Down 25% isn't normally considered "remarkably well". The average PE for Russian stocks is 6. Compare that to 17 for American stocks. Russia has been trying to prop up its stock market the same way it has attempted to prop up the ruble and it can't continue to do that for long. You can believe what you will about oil prices. But price wars send prices down. And with OPEC states moving to protect market share, what we have here is a price war.
we shall see if it stabilizes on a other note Russia needs to settle some debt/ pay intrest at the end of the month it's a other 34 billion http://online.wsj.com/articles/russian-companies-clamor-for-dollars-to-repay-debt-1412860551 meanwhile rosneft takes over 16.67% of totals PCK Raffinerie GmbH in Germany. http://rt.com/business/209767-rosneft-share-total-refinery/ Rosneft has asked 42 billion state support and needs to repay 21 billion in loans before april 2015 http://www.businessweek.com/news/20...d-as-rosneft-s-21-billion-looms-russia-credit it's deemed to important to fail for Russia.
Russian companies have tremendous foreign debts that come due next year and in the years beyond and the Russian central bank has limited funds. It can only support those companies for a limited period of time. Between supporting the Ruble and keeping the gold mining and oil industries alive, the Russian central bank is between a rock and a hard place. Without access to Western credit, Russia's oil production will atrophy further exacerbating an already dire situation. By the way, WTI (West Texas Intermediate Oil) closed at $66/barrel on Friday. And Brent Crude closed at $70/barrel. http://www.bloomberg.com/news/2014-11-28/russia-s-oil-giant-battles-debt-after-55-billion-deal.html
"MOSCOW—Russia’s Economy Ministry warned that the country will slip into recession next year and the ruble will remain weak, in the government’s strongest admission yet of the depth of the damage wrought by the drop in oil prices and Western sanctions." http://online.wsj.com/articles/russia-sees-economy-in-recession-next-year-1417513889 At least they did before the Finance Ministry got involved. Please Register or Log in to view the hidden image! Getting good data out of Russia is problematic with Putin at the helm and in control of the press. But when the Russian economy ministry warns of recession, you know it is bad. Even though Russia's economy ministry is predicting recession, I still think their numbers are far too optimistic based on unfounded optimistic assumptions about the price of oil and impact of sanctions. As I have written many times before, shorting the Russian economy or buying puts against the Russian economy is the only way to go. The Russian puts I bought just a few months ago have doubled in value and I think there is more value to be had by betting against the Russian economy. Putin is unwittingly offering savvy investors an opportunity to reap some huge profits on the demise of the Russian state he is single handedly engineering. It's a sad state of affairs for Russia. But Putin is calling the shots.
The Russian buckwheat panic begins. "Moscow (AFP) - With its warm, fluffy brown grains, buckwheat is the ultimate comfort food for Russians and as sanctions hit home, it is flying off the shelves in a shopping frenzy dubbed the "buckwheat panic". Hard-hit by falling oil prices and Western economic sanctions imposed over the Kremlin's role in the Ukrainian crisis, Russia is seeing a catastrophic depreciation of the ruble and steep inflation. But while Russians grumble about the rising price of chicken, cheese or sausage, it was only when rumors spread of buckwheat supplies running low that shoppers dashed out to fill their trolleys. Buckwheat "is not just a food, it is a national idea," Russia's leading business daily, Vedomosti, wrote recently in an editorial. While in the West buckwheat is seen more as a trendy food for the health conscious, in Russia it is a traditional staple, predating potatoes. "In Moscow, people see a television news report about a buckwheat crisis in Penza", a city 600 kilometres (350 miles) away, and "in just four days they buy up buckwheat stocks that would normally be enough for two months," the Moskovsky Komsomolets daily wrote. One supermarket chain in the northwestern city of Saint Petersburg even introduced a five-pack limit for buckwheat purchases. Even though buckwheat is homegrown and so little affected by sanctions or the falling ruble, the price of a packet of buckwheat rose from around 30 rubles to 50 rubles ($0.93) in Moscow and doubled in some regions. "People store up on buckwheat -- which can be kept for a long time -- because they do not know what to expect from the (Western) sanctions," said Galina, a trader at a Saint Petersburg food market. Read more: http://www.businessinsider.com/afp-buckwheat-panic-grips-russians-as-economic-sanctions-bite-2014-12#ixzz3LHJnXTwm
Your probably right that they store it in case stores suddenly go empty. Rice would probably be better, but I do hope they find a solution to the conflict. If I had to bet I would still see Russia as a part of the EU but that seems far off at the moment. meanwhile the oil prices are at 66.3 € http://www.nasdaq.com/markets/crude-oil-brent.aspx
You know it is desperate when Putin offers amnesty to Russians who repatriate their hidden offshore wealth. But who in their right mind would repatriate their wealth even if they believed Putin's promise of amnesty. Putin's record is nothing if not capricious and reckless. http://www.economist.com/news/europ...s-his-people-west-out-get-them-vladimir-great
It's called tax amnesty it's not that rare (last time they got 130 million $) There's no clear respons on how he's going to manage the massive foreign debt payments between now and april, some russian minister predicts that by the second quarter of 2015 the oil price will reach rock bothem and start recovering (or they will at least have a clearer picture by then). But they wont save on the military tough they expect that will rise 30% in 2015. that's a other 15 billion $ lost (it all ads up). theirs also some infighting Roscosmos the russian space program was asked to increase wages to increase efficiency and reduce the brain drane they where also asked to reduce their spending by 5%? Putin on the otherhand got sort off religious abouth Crimea and that's never good.
