General Discussion

stevenleser

(32,886 posts) Mon Mar 3, 2014, 10:20 AM Mar 2014

Russian stock market plunges 10%, ruble in free fall. Russians expect Ukraine invasion backlash

http://www.bloombergview.com/articles/2014-03-03/bershidsky-on-europe-russian-assets-tumble

As the possibility of a war with Ukraine and international isolation pushed all Russian financial instruments and the ruble down, the Russian central bank finally decided to defend the free-falling national currency and raised its refinancing rate from 5.5 to 7 percent. Russians, however, have rushed to banks and exchange offices to buy up dollars and euros, and the stock market fell by about 10 percent. The central bank can hardly stop the panic by monetary means: it is caused by overpowering fear and pessimism, both quite rational in the current situation. Though there are macroeconomic reasons for the ruble to weaken, a peaceful resolution of the Crimea conflict would cause it, and the Russian stock indices, to bounce back.
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The US and Europe can affect the situation with economic sanctions. I am in favor of harsh sanctions.

6 replies

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Russian stock market plunges 10%, ruble in free fall. Russians expect Ukraine invasion backlash (Original Post) stevenleser Mar 2014 OP

Putin is now "open" to a fact-finding team to assess the crisis. I.O.W. he's begun the backpedaling. BlueCaliDem Mar 2014 #1

Merkel should take a hard line. All Russian troops out or harsh sanctions will ensue. nt stevenleser Mar 2014 #2

EU imports 32.6% of their oil from Russia, 38.7% of gas. Ohio4theWin Mar 2014 #5

It would only be costly if they couldn't get it elsewhere temporarily. Meanwhile the stevenleser Mar 2014 #6

kick nt stevenleser Mar 2014 #3

Russia's economy is barely bigger than Italy's. 1/7th the size of the US economy geek tragedy Mar 2014 #4

BlueCaliDem

(15,438 posts)

1. Putin is now "open" to a fact-finding team to assess the crisis. I.O.W. he's begun the backpedaling.

Reply to stevenleser (Original post)

Mon Mar 3, 2014, 10:29 AM

Mar 2014

This is one war that Putin cannot win no matter how many nukes he has in Russia's arsenal. The Soviet-Dictator-wannabe has realized that there is no Soviet Union anymore and his position in the world is weaker than he first thought. It's all about the money now and all the EU and the U.S. needs to do is freeze the accounts of the Russian oligarchs and Putin will immediately heel with tail between his legs.

He made a very bad move, and now he realizes it. I knew when President Obama came out strongly against the invasion of Crimea that he already had a strategy in place to back up his harsh words. Putin will heel and find a retreat or the oligarchs, who stand to lose billions collectively, will take him out.