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Tuesday, October 02, 2007

LIMO or LIMI? Diet Orange or Bitter Blue?

With 4 percent of the vote still to be counted, dreams of a slim Orange coalition BYuT (30.81%) and NUNS (14.27%), may be shattered. The LIMO (Lytvyn in, Moroz out) flow assumption appears less than safe. Don’t count your chickens before they’re hatched!

Under the LIMI (Lytvyn in, Moroz in) flow assumption, the balance of power may shift dramatically and not in the Oranges’ favor.

The math makes Lytvyn a mercenary, and puts him in Moroz’s behavioral niche. Under a worst-case scenario, the SPU surpasses the 3 percent threshold, and joins forces with the PRU (34.19%), KPU (5.37%) and LyB (3.98%). Should this scenario prevail, it’s the Blues who will gain a razor-thin majority.

In a Rada where seats are in short supply, Volodymyr Lytvyn will sell his services to the highest bidder.

Who is Mr. Lytvyn? Kuchma’s chief of staff (1996-2000) involved in the Gongadze scandal; leader of the pro-Kuchma ZaYedu bloc in the 2002 parliamentary election; a PhD in history caught in the act of plagiarism; speaker of the Rada (2002-2006); and an also-ran in the 2006 parliamentary election.

This year, his third-party platform has propelled him back to the Rada, where he will seek to exercise his “golden share” leverage.


Anonymous said...

"Diet Orange or Bitter Blue"

ROFLMAF!!! Much needed laugh.


Taras said...

Yeah, help yourself:)!

I guess I'm a little paranoid in my Moroz watch. "It ain't over till it's over," as the saying goes:)

Anonymous said...

I think it is entirely justified. I think he will barricade himself in Rada in speaker's chair if it would do the trick. I put nothing past him at all. There is no going quietly into the night for this.


elmer said...


Still below 3% with over 98% of the votes counted.

Are you beginning to breathe a little bit more easily?

Taras said...


I wouldn’t discount your scenario:)! We’ll probably need a SWAT team to streamline the eviction process. But even if we take Moroz out of the Rada, we won’t be able to take the Rada out of Moroz. Given his passion for writing, I’d expect a voluminous book of memoirs.


I feel much better now, buoyed by the numbers therapy:)!

Anonymous said...

What could happen? potential free-fall? or a stronger hryvnia?

"The new Ukrainian parliament could oblige the National Bank of Ukraine to un-peg the hryvnia from the dollar and transfer to a more free exchange rate, according to former Economy Minister of Ukraine Serhiy Terekhin, who is 24th on the election list of the Yulia Tymoshenko’s BYT bloc.

"Today, the discussion of the future system for exchange rate formation has almost been completed. Today, even the NBU board understands the mistakes of its policy of binding the Ukrainian currency to the weakest reserve currency in the world. Today, there are thoughts that the Ukrainian currency will [float freely against] other currencies," he said on Monday."
Ukrainian Journal

Michelle said...

Okay I'm lost....I feel like this is a geometry course...:)

Taras said...

I assume it’s you, Luida;)

With a high degree of certainty, the National Bank will slightly revalue the hryvnia, currently undervalued by some 40 percent against the flailing U.S. dollar. Consider this a “Thanksgiving present” from the Oranges to the Ukrainian people. We consumers will get a little facelift; the oligarchs will get a little liposuction.

Ukrainians have paid a heavy price for the decadelong distortion in their currency exchange system. In addition to living with the consequences of grabitization, they’ve been financing metal exports out of their not-so-deep pockets. As a result, Ukrainians have been promoting the wealth of the few over the welfare of the many, a phenomenon which I call “McDonbas.” (This has to do with the Big Max Index, not with McDonalds per se.)

However, a drastic revaluation seems unlikely, as it would put a dent on the economy. Also, I see no reason for the NBU to switch to a free-float policy. IMHO, there will be a managed float, albeit with a wider band.

The “contract with Western companies” that Tymoshenko signed in September supports the revaluation line of thinking. A revalued hryvnia will benefit Western companies that convert their hryvnia-denominated earnings into dollars for repatriation.

Taras said...


I often get lost in this geometry myself:)

President Yushchenko today called on the Party of Regions, BYuT, NUNS, and “other winners,” as he phrased it, to start coalition talks. I take it he’s trying to nice to the party that has won a plurality of the vote, but will be relegated to the opposition ranks. An opposition that consists of the Communist Party (KPU) and the Lytvyn Bloc (LyB) just doesn’t make any sense.

