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3.20.22
Russia's invasion of Ukraine has come with a heavy price for the government. Western sanctions have isolated it from the international financial system and choked off demand for many of its key exports. Sanctions have cut off Russia's access to much of its foreign reserves, threatening to plunge the country into default as it could struggle to meet its foreign debt payments. The ruble has plummeted to record lows and the country's stock market has been paralyzed for weeks. S&P Global this week cut Russia's credit rating to "CC", which it defines as "default imminent with little prospect for recovery." It's not just the government that will struggle to raise capital on the global market. Sanctions have thrown the future of many of its biggest companies into doubt. S&P Global said this week it had made 121 changes to the ratings of companies that cited the Russia-Ukraine war, rising energy prices, or both as reasons. Of that total, 77 were Russian. "In terms of creditworthiness, the Russian-Ukraine conflict has had the largest impact on banks, with 28% of total related rating actions," the agency said.
Formerly lucrative firms, such as banks, energy producers and mining companies, have been reduced to junk status. Commodity traders are deliberately shunning Russian shipments of key raw materials and countries are scrambling to wean themselves off Russian energy supplies. The agency said there are already 30 "fallen angels" as a direct result of the Russia-Ukraine conflict. The term refers to an issuer whose credit rating has been cut from investment grade to speculative grade, also known as junk. Shares in some of the country's biggest corporates no longer trade in New York or London, where stock in the likes of Sberbank, oil and gas producers Gazprom and Rosneft, and metal producers Norilsk and Rusal, plunged to almost $0 a couple of weeks ago. And it won't end there. S&P Global said there was huge uncertainty around the extent, the outcome and the consequences of Russia's war in Ukraine. "Irrespective of the duration of military hostilities, sanctions and related political risks are likely to remain in place for some time," S&P said. "Potential effects could include dislocated commodities markets--notably for oil and gas--supply chain disruptions, inflationary pressures, weaker growth, and capital market volatility."
I wonder? Is starving your people to death worse than shooting or bombing them? Punishing your own people for your political ambitions just doesn't seem like a good plan in the long run.
Some Russian companies are doing quite well, even under sanctions. For example Rusal (its owner is the oligarch Deripaska). Is it because the sanctions are too formal?
in Russia, oligarchs don't just quit their companies. I am sure that even today Deripaska is directly related to Rusal - in fact, though not officiallyDeripaska stepped down from RUSAL in May 2018, the day after seven board members and the chief executive resigned.
Aluminum Traders Game Out the Options: Sanctions, Tariffs or Ban
(Bloomberg) -- News that the US may target Russian aluminum in retaliation for attacks in Ukraine is sending shivers through the global metals market, reviving memories of the panic that followed previous sanctions on United Co. Rusal International PJSC just four years ago.Most Read from...news.yahoo.com
Aluminium heads for more supply chaos as Joe Biden weighs Russia ban
The Biden administration is considering options including sanctions on Russia's top producer of aluminium as the White House looks to punish Moscow for its military escalations in Ukrainewww.business-standard.com
in Russia, oligarchs don't just quit their companies. I am sure that even today Deripaska is directly related to Rusal - in fact, though not officially
Some Russian companies are doing quite well, even under sanctions. For example Rusal (its owner is the oligarch Deripaska). Is it because the sanctions are too formal?
Sanctions are largely symbolic and will not serve their purpose (compelling Russia to act differently) so long as their economic partnerships with the rest of the world remain rich and vibrant.
The OP article is just bs. Its a parallel universe they live in. The Rouble is still performing well, how is that?
The ruble is performing in Russia (however well or badly) on account of maneuvering in a Putin-created bubble that has absolutely no connection to international markets of finance.The OP article is just bs. Its a parallel universe they live in. The Rouble is still performing well, how is that?
to the boldedSanctions are largely symbolic and will not serve their purpose (compelling Russia to act differently) so long as their economic partnerships with the rest of the world remain rich and vibrant.
That, bolded by me, is easily one of the most stupid assessments I've read in quite a while.A new parallel space may be emerging in the world. A pole if you will; splitting the unipolar into a bipolar or multi polar world. S&P ruling is True in one universe, the one where the west reigns Supreme, but False outside that universe.
In other words S&P's jurisdiction is not global
Where the role of US-LNG is certainly not to be belittled (the US is currently most certainly the biggest exporter of LNG) the fall in the gas price is not solely due to this and probably not even crucially.Russia's got another problem: US-based LNG is arriving in quantities greater than Europe can consume, and prices are plunging, which is the exact opposite of what was feared. Ironically (or not), it might be the US that ends up with the energy price problem this winter, instead of Europe.
Wave of LNG tankers is overwhelming Europe in energy crisis and hitting natural gas prices
The buildup of LNG vessels waiting to unload in Europe is driving down the price of natural gas while sending LNG freight rates higher.www.cnbc.com
If this holds up, then Putin has lost another major point of leverage, which is why I think he's getting even more desperate. Putin's fantasy football team keeps losing.
just wait for February ))Sanctions are largely symbolic
Oleg Deripaska is a founder of EN+ (this company is a part of Rusal actually) and Deripaska still speaks fro the company EN+. for example, inm September 2022 he congratulated the En+ Group scholarship students and etc.Deripaska and RUSAL would be taking an enormous risk with nurturing secret business ties.
I don't believe either is so stupid.
Oleg Deripaska is a founder of EN+ (this company is a part of Rusal actually) and Deripaska still speaks fro the company EN+. for example, inm September 2022 he congratulated the En+ Group scholarship students and etc.
The IMF says the Russian economy will contract 3.4% in 2022. Far worse in 2023. Russia (Putin) has lost the European energy market, a huge and financially sound market.
Putin has actually done an excellent job with the economy.
And may I enquire on the state of the Ukrainian, UK and Polish economies?
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