe deal with Russia and its dependency on Russian
energy? Well, first they need to get prop up their economy, and it
looks like the Central Bank will do that next year. Russia could send
Europe right back down with a hike in energy costs or sanctions, so
it's a gambit in Europe more so than in the US, and if Putin, to win
hearts and patriots, does something dumber than the dumb things he's
done thus far, it could be a long stalemate over there, sanctions on
sanctions etc.

But, I suspect that Putin will give in, or better, his men will, and
they will mend fences with Europe and in time with America. Russia has
little choice in the matter. The Market is far too powerful a force,
and its getting stronger as Russia gets weaker.


But my crystal ball is cracked ina million places, so....just cosmic debris.

On Tue, Dec 30, 2014 at 1:27 PM, Mark Thibodeau <jerkyleboeuf at gmail.com> wrote:
> Oil prices will go up. It's inevitable. If anyone can hang on, it's the
> Russians.
>
> Not that I have a dog in this fight. Aside from not wanting to see World War
> III.
>
> Jerky
>
> On Tue, Dec 30, 2014 at 8:58 AM, alice malice <alicewmalice at gmail.com>
> wrote:
>>
>> Some here claim that Putin has done a good job for the Russian people,
>> that their standards of living have improved, but the irresponsible
>> management of Russia's economy, too heavily dependent on energy
>> revenue, has left her vulnerable to market risk, the price of oil, and
>> the military escursions and the costs of these, including, now
>> sanctions, hardly supports the argument that Putin is a man of the
>> people. Moreover, his popularity will fade with the economy and the
>> protests that he faced may return, though Putin has and probably will
>> do everything to prevent them. Unfortunately, he can do little to
>> fight off capital flight, a free fall in oil and the currency, so his
>> everything will be more repression and violence against citizens.
>>
>>
>> Alexei Kudrin, is the former deputy prime minister and may still have
>> some influence on Putin. He has consistently called for economic
>> reform, reforms that must also include independent courts and a legal
>> system that guarantees property rights; competitive, free, and fair
>> elections; a substantial, freely operating, and responsible political
>> opposition as a permanent element of national politics; and state
>> accountability to society.
>>
>>
>>
>>
>> from a brief in Reuters today by Darya Korsunskaya and Elena Fabrichnaya
>>
>>
>> n December 2008, oil fell during the global financial crisis to around
>> $36 but even then Russia did not reinstate capital controls.
>>
>> "This crisis is more psychological, more emotional than those we have
>> seen in the past. But in principle, the situation is not very
>> different from 2008. We can always switch to measures we used in
>> 2009," the source said, naming state guarantees and direct funding of
>> troubled companies among possible measures.
>>
>> However, former finance minister Alexei Kudrin said the current crisis
>> was different because of the sanctions. "To come out of the crisis,
>> the government and the president should settle the conflict with
>> leading powers, mainly Europe and the United States," he said last
>> week.
>>
>> However, the top-level government source held out little hope for an
>> easing of tensions with Washington. "Relations with the United States
>> are frozen," he said. ($1 = 56.2950 roubles)
>> -
>> Pynchon-l / http://www.waste.org/mail/?list=pynchon-l
>
>
-
Pynchon-l / http://www.waste.org/mail/?list=pynchon-l