No, it is called repatriotization of capital. There is nothing illegal about owing foreign assets. Russians may not have declared taxes on foreign earnings, but there is nothing illegal about owning foreign assets. Hell, Putin’s kids don’t live in Russia but the Netherlands. Putin is do desperate for capital he wants Russians to move their foreign holdings back into cash poor Russia which will then confiscate those assets. I think your average Russian who is smart enough to earn some extra cash can easily see through Putin’s motivations. Additionally, tax amnesties are rare. Why should people pay taxes if they can just wait for the next tax amnesty? The last time Russia offered a tax amnesty was in 2007, seven years ago, and that is where your $130 million dollar number comes from. That was a different time and different circumstances. It isn’t at all even remotely similar to the situation Russia now finds itself in. I think the Russian finance minister is overly optimistic and for obvious reasons. Oil isn’t going up anytime soon if OPEC maintains its current policies. And I don’t see them changing course. If the US and Iran come to accords on Iran’s nuclear programs, then we could see a flood of new oil enter the markets. It isn’t looking good for Mother Putin. The irony here is Putin seems to be oblivious as to his circumstances and the challenges he faces. He wants to spend more money on his military and on scientific research thinking he can out militarize and out research Western nations. That is delusional thinking in the extreme. Russia is already far behind the West in science and in military and economic strength. All of this bodes ill for Russia in the near and long term.
one of them did but they officialy live in Moscow for the moment her husband (dutch). In reality they probably live in China until things cool down. The other one names herself Katja and probably lives in South Korea. It's a common problem for the oliarchs daddy's Always busy and the kids grow up abroad then one day daddy dies and these "foreign" kids inherit billions. I know ITER's tokamak (fusion device) currently being build in France is of Russian design (the tokomak is a russian conceptà they also are building many of the worlds nuclair reeactors. They are the number 1 weapon exporters with famous names like the kalashnikov, unlike the Us they are still capable of manned space flight (thats going to change soon) and whilst not a economic power house (larger GDP then any state) they have many natural resources. That said they have many problems (and a even larger potential ... if) I don't know on how to deal with Putin and what we do right now is better then ignoring the situation. But a colappsed state wouldn't do the west any good either
Well both of them did and may still reside in the Netherlands. After the shoot down of MH17 they went into hiding in order to avoid the media and protestors and the calls for her deportation. His daughters don’t even live in Russia and that is the point. When you say officially, you mean that is what Putin tells people. But as we know, what Putin says is often vastly different from reality. Must be nice. That was 60+ years ago. Russia does export arms…but mostly low tech arms but they are not the largest. The US is the largest arms exporter. Russia is the Volkswagon arms dealer and the US is the SUV arms dealer. And we see how well Russia builds nuclear reactors (e.g. Chernobyl). About 15 nuclear reactors are built each year and Russia caters to the low end reactor buyer (e.g. India, Iran, et al). And has been pointed out to you, the US is still capable of space flight. Did you not see the successful Orion launch just a few days ago? Russia does have natural resources in abundance and is hugely dependent on them. Oil is Russia’s largest export and oil natural gas sales fund most Russian government expenditures. Those natural resources don’t do Russia much good if they cannot sell them. They cannot eat their oil and Russian expenses are mounting faster than they can sell their oil. Indeed they do have problems in abundance and they begin with Putin. It is unfortunate but the country failed the transition from autocracy to democracy. And there isn’t much that can be done about it now. We don’t have a collapsed state yet. But if Putin continues, we soon will. It won’t be the first time Russia has become a failed state.
