Russia and OPEC

[bluedye33139]

Russia declined to lower production levels in accordance with OPEC. OPEC had hoped to maintain high prices by controlling output, and Russia cannot do so because they do not have a strong economy and do not have any kind of savings or reserve or wealth. So they pushed to maintain their high output.

https://www.cnbc.com/2020/03/09/oil-prices-what-a-price-war-means-for-the-us-saudi-arabia-and-russia.html

OPEC retaliated by lowering the price at which they were selling oil. They lowered it below what is profitable for Russia. This retaliation was designed to cripple the Russian economy, as no one will purchase oil from the vicious Russians at a higher cost than with the market is.

In the waves of change that will come from this, we are going to have extreme market volatility and many of us are going to see a gigantic drop in the value of our stock portfolios.

It's important to remember that the value of those stocks is different from the current price. The fluctuation will readjust in future years, but we're all going to take a loss on paper this morning.

And I hate to sound petty, but I hate Russia so much that I'm willing to see this happen. Russia will suffer tremendously from this.

[MaryMagdaline]

1. Hmmm what happens when a super power is challenged by a country with no military?

SA can’t depend on USA to defend them.

[bluedye33139]

2. Russia is relatively small, and their military budgets are almost equal

Saudi Arabia's military budget is 64 billion dollars a year, and Russia's military budget is 66 billion dollars a year. In terms of comparable strength, they are not that poorly matched, and any conflict would be protracted.

[dalton99a]

4. It's possible that this is temporary and part of a negotiating chess game

[Wounded Bear]

5. The market was over valued anyway and due for a correction...

They extended the Obama surge as long as they could, but the Trump Slump is upon us.

Coronavirus triggered it, the oil price war intensified it. But the corrections we're seeing are largely structural.

1Q20 is gone, earnings-wise. If we're lucky it will flatten out in 2Q20.