Tuesday, December 16, 2014

Russian Ruble Collapse; Russian Central Bank Intervenes; Russia in Chaos

The chart shows the parabolic jump in the Russian Ruble currency pair to near 80 this morning reflecting the collapsing ruble. Note the points in the chart where intervention occurs by the Russian Central Bank, but fails.

At 10 PM EST Monday evening in the States, the Russian Ruble recovers to 60 after the Russian central bank raises the key rate to 17.0%.

At 4 AM EST today, Tuesday, 12/16/14, the Russian Ruble restarts its collapse to 65.88 the rate hike to 17.0% has no affect. The currency pair is weakening in real-time to 65.91, 65.94 and moving towards 66 and higher. Russia has intervened with about $80 billion in reserves that has had no impact in stabilizing the ruble and about $400 billion in reserves remain available. The ruble is a “petro-currency” so as oil weakens the Russian economy weakens. Confidence is lost in Putin as he shows favoritism to wealthy crony buddies such as Rosneft executives placing their needs ahead of addressing the currency collapse. The central bank is not independent and instead exposed as a puppet institution performing Putin’s bidding. Russia will become increasingly isolated in the global community.

Capital controls will have to be implemented and the Russian central bank must intervene more forcibly to stabilize the ruble. Will the Russian people remain sanguine as the turmoil escalates? Dollar hoarding is occurring as Russians rush to change rubles to dollars. The complete failure in the ruble after the big rate hike to 17.0% overnight is very scary and creating concern around the world. Lower oil prices and the Russia credibility crisis will continue to weaken the ruble.

The Russian foreign minister exhibits bravado saying that oil output will remain at current levels and energy projects will continue unaffected by the drop in oil prices.

The oil collapse continues with WTIC crude down to 54.22 and Brent oil loses the 60 level for the first time in five years at 59.18.

At 5:45 AM, the Russian Ruble currency pair moves above 66 to 66.08. The Russian Micex Index is down -1.3%. Rosneft tumbles -8%. 

At 6 AM, Russian Ruble is 68.986 in complete collapse. The Russian people are forming lines at banks trying to exchange rubles for dollars. Russia is descending into a full-blown currency crisis. Russia will slide deeper into recession in 2015.

Wow! The Russian Ruble hits 70 for the first time on record; this is serious. Russians will begin panicking. Inflation will run rampant. Putin is likely shell shocked on the speed of the ruble collapse and will have to address the country. This is epic Forex and global market action occurring in real-time.

At 6:26 AM EST, Russia announces that Putin will address the country shortly. The Russian Ruble is plummeting to 71.296, then 71.3853, then 71.4778; these moves are occurring in seconds not minutes or hours. The Russian central bank has lost control.

At 6:29 AM, the Russian Ruble is 72.5130; the collapse is stunning. Russia’s economy will be toast for the next decade. WTIC crude oil 54.46. Brent crude oil 59.30.

At 6:32 AM, Russian Ruble 73.1037.

At 6:33 AM, Russian Ruble 73.6625.

At 6:55 AM, Russian Ruble is 74.2724 printing a 74-handle. The market machinations this morning are reminiscent of the Asian contagion problems in the late 1990’s.

At 7 AM Russian Ruble blows through 75 at 75. 3615. The ruble is in free fall and US futures are collapsing.

At 7:03 AM, Russian Ruble 75.5062. US 10-year yield 2.03% only three ticks from losing the 2% handle.

At 7:04 AM, Russian Ruble 75.9028. Russia’s rate hike to 17% is a complete failure. The Russian people are panicking as they see their savings evaporate. Bank runs are increasing.

At 7:04 AM, Russian Ruble 76.8290; this is spectacular and disturbing to watch in real-time; epic Forex action. The US 10-year yield prints a 2.00% handle. Global traders pace back and forth astounded at the ruble collapse.

At 7:10 AM, Russian Ruble 77.4167. Putin must think he is living a nightmare. A press conference is planned for today but the ruble is collapsing at such a fast rate that you cannot apply bench marks; Putin may talk today as the ruble collapses on a screen behind him.

Boom! The ruble implodes to 79.1246. Russia is in a full-blown currency crisis. Gold jumps 20 higher to 1220

At 7:15 AM, the Russian Ruble currency pair was at 60 nine hours ago at 10 PM EST Monday evening. The ruble collapses with the Russian Ruble at 66 only three hours ago at 4 AM EST. The Russian Ruble is now above 79 an unprecedented -31% collapse.

At 7:20 AM, S&P -13. Dow -92. Nasdaq -32. Russian Ruble 77.1167. The Russian central bank is stepping in to stop the ruble collapse. The Euro/Ruble runs at 100 and quickly reverses verifying that the Russian central bank is intervening.

At 7:40 AM, the Russian central bank intervenes sending the Russian Ruble to 73.205 then 72.80 attempting to stop the ruble collapse.

At 8 AM, Russian Ruble 72.905 so the central bank is definitely intervening. The high print is 79.66 almost hitting 80 and drops to 73-ish reflecting a strengthening ruble as the central bank steps in. Brent oil loses the 59 level to 58.86.

At 8:22 AM, a Russian central bank official says the “ruble situation is critical” and the central bank “will take further measures.” This is the central bank trying to stabilize the ruble using lip service trying to instill confidence that the currency is properly supported.

At 8:27 AM, the Russian Ruble is 73.0213 so the central bank is obviously targeting the 73 as a stabilization level.

At 8:48 AM, the Russian Ruble 72.548.

President Putin will be speaking today. Watch the Russian Ruble 73 level. If this level is maintained or lower the central bank is having success at stabilizing the collapsing ruble. If the currency pair starts higher again to 74, 75, 76, etc..., Katy bar the door.

This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Chart was provided by Bloomberg and annotated by Keystone.

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