Geopolitical impact/outflow if Ukraine Defaults

[cyppok]

CM makes decision to increase number of Gryphon and Berkut in six times

27.01.2014 | 17:24
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A number of special subdivisions of Gryphon and Berkut will be increased up to 30 thousand people and powers of special subdivisions of the Interior Ministry will be expanded, ZN.UA with reference to their sources reports.

In according to data of a source in the government, irrespective of making decision on introducing of a state of emergency, at its closed sitting the Cabinet of Ministers made a range of protocol decisions, among which are the following – on increasing of a number of Gryphon and Berkut, and expanding of powers of special subdivisions of the Interior Ministry.

2k left in Kiev on Maidan think I am wrong still?

Zaporozhye Svoboda leader is arrested along with about fifty people.

Interior Troops mop up Sumska OSA : UNIAN news
Like I said taking a building is nothing it goes back and forth, but winning the hearts and minds of the general population is another thing. When those ultras(ultra-nationalists) went through Kiev screaming slogans about everyone whom thinks differently being a traitor and once they come to power they will start hanging traitors, people took notice.

Its almost over my interest is in what happens next. If you were in power you could sort of leverage the retaliation to go too far in various direction and in some sense it seems very eerie right now that gov't is doing an assessment which way to go.

[Skywatcher]

Of course, because suddenly expanding the Berkut personnel size several fold will magically guarantee an increase in effectiveness.

[MrSecond]

Tomorrow the summit EU-Russia is appointed. European officials wait for Putin to talk to him about Ukraine.
Highly unlikely anything tough may happen in Ukraine until they have done the talk.
But after that authorities may start cleaning of Maidan. I presume day "X" maybe Thursday.

[Minskaya]

Prime Minister Mykola Azarov (Yanukovych's #2) has resigned ahead of an extraordinary Rada session scheduled for today. This session will profoundly influence the future of Ukraine.

The BBC reports from my hometown...

[Minskaya]

No word yet if Yanukovych will accept the resignation of Azarov. By law, the resignation is not valid unless accepted by the president. Under the constitution, the departure of the prime minister means the resignation of the entire government within 60 days. If Yanukovych does accept the resignation, the speculation is that Petro Poroshenko (independent former PM and oligarch) will be asked to accept the PM position and form a new caretaker government.

The latest word from Kyiv is that parliament has repealed the repressive laws of Black Thursday. Three hundred and sixty one lawmakers voted to strike the laws off the books with only two against and Communist Party lawmakers abstaining.

[Minskaya]

My sources are correct...

BBC News - Ukraine crisis: Parliament abolishes anti-protest law

[cyppok]

My sources are correct...

BBC News - Ukraine crisis: Parliament abolishes anti-protest law

a good thing in my view.

But hryvna is ~8.50 ish
Новости Украины и мира. Смотреть новости 2014 онлайн | РБК-Украина
Budget deficit up by only ~20%. (sarcasm)

Btw the central bank intervened to bring Hryvna to 8.40 on the interbank. That probably ate up some reserves. So the cumulative differential between forex reserves and flows of incoming vs outgoing is becoming smaller and smaller, yet the budget deficit grew. Timeline just got shorter basically.
All of those mps both gov't and opposition know this all of them.

[cyppok]

On one hand, he told press: "Regarding your question whether we will review our agreements on loans and the energy sector if the opposition will take power ... No, we will not.”

But on the other hand, he noted that the package, which is implemented in quarterly tranches, is tied to an agreement made by Ukraine’s outgoing Prime Minister Mykola Azarov. “We had an agreement with Azarov … At this point, since no one knows what the future government in Ukraine will be, no one can say what its economic plans will be,” Putin added.

EUobserver / Putin remarks at EU summit raise concern on Ukraine economy

Agreements have to be followed... by both parties. If you promised me a car for 10 grand and I give you part of the money and you give me no car should I continue paying? I think not.

So we get back to bankruptcy distribution of pain.

The biggest pain centers are devaluation of the currency.
Like I said before my guess is that hryvna will collapse entirely perhaps 1 to 1 to the ruble.
A lot of people are still dollarized because of prior devaluations and those that aren't may become rublerized simply because that is also an alternative.

Working capital will probably be annihilated for quiet a few small, medium, and big enterprises that aren't prepared for this.

Asset prices will collapse HOWEVER... foreign(eu) banks will not be able to liquidate/take them. Why, well there was a loan secured by a hotel a while ago that wasn't being paid and the bank tried to seize the property to pay it off, since the people whom owned the property were connected the loan got thrown out and the bank wound up with nothing. Essentially that claim became worthless because 1) it wasn't honored 2) it wasn't enforceable 3) it became null and void after going through gov't channels. The loan was deemed improper basically. This relates to both ends of the political spectrum and lower level bureaucrats.

They might still survive if privatization brings in enough money to last through the year.

The ultimate question is not in rolling the debt but in stabilizing the budget deficit.
It is actually a very simple thing to get rid of the overhang of default.
If they simply spend in-line with what they get in revenues there would be no risk this goes for all gov'ts really.

This below was a mistake because it limits compromise.
Ukraine government officials barred from Canada| Ukrinform

Lenta.ru:
Crimea wants to be independent. lol

[cyppok]

Expectations for February.

We may see 9 UAH to the dollar this month.
I think another tranche from Russia is in mid-Feb.

My sense is there is a very tight payback period basically from Russia--->Ukraine--->IMF/Wbank
in some sense the amount of leverage Russia has by this is very large. Especially if you could simply withhold funds and force Ukraine into bankruptcy, which the IMF and WorldBank would have done far earlier btw. You can pretend Russia is evil but they simply extended loans to get leverage which the EU/IMF/Wbank already had by not rolling Ukraine's debt over.

