I stopped 8 wars

By John Deering 

My turn!

 by Pat Bagley

I've got a plan

 By Patrick Blower

Your son was a loser

By Michael de Adder, with reference to the film, Saving Private Ryan.

Snubbed

By Bill Bramhall 

The known soldier

 By Rob Rogers

Russia's economic crisis

 A video by Anders Puck Nielsen

Russian economy starts to spin out of control

 I  (and Bloomberg and Trading Economics) can no longer find the MOEX stock exchange index for Russia, or the yield on Russian bonds.  Trading Economics makes an estimate of the index value, but warns it might not be 100% accurate.   An absence of information is invariably a bad sign.  People are happy to share good news, not so much bad news.

Meanwhile, inflation is picking up.  (The central bank of Russia's inflation target is 4%.)

The 2014 inflation was caused by a collapse in the oil price, leading to a plunge in the rouble.  The 2020 spike was of course caused by the invasion of Ukraine, once again leading to a collapse in the rouble.  Given the loss of life and overall casualties among young men, now estimated at over 500,000, and the tightness of the labour market  (real wages are still rising fast--one way Putin is buying off his population), the only surprise is that inflation isn't higher.

Insiders are selling the share market (foreigners can no longer buy or sell Russian shares because of exchange control and American sanctions), while bond yields were trending sharply higher (until the data were no longer available), usually an indication of worsening problems.

The rouble has strengthened moderately from its lows, which seems unsustainable given the inflation build up.  If oil and gas prices start to fall, as happened in 2014, the wheels will come off. 

I don't know whether oil and gas prices will plunge in the short term, but the medium-term future is surely very bleak, given the global growth of EVs.  And the short-term may be no better.  There was no major economic event that caused the 2014 oil price plunge, just a moderate decline in global economic activity.  Given the impending Chinese recession/slowdown, and sluggish recoveries in Europe and the US (?), a near-term plunge in the oil price, comparable to 2014, is surely at least possible.

Note log scale

Note log scale

Different perspectives on protest and Palestine

 A cartoon by Fiona Katauskas.

Dominos

By André-Philippe Côté, a Canadian cartoonist.

Precious metals rising as risk increases

Precious metals (gold, silver, platinum and palladium)  are used to make things, like other commodities, but they are also stores of value.  During crises, the prices of precious metals rise.

In the chart below, you can see the index for the average of precious metals prices, daily since 2000.  Note how the index falls during recessions, and rises during recoveries  (the 2001 recession, the 2008 GFC, the slowdown in 2016 before the Trump tax cut sugar-hit sparked a recovery, ended by the covid crash.)

Click on chart to see clearer image 

However, shorter term, you can clearly see how other factors than demand have impacted prices.  The covid plunge (early 2020) is obvious, the rebound in response to massive fiscal and monetary stimulus is clear, up until H1 2021.  Then the index falls as interest rates are raised, followed by a spike in response to Russia's invasion of Ukraine.  Notice how over the last couple of months, the index has been rising, as concerns about the safety of the global banking system grow.   Other commodity prices are declining on average, as the world economy slows, yet precious metals, which in the longer run tend to follow the broader economic cycle, are rising. 

Click on chart to see clearer image.

Xi's mission to Moscow

 From a toot by Bad-i-ucao

For the World Peace —— Xi‘s Moscow visit for Putin

#XiJinping
#UkraineRussianWar
#Ukraine️

Russian business confidence plunges

 Up till now, Russian economic data (at least those that the government continues to publish) have held up quite well.  This has led some commentators to conclude that the government is fudging the stats, which is entirely possible.   Business confidence (seasonally adjusted) plunged in February 2022 when Russia invaded Ukraine, then rallied, but has fallen again this year as the oil price cap and plunging gas sales have started to bite, which is at least consistent with the probable path of the economy.  The government has stimulated the economy with fiscal measures as well as cutting interest rates, and the imposition of tight exchange controls and the prohibition of foreigners selling Russian property and shares have all held the economy up, so that the year-on-year fall in GDP in Q3 was "only" 3.7%.   

Oil and gas revenues fell 40% year-on-year in January:

Russia’s revenues from oil and gas exports dropped by nearly 40% in January as price caps and Western sanctions squeezed the proceeds from Moscow’s most lucrative export, the International Energy Agency said on Tuesday.

Russia’s oil and gas export revenues were $18.5 billion in January, 38% lower than the $30 billion Moscow received in January 2022, a month before its invasion of Ukraine, according to IEA numbers shared with Reuters.

IEA Executive Director Fatih Birol said Western measures targeting Russian energy exports had achieved their aims of stabilising oil markets and reducing Moscow’s revenues from oil and gas exports.

“Our expectation is that this oil and gas revenue decline will be steeper in the next months to come. And even more steep in the mid-term, as a result of the lack of access to technology and investment,” Birol told Reuters.

International restrictions imposed on Russia in response to the Ukraine war, including a $60 a barrel crude price cap imposed by Group of Seven countries, have left Russia’s Urals blend being sold at a heavy discount to Brent.

The 27-country European Union also banned Russian seaborne oil imports from December, and has placed sanctions on exports to Russia of technologies needed for oil refining. The United States and Britain have also imposed restrictions on Russian oil imports.

[Read more here]

Only 7% of Europe's oil now comes from Russia.  Building new pipelines, to sell gas into other markets, is possible, but will take years.  And oil and gas make up most of Russia's exports (the government has stopped publishing these data, but we know what is happening from data covering imports from Russia by other countries).  

I think Russian economic data will start to deteriorate from now on.  That's if they continue to be published.  

The EU now gets more gas from the US than Russia

 

Russia *chose* to confront the West

 From a tweet by Olexander Scherba, former Ukrainian ambassador to Austria.

Kill more children

 By  David Horsey

Russia's PMI still holding up.

Russia's PMI fell at the start of its war against Ukraine, but then rebounded.  Business confidence fell, but didn't rebound.  

Putin increased pensions by 10%; imposed exchange control; and at first, the prices of its main exports, oil and gas (80% of total), rose as it shut down supply.  The problem is that the surge in oil/gas prices has plunged Europe into recession.  In the USA, the sharp jump in inflation (partly due to the rise in oil and gas prices) has led to the Fed upping the Fed Funds rate, which together will likely push the US into deep recession.  Out of the "Big 8" economies, only India has so far been holding up.  

So a world recession is likely.  As the recession deepens, fossil fuel prices will fall.  The surge in these prices has also begun an accelerated shift towards renewable energy in Europe.  Thus, short-term and long-term, Russia's export revenues will slump.  In the meantime, Western sanctions are biting ever deeper, leading to declining production, and the military call-up must also be affecting output.

I believe that the Russian economy will start to slide soon, with GDP going deeply negative.  We'll see.

UK and Europe PMIs plunge

 Another set of "flash" PMIs for October.  And they plunged.

This is before the winter fuel crunch, before the full impact of plunging real incomes because of surging inflation, before the impact of rising interest rates.  And in the UK, before the dreadful impact of a demented budget on mortgage rates, the Pound, inflation, confidence.  Last gasp of the unhinged neoliberal cult, the quite dotty belief in "trickle down"?  Let's hope so.  

Will this break Europe's resolve to maintain sanctions on Russia?  Oil and gas prices are already falling, so the actual European and impending global recessions are going to do just as much damage to Russia.   My guess is that the Russian economy is about to fall much faster than Europe's, the UK's or the rest of the world's.  Patience, mes vieux!  Expect insincere Russian "peace" overtures soon. 

Medals

By Matt Wuerker 

Russia's new export

By Christopher Weyant