This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Russian Ruble Expected to Bounce Back in Short Term

Siluanov appears to be a voice of reason in the Kremlin, but it's too bad he has little political power. As for his predecessor and stanch fiscal hawk Alexei Kudrin, we very much doubt he will play any significant role in the "new" administration, despite Putin's encouraging words recently. Our best guess is that he will wait in the sidelines until something resembling a consolidated opposition is able to form.

We therefore agree with the assessment by Fitch ratings as it has threatened to cut Russia's long-term ratings on the basis of the deteriorating fiscal accounts and growing dependency on oil. Russia is a classic case of high tides hiding the rocks (and those who are swimming naked). Still, our own sovereign ratings model shows Russia as a solid BBB+ credit, and so downgrade risk to Fitch's BBB rating does not appear elevated right now. If we experience a sharp decline in oil prices, however, Russia will be materially affected.

The Elections

Aside from the usual evidence of carousel voting and ballot stuffing, it appears as if this time observers and the opposition members may be able to statistically prove that fraud occurred beyond a reasonable doubt. This may be possible because observers gotten hold of the protocols containing the results from individual voting stations.

They are now busy matching these protocols with the results provided by the central election officials. Nevertheless, some early estimates by locals also suggest that, corruption aside, Putin would still win the election -- albeit by a much narrower margin than the 64% of votes he received.

As his victory speech made clear, Putin's conciliatory gestures towards the disgruntled segments of Russia will be economic, not political. The escalation in the crackdown towards protestors over the last few days resulted in hundreds of arrests. We assume the domestic upheaval will quiet down soon, but there is no doubt that the process of regime change is in motion, though it will take years still before we see the political results -- but the economic results may become visible far sooner. While Putin has already signalled willingness to stand again for a fourth term, there are many that doubt he can last his next 6-year term. Much will depend on the economy and the oil tides.
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $112.12 0.00%
FB $93.24 0.00%
GOOG $643.61 0.00%
TSLA $220.69 0.00%
YHOO $32.52 0.00%


Chart of I:DJI
DOW 17,084.49 +33.74 0.20%
S&P 500 2,014.89 +15.91 0.80%
NASDAQ 4,830.47 +19.6820 0.41%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs