As if right on cue to accompany the news that Russia’s industrial output has slumped by more than 10% for the month of November – far exceeding even the worst expectations – the Financial Times is running a piece which asks how long the political leadership will be able to weather the storm.  Although Masha Lipman says mass protests aren’t likely to spring up immediately, one should never underestimate the cohesive, organizational power of suddenly having a common grievance to fight for.  The article also mentions the swelling rumors of Vladimir Putin’s increasing discomfort in the role of prime minister, and the possibility of a shift in office to make someone else carry out the deeply unpopular devaluation of the ruble.

Pavel Teplukhin, president of Troika Dialog Asset Management, points to a 20 per cent drop in railway freight traffic between October 2007 and October 2008, and a drop in electricity consumption of between 3 and 5 per cent over the same period. The iron and steel sector has been hard hit, with the big steel plant at Magnitogorsk, in the Urals, cutting production by up to 30 per cent.

There are two big dangers for Mr Putin. One is a substantial forced devaluation of the rouble. The other is a sharp increase in unemployment.  (…)