Yields on Russian government debt bonds have soared on the expectation that credit ratings agencies will reduce the rating to junk. The ruble, on further news that oil has reached $50 a barrel, has tumbled once again. This morning, as Brent trades above $50, the ruble has begun another tepid ascent in value. Standard & Poor’s has announced it will lower Russia to non-investment grade status within 90 days, and Fitch will announce its review tomorrow. In a welcome and opportune reprieve from unremitting economic bad news, Russian markets will be closed tomorrow for the New Year’s celebration (which follows the Gregorian calendar, which is why it is not on Jan 1).

Russia is on the short list of several countries that include nearly insolvent Greece and Ukraine for most expensive credit default swaps. However, one of the main issues for the Russian economy continues to be lack of access to international debt and capital markets in the West, creating a liquidity crisis whereby more lending is badly needed. The Russian Central Bank raised interest rates last month to help stimulate domestic lending, and also leaned heavily on its dollar reserves, spending some $88 billion last month propping up the ruble.

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News Briefs:

• Negotiations between the P5+1 powers will resume in Geneva next week, on January 18, announced Iranian officials. This will set the discussion for the next three months and the new July deadline to reach a viable political framework for a nuclear deal that will end sanctions against the country in return for the dismantling of the country’s civil and military nuclear programs. Thus far, Iran has still rejected any dismantlement of its nuclear infrastructure. Bilateral negotiations between lead negotiator Abbas Araqchi and American/Russian counterparts will begin on January 15.

• The tankers of Kazakh company KazMorTransFlot National Maritime Shipping Company have begun to transport oil cargo from Turkmen ports in the Caspian sea. The two tankers that comprise the small fleet, the “Almaty” and “Aktobe” tankers will ship Turkmen gas towards Makhachkala in Russia and Baku in Azerbaijan.

• The government of Tajikistan has announced its formal concern over Tajik youth receiving informal educations abroad in religious madrassahs, particularly those in Pakistan and Iran. The fear is that they are becoming indoctrinated at these schools with fundamentalist Islamist ideology. The Tajik government stated that some 158 Tajiks are currently studying illegally at foreign madrassahs.

• Iran has apparently begun to mass produce Saeqeh or “Thunderbolt” fighter jets, according to a spokesman for the Islamic Republic of Iran Air Force (IRIAF), Brigadier General Hossein Chitforoush said. In spite of appearances, the general insisted, production of these planes do not pose threats to any other neighboring countries.

• The Kiev government has deployed new military aircraft and heavy weapons to troops on the frontlines of the tense standoff between separatists and government troops. Three soldiers were killed yesterday on Eastern Orthodox Christmas, igniting new fears that the ceasefire could be breaking down. Ahead of the new peace talks scheduled for tomorrow, tensions are still high between eastern separatists and government troops.