Can the markets take it?

If, as LEvko reports, this mess won't be sorted out until June, will the markets hold still for that? That is a long time for politics and an eternity for markets. Will there be any confidence in the government after all that? It is quite possible that any confidence could evaporate and start a selloff. It happened in the 90s in both Mexico and Venezuela for a lot less.

A rapid devaluation of the currency is not a pretty thing. I was in Venezuela when it happened there. The bolivar crashed, there was a run on the dollar and that caused the central bank to put controls on dollar buys. They needed to do this to be able to use dollars to control the descent (soaking up the bolivars on the market requires buying with dollars) and dollars reserves are needed to pay for goods coming in the the country.

The restrictions pretty much put a halt on imports. I talked with a grain trader at one point and he said the whole country was down to a 3 days supply of wheat. And the owners of any tankers with wheat bound for Venezuelan ports were seriously considering turning them back around because they thought they wouldn't get paid when the grain landed.

People tend to get surly when they get hungry and the Venezuelans have been known to riot. The owners didn't turn them back in the end and there were no riots and Venezuela came through it but came butt up against nationalism. Enter Hugo Chavez. Not a good ending, really.

I hope it doesn't happen here (and I should add, there are many, many reasons why it shouldn't.) But one thing is for certain: The parties on all sides believe they are in a fight to the death with their opponents only and with no others. But there are other interests and other actors who also have a say in what happens in Ukraine. The politicians here need to take that into account in their deliberations and in their public statements. Because those other actors, acting on the basis of self interest, criticize it for that reason as we will, can have a very significant effect on the lives of Ukrainians. (That has been my point with the very careless-- irresponsible, really-- way the investment situation here has been handled.)

But noting what has been said and done in the past, I won't be holding my breath.