Here's a thought experiment:
What would you make of the Deputy Prime Minister of a large country that insisted that, compared to the rest of the world, centralized regulation like price or production caps would be difficult to impose in his country because of the independent nature of the country's legal system and the sanctity of property rights? Sounds reasonable, no?
Then what if I told you that the CEO of the same country's privately-held and largest energy conglomerate was arrested on almost certainly politically motivated fraud and tax evasion charges? That he was sentenced to nine years in prison and a controlling interest in the firm was then transferred to a successor? And if that that successor was forced to flee to Israel to avoid similar charges? And if I pointed out that what followed was a mass exodus of the entire Board of Directors and most of the executive corps to foreign shores to avoid arrest and prosecution? If I then told you similar stories about the larger media and banking interests in said country, you might find our Deputy Prime Minister's claims a bit fantastic, no? Consider:
"It would be irresponsible for Russia to join OPEC because we can't directly regulate the activity of our companies," he said, as nearly all are privately owned.Yet, he supports "coordinating actions" with the cartel because of the shared interest in lifting prices. He said Moscow isn't in a position to mandate lower production, but Russian oil companies will curb output this year as falling prices cut into their ability to produce.
He figured that if oil slides back under $40 a barrel, Russian output this year could fall twice the amount the government now forecasts, or about 300,000 barrels a day.
Oh, and apparently:
"In Post-Soviet Russia, falling price reduces demand."
Moscow Warns on Low Oil Prices [The Wall Street Journal]
Posted by guest , Mar 31, 2009 2:27PM
can someone translate this post into english please?
Posted by american bandersnatch , Mar 31, 2009 2:27PM
Isn't he saying faliing prices reduce output? Seems logical to me.
Posted by guest , Mar 31, 2009 2:27PM
can someone translate this post into english please? the string of hypotheticals was way to long for me to follow
Posted by guest , Mar 31, 2009 2:27PM
can someone translate this post into english please? the string of hypotheticals was way too long for me to follow
Posted by guest , Mar 31, 2009 2:33PM
In Soviet Russia output curbs you
Posted by guest , Mar 31, 2009 2:36PM
Speaking of London...
Does anyone know what's happening with G-20? Is London's financial district on fire yet?
I want to know. TGFD's been playing with matches lately, and London keeps coming to mind.
The Guy from Delaware
Posted by shiphouse , Mar 31, 2009 2:37PM
At 3/4:
The point of the post is rather simple, Russians are claiming that they cannot control what their companies do or put restrictions on them as they are handcuffed by the letter of the law. However, this could not be more hypocritical as the Russian Government if they want something or do not like you will show up at your door unannounced, take over your business, confiscate all of your assets, and throw you in jail or if you’re lucky just throw you out of the country.
So to say that they cannot guarantee that they can adhere to a framework such as OPEC or stay in line with output cuts is simply laughable. They are the Russian Government, they do what they want.
Posted by guest , Mar 31, 2009 2:47PM
@6 - the beefed up bank security in London is to keep the bankers from getting to the soap dodgers.
Oh how fondly do we remember 1999, running battles up and down London Wall.
Posted by guest , Mar 31, 2009 2:55PM
@7 fucking moron
Posted by guest , Mar 31, 2009 3:09PM
Falling prices is a result of lower demand, which the article seems to correctly portray. Falling prices mean that supply output drops which should rebalance the price to an effecient level.
Posted by Anal_yst , Mar 31, 2009 3:11PM
@9
Please, enlighten us all as to how you've reached that conclusion?
Posted by guest , Mar 31, 2009 3:15PM
The goon standing to the left in the above photo is holding his diploma from Russia's National Peacekeeping Institute.
Rolled-up inside that diploma is the blackjack he uses with relish as he goes about his peacekeeping duties.
Peacekeeping is the Russian word for crowd abatement.
The Guy from Delaware
Posted by shiphouse , Mar 31, 2009 3:24PM
@7 Your right I am a fucking moron. I guess I should have just said Mikhail Khodorkovsky or Yukos and they would have got it.
Suka
Posted by guest , Mar 31, 2009 3:34PM
9 = Putin
Posted by Novice , Mar 31, 2009 3:36PM
9 = Putin = Sukha
Posted by guest , Mar 31, 2009 3:45PM
Putin = http://en.wikipedia.org/wiki/Sukha ?
Posted by Novice , Mar 31, 2009 3:49PM
Isn't he?
Posted by guest , Mar 31, 2009 5:04PM
London is still around. Little threat on boe but that is all