GRA Repurchase (SBA) January 30, 2014 265,625,000
GRA Repurchase (SBA) January 30, 2014 156,250,000
Net SDR Charges February 01, 2014 368,904
GRA Charges February 01, 2014 9,539,959
GRA Repurchase (SBA) February 12, 2014 234,375,000
GRA Repurchase (SBA) March 27, 2014 125,000,000
GRA Repurchase (SBA) April 30, 2014 156,250,000
SDR Assessments April 30, 2014 7,370
GRA Repurchase (SBA) April 30, 2014 265,625,000

None of this is necessary from below story. Too much ideology too little substance below but gives some sense of shadow play between different actors.
Martin Armstrong Warns Ukraine Is Doomed After The Elections | Zero Hedge

last but not least...
Ukranian News - "Quentin, what the f... fake!" - Interior Ministry: Abduction Of Automaidan Leader Bulatov May Have Been Staged

"Quentin, what the f... fake!" - Interior Ministry: Abduction Of Automaidan Leader Bulatov May Have Been Staged (16:17, Friday, January 31, 2014)

The Interior Affairs Ministry is considering the possibility that the abduction of Dmytro Bulatov, the leader of anti-government motorist movement (Automaidan), was staged, Oleh Tatarov, the head of the Interior Affairs Ministry's investigations department, announced at a press conference.

"It may have been staged with the aim of committing a provocation to trigger a negative response in the society," he said.

In addition, Tatarov stressed that the possibility that Bulatov was kidnapped for money and other possibilities were also being considered.

In addition, the ministry expressed regret that friends and relatives of Bulatov were not cooperating with investigators.

Tatarov considers it a very suspicious coincidence that Bulatov himself and his car were found on the same day.

At the same time, according to Tatarov, investigators asked a court for permission to obtain records of Bulatov's telephone conversations on the first day of his disappearance.

Investigators sent requests to the mass media for video materials, as well as requests to all the organizations that could provide videos capturing the kidnapping of Bulatov.

In addition, Tatarov said that law enforcement officials had not yet considered possible involvement of members of the Oplot fight club (Kharkiv) in the abduction of the activist, but they intend to consider it in the near future, given media reports.

As Ukrainian News earlier reported, Bulatov went missing on January 22 and was found beaten in the Kyiv region in the evening on January 30.

The activist himself claimed that unidentified people kidnapped him, tortured him cruelly, and cut off his ear.

Police also found Bulatov's car in the Dniprovskyi district of Kyiv in the evening on January 30.

[Minskaya]

last but not least...

Reminds me of a Soviet justification campaign before a 'show trial'. Neither illuminating nor professional.

[Skywatcher]

Reminds me of a Soviet justification campaign before a 'show trial'. Neither illuminating nor professional.

Well, what would you expect from an alleged economic professional who buys Gordon Chang rumormongering at face value?

[cyppok]

Well, what would you expect from an alleged economic professional who buys Gordon Chang rumormongering at face value?

We all have our venues and thought patterns.

I very much enjoy being the devil's advocate because sometimes things are far different than what people are led to believe they are, even truth should be questioned for the sake of being honest with yourself and your doubts.

Yuschenko had PR toxification induced victory through people being led to believe that he was fighting for freedom. What he really fought for was just to become looter in charge just like Yankovich is now. To pretend that the poisoning didn't sway voters in that presidential campaign is to be ignorant of reality.

Assuming there is a PR stunt with automaidan to boost up the waning public interest in the power struggles between rival oligarchic factions whom are backed by exogenous interests etc...

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You sound like nobody makes mistakes and it wasn't a valid publication, I assumed Forbes checked out the back-story in there, it does not make much of difference because the trust issues remain in China's financial system, so far they have been able to cover them up and bailout small rollovers of debt but sooner or later reality hits the wall.
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EU will discuss sanctions Feb 10th.????? ?????? ????? ?? ?????????? ???????? ??????? ? ????????? ??????? - ????? ????? ????????? ?? ????????? ?????? - LB.ua
This is kind of funny to me at least, and may usher in what I mentioned in the start of the thread.

Basically the EU will discuss sanctions on Feb 10th against Ukraine. Now look at it from a point of view of bargaining and leverage. Trade wise Ukraine is more profitable for the EU than vice-versa, the low input commodities are world traded so sanctioning those would simply shift the transit points since there would simply be an intermediary port that would re-stamp origin for profit. If those sanctions happen even on a low level that is simply political there is an incentive to retaliate. At that point Ukraine will have nothing to loose because expecting money from IMF/EU etc... would be unrealistic due to sanctions.

Two aspects follow, Russia becomes the only source of funds that is not politically closed and retaliation would become profitable from a political point of view for the party in charge, because it would damage the income base of oligarchs of the opposition.

[Skywatcher]

We all have our venues and thought patterns.

I very much enjoy being the devil's advocate because sometimes things are far different than what people are led to believe they are, even truth should be questioned for the sake of being honest with yourself and your doubts.

There's a world of difference between questioning one's (and others') assumptions, and repeating tabloid fodder as Gospel truth.

[cyppok]

There's a world of difference between questioning one's (and others') assumptions, and repeating tabloid fodder as Gospel truth.

don't read what I post then. very simple fix for you, no need to thank me.

[Skywatcher]

don't read what I post then. very simple fix for you, no need to thank me.

But think of the comedy value! I just can't leave low hanging fruit alone, sorry.