With less than half a percentage point left to be counted, the jigsaw puzzle no longer looks menacing. Moroz’s departure sets the ground for an Orange coalition headed by PM Tymoshenko. Inviting the Regionalists to the “party” would amount to political suicide for NUNS and Yushchenko.

elmer said...

Yushchenko also set forth some goals for Rada to accomplish, which I think are pretty darn good, involving energy security, "one law for all," eliminating deputy immunity, improving the economy, etc.

What do you think of this summary of the voting?

Taras said...

So far, all I can say is "Hasta la vista, comrade Moroz!":)

The Kremlin's skunk attack indicates fear of an "hasta-la-vista-RosUkrEnergo" scenario.

Anonymous said...

Sorry, it was me, was in a rush.

"I see no reason for the NBU to switch to a free-float policy. IMHO, there will be a managed float, "

sounds good to me though I wish I could read all of his statement to be sure. Some diversification esp. to euro and not being tied to just one currency makes sense. Let's see how it is implemented (if implemented) and how it works out.


elmer said...

So - you are finally feeling MUCH more comfortable.

I'll say one thing - waiting for last 10% of the votes to be counted in Ukraine is like watching grass grow.

It's amazing how quickly they got to about 90%.

Now it's like watching paint dry.

Emmychka said...

I will say this, Ukrainian politics are more fun than American politics.

elmer said...

emmychka, I'm not trying to be mean or nasty here, but it seems to me that you really don't comprehend the situation.

For the people of Ukraine who have to put up with the consequences of the "fun" which the politicians are having at the expense of the people, it is a grim picture indeed.

Pēteris Cedriņš said...

I guess I broke out the Champagne prematurely. Please tell us poor non-Ukrainians more about Lytvyn.

Taras said...


You're both right and wrong.

On the one hand, Ukrainian politics can hardly be categorized as pure fun for ordinary Ukrainians at “ground zero,” who have to live with its daily debris. On the other hand, unless we make fun of it once in a while, we increase our risk of a heart attack:)

Emmychka may not be an expert on Ukrainian politics, but she does have a good grasp of the situation. And she does good things for Ukrainians. Read her recent comments at Michelle’s Greetings from Kyiv blog. I share her insights.


Enjoy yourself while you can:)! Learn more about the different sides of living in Ukraine, and spread your knowledge among your fellow Americans:)!


Rush for the euro!:)


Keep the champagne cool:)! It’s not as bad as it looks. As of today, we can count Moroz out. His long-awaited departure effectively seals the door of Yanukovych’s room for coalition-building maneuver.

Lytvyn will ink a prenup with the Oranges, in which he will extract certain benefits from the shorthanded monopsony. That leaves us with the Blues and Commies in the opposition role.

As for the gloomy interpretations of the President’s statement, I believe it was a false alarm. It was a word of courtesy from the head of state that had the unintended consequence of sending ripples of unease through the Orange camp. (Well, perhaps it was intended as an ego tease for Tymoshenko.)

In short, Lytvyn is no Mr. Clean. As a coalition partner, he will require close supervision. More on the subject:

elmer said...


Making fun of politics is not the same as politics being fun.

This is a never-ending "gimme, gimme, gimme" card game.

And everyone playing is a card shark, with all sorts of crooked cards up their sleeves and elsewhere.

I think it was Bismarck who said that there are 2 things that one should never watch in the making - laws and sausage.

Well, the making of the Ukrainian Rada is yet another thing that no decent person should ever see.

Watching maggots eat rotting flesh would be more pleasant. :-)

Anonymous said...

I think the following is based on ur headliner and could be valid copyright infringement and just recently Ukraine signed agreements re: intellectual property

"Oranges and Lemons"
url contd


Taras said...


Politics becomes fun when we add value to it, no matter how grim the reality. “Turn the yoke into a joke,” let’s put it that way:)

To me, it’s the art of distilling humor from the hell of our lives — a survival technique that, coupled with activism, ensures change.

I wonder when they will cut this coalition circus. Or is the spirit of Moroz still alive?:)


You’re a gem:)! Thanks for the tip;) I’m glad The Economist appreciates my work. I’m gonna sue the bastards and win a bigtime lawsuit! If not, at least I’ll know more about Lytvyn’s penpals in London:)))