The State of Affairs in Russia

[Martinus]

Gazprom just announced 15%-25% redundancies.

[Valmy]

Wow.

Is this a reflection on the actual power of economic sanctions, or was the Russian economy totally fucked up absent sanctions anyway?

AFAIK it was the plumetting oil price that did them in.

Just like the 1980s.  It is just fucking amazing that after low oil prices destroyed their empire the Russians saw no reason to stop depending entirely on oil and gas.  I mean how fucking stupid can you be?  They had decades to use the high oil prices to retool their economy and instead they just used it for corruption and power shit.

[CountDeMoney]

Russian central bank says it expects to use $85B to shore up the ruble in 2015, so it'll only be partially shitty than it is now.

[DGuller]

The rouble has lost almost 50% against the US dollar this year as falling oil prices and Western sanctions continue to weigh on the country's economy.

Before the move, the dollar bought 67 roubles. The rate rise moved it up to 58 against the dollar, although it has since slipped back to 62.

Crossed the line of 76 one hour ago. 

Damn, those are not trading losses anymore, that's a collapse. 

[Barrister]

Wow.

Is this a reflection on the actual power of economic sanctions, or was the Russian economy totally fucked up absent sanctions anyway?

AFAIK it was the plumetting oil price that did them in.

Just like the 1980s.  It is just fucking amazing that after low oil prices destroyed their empire the Russians saw no reason to stop depending entirely on oil and gas.  I mean how fucking stupid can you be?  They had decades to use the high oil prices to retool their economy and instead they just used it for corruption and power shit.

It's not just the Russians who did so...

[DGuller]

Wow.

Is this a reflection on the actual power of economic sanctions, or was the Russian economy totally fucked up absent sanctions anyway?

The answer is probably an interdependent combination of both and more.  The oil price delivered the strongest blow, but the sanctions made many Russians with significant wealth to realize that keeping that wealth in Russia would be idiotic.  Both these events together reinforced the loss of confidence of the strength that is not imaginable to Americans.  These two things together then lead to the next, IMO, significant factor:  Putin losing the plot on economics, and sidelining and/or maligning the professional economists in favor of the KGB faction.

[The Brain]

Wow.

Is this a reflection on the actual power of economic sanctions, or was the Russian economy totally fucked up absent sanctions anyway?

AFAIK it was the plumetting oil price that did them in.

Just like the 1980s.  It is just fucking amazing that after low oil prices destroyed their empire the Russians saw no reason to stop depending entirely on oil and gas.  I mean how fucking stupid can you be?  They had decades to use the high oil prices to retool their economy and instead they just used it for corruption and power shit.

It's not just the Russians who did so...

Yeah the power shit is a Languish fixture.

[Duque de Bragança]

Gazprom just announced 15%-25% redundancies.

Is Schröder fired?

[Razgovory]

Russian central bank says it expects to use $85B to shore up the ruble in 2015, so it'll only be partially shitty than it is now.

They spent 90B this year.  This crisis seems worse then then the one in 1998.

[Jacob]

Wow.

Is this a reflection on the actual power of economic sanctions, or was the Russian economy totally fucked up absent sanctions anyway?

AFAIK it was the plumetting oil price that did them in.

From what I read the damage is about  5:2 oil:sanctions - so while oil is the prime driver, the sanctions are piling it on.

[CountDeMoney]

From what I read the damage is about  5:2 oil:sanctions - so while oil is the prime driver, the sanctions are piling it on.

With the added bonus that, while oil could bounce back, the damage from the sanctions will steadily increase over time.

[Admiral Yi]

From what I read the damage is about  5:2 oil:sanctions - so while oil is the prime driver, the sanctions are piling it on.

My personal feeling is it's more weighted towards oil than that.

[Jacob]

From what I read the damage is about  5:2 oil:sanctions - so while oil is the prime driver, the sanctions are piling it on.

My personal feeling is it's more weighted towards oil than that.

I think I mentioned it in this thread earlier - the Russian Finance or Foreign minister (can't recall which) was saying that they estimated the cost to the Russian economy from the drop in oil prices was at about $100B, while the sanctions came in at $40B.

That was maybe about a month ago, and an official Russian statement, so take it for what it's worth.

Do you think the damage from the oil drop is higher than that, or do you think the sanction damages are overstated?

[Admiral Yi]

I think I mentioned it in this thread earlier - the Russian Finance or Foreign minister (can't recall which) was saying that they estimated the cost to the Russian economy from the drop in oil prices was at about $100B, while the sanctions came in at $40B.

That was maybe about a month ago, and an official Russian statement, so take it for what it's worth.

Do you think the damage from the oil drop is higher than that, or do you think the sanction damages are overstated?

The price has declined a lot since then, and that overlooks the fact that oil revenue generates a great deal of the Russian government budget.

[Berkut]

I suspect that the damage from sanctions isn't really additive, but rather multiplicative. IE, absent the oil drop, sanctions would not be nearly as painful, and absent sanctions, the ability to handle the oil drop might be more robust.

I am just speculating of course. But I suspect the sanction restrictions make maneuvering to deal with the oil drop impacts much more difficult.