1) New data on Russia's federal #budget in February is out. Some normalization after a high January deficit was expected, but the opposite happened. The deficit grew to 2.6 tn RUB, 1.7% of GDP after two months. Revenues in February 2023 were 1.8 tn RUB, expenditure 2.6 tn RUB.
2) Last year around this time, the Russian budget was firmly in positive territory. The January 2023 deficit was clearly not representative, but an additional deficit of 800 billion RUB in February shows it's not a one-off phenomenon.
3) On the revenue side, the problem for Russia's finance ministry are the very small oil and gas revenues. This will slightly improve in the coming months, as Russia will adopt a new formula to calculate taxes (based on a higher assumed oil price).
4) On the expenditures side, the war is forcing the government to pay upfront for weapons. This is supposed to lead to lower spending in December, but I believe that when I see it. Overall, it still looks like spending will be significantly higher than planned.
5) Important to take into account strong fluctuations month-to-month in Russia's budget, which happen for different reasons (seasonality, tax rules, one-off payments etc.). But based on today's data, Russia's government will need to borrow a lot more than planned for this year.
The newest sanctions on Russian energy are nothing less than a paradigm change: For the first time, the goal is to cut Russian export volumes. Before, the goal was to make oil exports less profitable for Russia, but to keep the volumes intact.
The US did not just target any export volume, but made sure to hit Russia's most profitable export routes the hardest: Oil from Russia's Pacific ports had a small discount and low shipping costs, making it much more profitable then exports from the Baltic/Black Sea to India.
It also makes a lot of sense to go after those tankers that are the most specialized and the hardest to replace.
Overall, the measures look well thought through and will reduce Russian revenues, both in the budget and in the trade balance.
Great text: Bitcoin is a fascinating Ponzi-like / pyramid scheme. More and more people jump on the bandwagon, hoping to profit. Early adopters get rich. Late adopters now hope that governments will create "reserves", i.e. join the Ponzi scheme, to keep the party going...
Bitcoin doesn't appear to be a Ponzi scheme - because there is no Ponzi! The system is decentralized. In the early years of Bitcoin, there was a lot of talk of possible use cases of Bitcoin. That has almost disappeared, now it is just the hope of the value going up up up.
Companies like Microstrategy have even managed to create small pyramids within the larger Bitcoin pyramid. It goes without saying that no government should ever participate in a pyramid scheme. It should never bail out gamblers with taxpayers' money.
A few notes on Sam Charap's latest article: Charap and I have a fundamentally different views of Russia, Putin's interests and goals, and the history of the war in Ukraine. I still like to check where exactly the disagreements materialize in the arguments and the conclusions.
It is not difficult to find interpretations in the text that I violently disagree with: For example: that the Istanbul negotiations were anywhere close to ending the war. The re-framing of the process as "almost successful" initally began in conspirational corners of the debate.
The point of the story was to blame the West for the war - esp. Biden and Johnson - and to portray Russia as willing to compromise. Since 2023, Putin has been promoting it. One member of the Ukrainian delegation also keeps confirming it (Chalyi), but his case is complicated.
I really recommend this new report on #Russia's economy from CASE Center. The authors argue that the economy is much more resilient than commonly assumed. The conclusions are a bit too fatalistic in my view, but it is definitely worth reading. case-center.org/wp-content/upl…
The authors explain why - in their view - a lot of the earlier predictions for Russia's economy have not come true. It is not just an analysis "in hindsight": Already in March 2022, Dmitry Nekrasov wrote a forecast for Russia's economy that turned out to be very accurate.
Keep in mind that, at the time, even the Russian Central Bank and the Russian government were expecting a huge crisis in the Russian economy. It was the mainstream perspective, and Nekrasov contradicted it: telegra.ph/Ob-apokaliptic…
More Russian voices push back against the idea of a ceasefire in Ukraine. Not surprisingly, Russia has zero interest in ending the war before it has defeated Ukraine. Apparently, ceasefires only existed in some Western dreams.
Similarly, Trenin says Russia is first and foremost interested in "the character of Ukraine's future regime and military potential". kommersant.ru/doc/7283219
Western idea of talks:
1.) ceasefire
2.) negotiations
Russian idea of talks:
1.) no more weapons for Ukraine
2.) negotiations
3.) ceasefire of Russia gets what it wants (regime change etc)
Es gibt keinerlei Anzeichen dafür, dass es in der Ukraine in absehbarer Zeit Frieden geben könnte. Dass hierzulande so viel darüber gesprochen wird, zeigt nur den Realitätsverlust und Anmaßung der deutschen Debatte. Wir können den Krieg nicht von oben "befrieden".
Wir können den Ausgang das Krieges nur durch unsere Ukraine-Unterstützung beeinflussen (und ein stückweit über Sanktionen). Wir können aber nichts dirigieren oder erzwingen, und auch der globale Süden wird uns nicht aushelfen (wollen oder können).
Für viele ist es wohl noch ungewohnt, dass wir nicht die Macht und Mittel besitzen, einen Krieg mitten in Europa einfach zu "befrieden". Dass wir nicht bestimmen können, wie und wann er endet, dass wir keine übermächtigen Schiedsrichter mehr sind. Aber das ist die neue Realität.