Recession in Russia! You Read it Here First!

One month ago, we reported that Russia would likely enter a recession this year.  It had experienced two consecutive years and two consecutive quarters of declining economic growth, and even state-sponsored media conceded that the only reason it was not already in a recession was the price of oil.

This week the price of Brent crude dropped below $100 per barrel, and not one but two prominent Russian figures announced that Russia has entered recession.

First there was Ksenia Yudaeva, Putin’s representative to the G-20.  She stated: “Frankly speaking, Russia probably already is in recession.”

Then came oligarch Mikhail Prokhorov, owner of the New Jersey Nets.  He stated: “The economy is in recession.”

Moreover, Russia Today admits that global investor interest in Russia has plummeted by a shocking two-thirds in the last month.

You read it here first. Way out in front of the curve, we told you long ago that Russia’s economy had lost its momentum and was headed for the big flush.

But that’s only half the story.  We also told you that Russia’s inflation rate is out of control, which should not be happening as the economy contracts and is a sign of the paralyzing ultimate economic disaster known as stagflation, the illness that destroyed the USSR.

Putin has led his nation once again to the brink of national collapse.

On Navalny and Prokhorov


If you think about it, in theory the notion of a political tandem forming between billionaire Mikhail Prokhorov and blogger Alexei Navalny is an interesting proposition.  Each compliments the other almost perfectly  Prokhorov brings name recognition, financial stability and business connections, Navalny brings street cred, web connections and opposition chops.

A recent poll from Levada shows that a shocking 64% of Russians have never even heard of Navalny and only 14% (barely a third of those who have heard of him) would even consider voting for him for president.  Navalny’s name recognition soared upwards in 2011, from just 6% in April 2011, to an amazing 34% in June 2012.  But then more recently, it has plateaued.  The number had increased to just 37% by March 2013.

Prokhorov’s name recognition is much better, at most a fifth of the Russian population is unable to identify him.  But Prokhorov’s name recognition doesn’t help him with electability, his level is nearly as low as Navanly’s.  Just 18% of Russians said they were prepared to consider casting a vote for a political party organized by Prokhorov, and when he ran for president he was soundly repudiated, taking less than 8% of the vote. That’s because Prokhorov’s credibility is extremely low.

A clear majority of Russians who have read it (granted, a very small group) are prepared to believe that Navalny’s anti-corruption reporting is valid. Less than 20% of Russians who have read them reject his reports, while only about a quarter is unable to decide (still, that’s a surprisingly large 46% of Russians who know Navalny questioning him on critical facts).

As such, Navalny’s credibility within his cult of followers is far higher than Prokhorov’s, since 40% of Russians are prepared to believe Prokhorov is a puppet controlled by the Kremlin while only 30% believe he is his own man.

There are three main problems, though, with a Prokhorov-Navalny tandem. First, Navalny is headed to prison.  He’s been charged with embezzlement in a move very similar to the one that sent oligarch Mikhail Khodorkovsky to the big house, and he has said he expects to be convicted.  Second, Prokhorov is exactly the type of person Navalny has spent his adult life attacking for corruption. And third, Russians are almost certainly correct when they conclude Prokohorov isn’t a serious reformer and is in fact a Kremlin puppet.

That’s to say nothing of the opposition movement’s persistent failure to show any signs of being able to cooperate and form such unions.  Each and every time something of the sort has been tried, it’s ended in abysmal disaster.

As such, comparing the two only serves to emphasize the pathetic weakness of Russia’s so-called opposition.