I assure you it's ongoing This years convention in saint petersburg many of the inner parts are made/tested by Russia including the inner magnets and the plasma testing for the walls happens in Russia (This inner wall will corrode over time and will probably be a key factor on how long the machine can opperate before it has to be shut down and be replaced. Theirs also a bid by Russia to have the first actual Fusion reactor that produces energy on Russias soil (It doesn't look that likely today). In many other ways Russia works well in a team (The ISS for example theirs many more). Funny example in export Russia and the US are practical even The US sold more in 2012, Russia more in 2013 it's pretty even. abouth the quality? It depends on how you look at it I guess the most popular fighter jets for example are: Mikoyan MIG 35 followed by the Sukhoi Su-35 a MIG 35 cost 30 million $ a F-22 Raptor cost 138 million Theres a argument to be made that 5 fighter planes are better then 1. Quality VS Quantity theres no clear winner it's all abouth preference. Their where design flaws but don't forget 3 miles Island and fukushima accidents do happen and in hind sight all these accidents could have been avoided Chernobyl happened to be the worst both in release of radiation as in the communication (by the soviets). It desserves further attention tough that nuclear reactors aren't well maintained at the moment. For Europe the worst one is the Leningrad Nuclear Power Plant it has had a long list of problems and a accident would spell trouble for all countries at the baltic sea (Russia saint petersburg) Finland (with Helsinki) Estland (Talin) are all in the inmediant neighberhood and then theirs the coast of the baltic, poland, Russia Germany,denmark Norway and Sweden. The reason they do not close it down is because they have no money for a new one (this is one of the reasons a banckrupt Russia would be a bad ID). The worst one in general is a reactor in Armenia called Metsamor Nuclear Power Plant. Yes it was very exciting, but my problem with it is, why in a world they could put a man on the moon are they not capable to put a man on the moon. America should have never lost this capability in the first place. BTW space X is going to try and land their rocket on that sea platform next week on dec 16 Russia isn't well governed at the moment (Neither is the rest of the world but that's a different story and fer less severe). This will eventually kill the west. The soviets have builded things to last but poor maintenance on those reactors or failed oil deliveries (because the state failed) or any other thing could spell doom. Something must be done with Russia but with the sanctions whe are officially intervening in Russia and my gues would be their should be more carrot then stick then we're using now. Like you said the problems are more with Putin and not neccesairly Russia
My best guess would be to start in Ukraine I would like to see more drones in eastern Ukraine it would be nice to have a clear picture of what's going on there RT can place webcams near the donetsk airport so it shouldn't be inpossible to put some cams in the air and near the border. Afther that people should look into what that eastern region exactly want small concessions could be made if they are as simple as having Russian/ukranian language education. Then something has to happen abouth the corruption.
The panic begins in Mother Russia. "Moscow (AFP) - Prime Minister Dmitry Medvedev urged Russians to be patient Wednesday as the ruble plunged further due to falling oil prices and Western sanctions over Ukraine, and said the currency was now undervalued. "It's definitely not necessary to go into hysterics," Medvedev said in an annual televised interview. "Here, people just need to have patience and look at how events developed in a similar situation in 2008-2009 when the ruble weakened significantly," he told five television channels. "Most economists and analysts agree that at the moment the ruble is excessively weakened, that is, it is undervalued," said Medvedev, who served a four-year stint as president from 2008 before ceding the Kremlin back to his mentor Vladimir Putin in 2012. He warned that Russians could ultimately lose if they converted their savings into foreign currency. The dollar is now up some 65 percent against the ruble since the start of the year." https://news.yahoo.com/russias-medvedev-urges-calm-patience-over-ruble-collapse-115948839.html
The Russian central bank has now raised it interest rate into double digit territory. Even so, that barely covers inflation. The Russian base interest rate should be far higher. It is barely keeping pace with inflation and it certainly is not enough to "stabilize" the currency. And if that wasn't bad enough, yesterday oil prices went below $60/barrel. I still think forecasts, especially Russian forecasts, are still far too optimistic. The Russian central bank isn't expecting growth until 2017. I don't see any material increase in oil prices before 2016 at the earliest and Putin still has another 10 years or more in office, and I don't see Putin being sprinkled with fairy dust from the good fairy anytime soon. So the sanctions will stay in place. The outlook for the Russian economy is indeed dire. It is looking at hyperinflation combined with recession. Russia has jumped into an economic death spiral of its own creation. http://www.bloomberg.com/news/2014-...end-ruble-run-as-rout-ravages-economy-1-.html
Putin has made a mess of Russia's economy. He is blaming anything and everyone for his self inflicted pain. But blaming fictitious monsters will not solve his very dire and real economic problems. Putin's blustering will not fix what ails Russia's economy. I wouldn't be surprised to see Putin invoke capital controls early next year (Q1 or Q2). I think oil is headed for $50/barrel and Mother Russia is looking at 18% to 20% inflation next year combined with negative economic growth (i.e. economic contraction). Russian ETFs will be trading in penny stock territory. http://www.businessinsider.com/what-will-happen-to-russias-economy-2014-12 http://en.wikipedia.org/wiki/Capital_control
bad day for the russian markets I wonder what will happen to the 3% of Russians that use a foreign currency mortage (interest rates are lower in € and $) http://www.cbr.ru/eng/statistics/UDStat.aspx?TblID=4-1&pid=ipoteka&sid=ITM_2357
Well that was fast, the Russian central bank just raised interest rates to 18%. But that won't be enough. It won't fix Russia's ills, merely delay them but not by much. I wouldn't be surprised to see the Russian central bank selling gold soon.It needs foreign currency.
The interests are 17%... Russia is actually buying gold. They purchased 92.8 ton of gold between july - september or 59% of the world puchases (link) This was before the Swiss november vote against transferring 20% of it's assets in gold so the prices have droped somewhat. I'm not sure what they are hoping to do. Their doesn't seem to be any talk in Russia that could end in dropped sanctions. (Meanwhile Venuzuele isn't doing that good either)
