North Korea’s Kim Jong-Un Set To Visit Russia May 9, 2015, During Celebrations For Anniversary Of Soviet Victory Over Germany In WWII; Putin Needs An ‘Economic Miracle,’ Former U.K. Amb. To Russia Says
North Korean leader Kim Jong-Un, will attend “Russia’s celebrations May 9, 2015,, marking the Soviet victory over Germany in WWII,” South Korea’s Yonhap News Agency said. “The trip, if it takes place, will be the first foreign visit for Un, since he ascended to power in 2011; and, is likely to come before visits Chia,” the paper added. “About 20 state leaders have confirmed their attendance, and the North Korean leader is among them,” Yonhap quoted the Office of the Kremlin Spokesman as saying — in response to its written question to Vladimir Putin’s spokesman, Dmitry Peskov. Pyongyang has been looking to boost ties, as political relations with China chilled, after Un defied China’s urge not to conduct a third nuclear weapons test in 2013.
Russia Needs An ‘Economic Miracle;’ Falling Oil Prices Could Lead To 20 Percent Of Russian Banks To Fail In Next 6-12 Months — ‘Run On Banks,’ Not Out Of Realm Of Possibility
It will be interesting to see how this plays out. May is a ‘long way’ from here, and so much could happen in Ukraine and Russia’s banking industry before this event. With oil prices in the mid $40s, and events in Ukraine appearing to deteriorate, the situation in Moscow is full of high anxiety — to say the least. If young Mr. Kim is looking for a Russian ‘handout,’ he isn’t likely to get it. “Threatened by POTUS Obama, reprimanded by NATO, and Russia’s debt downgraded by the rating’s agency — Standard and Poor’s: Russian President Vladimir Putin needs a “miracle” to turn around the country’s economy,” said a former U.K. Ambassador to Russia. “He [Putin], fears to appear weak. He’s actually presented himself with an insoluble problem,” said Andrew Wood, the former U.K. Ambassador to Russia said to CNBC during an interview yesterday.
Catherine Boyle, writing on CNBC’s website today (Wed., Jan. 28, 2015), writes that “Russia announced plans Wednesday to bolster lending to the real economy; and, create a “bad bank,” echo some of the post-credit crisis action of Western governments,” in the aftermath of the 2008 Great Recession. “But,” Ms. Boyle adds, “concerns are already voiced that the measures are already — too little, — too late.” “Wednesday’s measures include 300B rubles from The National Wealth Fund, the country’s sovereign wealth fund, to state development bank, VEB — to help encourage lending to businesses and a 1T rubles boost to the banking sector, via the sale of Russian debt. Proposals for the formation of the ‘bad bank’ plan — whereby Russian lenders’ non-performing loans are transferred to another bank — thereby hopefully freeing up lending — are to be submitted by Friday.
No one is borrowing, more European sanctions may be on the way; and, oil continues its downward spiral today. Things could get ugly; and, they are certainly going to get worse — economically — in Russia, before they get better. A negative Russian GDP in 2015 of -4.5 percent, or worse, are now being forecast by many on Wall Street.
Putin may feel the need to create even more havoc in Ukraine — partly hoping that geopolitical tensions may boost oil prices; but, so far, that has failed. Unless Saudi Arabia cuts production, and/or, global demand picks up, and enough rigs go dormant — Putin is in real trouble. This is the toxic cauldron in which the young Mr. Un may find himself walking into in less than four months. V/R, RCP