[Chengiz88]

@Texas Prophet it wouldnt be a surprise if the ruble fell even further, USD index has entered a new long term uptrend. EM party is over for time being

[presidentcarter]

I think claims that Moscow is crazy expensive are grossly overstated. While it depends on what you're buying, look at the Big Mac index as one example (http://www.economist.com/content/big-mac-index). A Big Mac in the U.S. ranges from about $3.99-$5.23. In central Moscow it costs $1.92 at today's rate and was still much cheaper at normal rates. Rarely ever a cover charge, cheap taxis, mostly acceptable drink prices, and decent to nice apartments that can be had for $1,000-$1,500. Dare to compare that rent to even NYC's boroughs. The problem is these mid-level cafes where a meal for two can be $100 with a drink or two each. That's what killed Roosh when he was here, I believe.

Just don't get yourself in my situation...income in rubles, rent in euros. Shit is getting painful.

[Cattle Rustler]

^^How's your stay in russia coming along?

[Tex Pro]

(11-06-2014 04:04 PM)presidentcarter Wrote:  

I think claims that Moscow is crazy expensive are grossly overstated. While it depends on what you're buying, look at the Big Mac index as one example (http://www.economist.com/content/big-mac-index). A Big Mac in the U.S. ranges from about $3.99-$5.23. In central Moscow it costs $1.92 at today's rate and was still much cheaper at normal rates. Rarely ever a cover charge, cheap taxis, mostly acceptable drink prices, and decent to nice apartments that can be had for $1,000-$1,500. Dare to compare that rent to even NYC's boroughs. The problem is these mid-level cafes where a meal for two can be $100 with a drink or two each. That's what killed Roosh when he was here, I believe.

Just don't get yourself in my situation...income in rubles, rent in euros. Shit is getting painful.

Roosh was getting killed on his short-term apartment rental and eating out. Obviously, if he had stayed longer, he could have negotiated a better rate or looked around for better deals.

The point is that Moscow is crazy expensive for Eastern Europe.

Rent is high if you want to live near the city center. Obviously, the farther out you want to live, the lower the rent (but you sacrifice convenience for cost). Food prices are going up because of the EU food embargo. Nice clubs & cafes are expensive.

Also, the city is the financial heart of Russia, so there is plenty of flash and bling all over the place, so girls are not impressed if you are a foreigner.

[presidentcarter]

(11-06-2014 04:34 PM)The Texas Prophet Wrote:  

(11-06-2014 04:04 PM)presidentcarter Wrote:  

I think claims that Moscow is crazy expensive are grossly overstated. While it depends on what you're buying, look at the Big Mac index as one example (http://www.economist.com/content/big-mac-index). A Big Mac in the U.S. ranges from about $3.99-$5.23. In central Moscow it costs $1.92 at today's rate and was still much cheaper at normal rates. Rarely ever a cover charge, cheap taxis, mostly acceptable drink prices, and decent to nice apartments that can be had for $1,000-$1,500. Dare to compare that rent to even NYC's boroughs. The problem is these mid-level cafes where a meal for two can be $100 with a drink or two each. That's what killed Roosh when he was here, I believe.

Just don't get yourself in my situation...income in rubles, rent in euros. Shit is getting painful.

Roosh was getting killed on his short-term apartment rental and eating out. Obviously, if he had stayed longer, he could have negotiated a better rate or looked around for better deals.

The point is that Moscow is crazy expensive for Eastern Europe.

Rent is high if you want to live near the city center. Obviously, the farther out you want to live, the lower the rent (but you sacrifice convenience for cost). Food prices are going up because of the EU food embargo. Nice clubs & cafes are expensive.

Also, the city is the financial heart of Russia, so there is plenty of flash and bling all over the place, so girls are not impressed if you are a foreigner.

Agreed. But as an international megalopolis, not really.

[CimbomluBkk]

US is shooting itself in the foot by manipulating the oil prices and imposing sanctions on Russia. This might weaken Russia in the short term, but in the long term it will benefit China the most. China needs cheap oil, and they took advantage of Russias situation by signing very favorable deals. Not only did they cut cheap energy supply deals, they also loaned money to Russia at very high interest rates. They're creating a monster which will impose a bunch of problems for them in the future. Obama is one of the most incompetent president in the history of USA

[MichaelCorleone]

The RUBLE to USD has crashed from 33 Rubles (in June) to a USD, to 47 Rubles to a USD today. That is a MASSIVE MOVE on a % basis. On top of the Ruble crashing at this magnitude, massive food inflation is starting to hit Russia.

[CimbomluBkk]

(11-07-2014 07:50 AM)MichaelCorleone Wrote:  

The RUBLE to USD has crashed from 33 Rubles (in June) to a USD, to 47 Rubles to a USD today. That is a MASSIVE MOVE on a % basis. On top of the Ruble crashing at this magnitude, massive food inflation is starting to hit Russia.

I would of expected the MCX to crash more, but apparently its trying to hold out, I'm only down 15%, I would of expected more, I got in when the ruble was at 36.

[Chengiz88]

Markets always overreact (must be something to do with herd mentality) and overbuy/oversell in the short term. Over the long term sound econ fundamentals stand out. The EM party is over and the market is overreacting anticipating a US rate increase. hence the roasting most G10 ccy taking against USD (that and BOJ QE)

[Chengiz88]

China & Russia sign multi billion dollar oil/gas pipeline deal to negate US/EU sanctions. No wonder Obama is heading to Beijing to speak to Chinese premier.

[MichaelCorleone]

I respect Mohamed El-Erian more than almost anyone in finance....see link below..I think his analysis and conclusions are spot on...

http://www.bloombergview.com/articles/20...ial-crisis

[Chengiz88]

@Michael Corleone I agree with El Erian's point 4 about what could end up happening in Russia. The US and Saudi are squeezing Russia hard by smashing the price of Crude. It's kinda like a game of very high stakes poker. Who will blink first Obama and Saudi or Putin

[MichaelCorleone]

Keep in mind these pertinent numbers: The Saudis produce a barrel of oil for less than $30 as break-even in the national budget; the Russians need $105.

If oil stays this low (below $80 a barrel) it will crush the Ruble and Russia's economy as a whole and will also hurt US shale production.

Russia is signing deals with China out of sheer desperation and China knows this and is probably negotiating unbelievably favorable terms for themselves as China has all the leverage in the negotiations. Russia is trying to hedge risk (risk of their entire gas station economy collapsing) and China is taking advantage, it is less of a partnership and more of one party being desperate and the other party taking advantage of a very favorable situation for them. The US would have foreseen this move by Russia as it is their ONLY move and China isn't going to give Russia prices that will offset what Russia really needs, but Russia has no choice. It is all about leverage.

It appears the US made the choice along with Saudi to crush the Russian economy and if it helps China in the process they were fine with that.

[Akula]

(11-14-2014 08:59 AM)MichaelCorleone Wrote:  

Keep in mind these pertinent numbers: The Saudis produce a barrel of oil for less than $30 as break-even in the national budget; the Russians need $105.

If oil stays this low (below $80 a barrel) it will crush the Ruble and Russia's economy as a whole and will also hurt US shale production.

Russia is signing deals with China out of sheer desperation and China knows this and is probably negotiating unbelievably favorable terms for themselves as China has all the leverage in the negotiations. Russia is trying to hedge risk (risk of their entire gas station economy collapsing) and China is taking advantage, it is less of a partnership and more of one party being desperate and the other party taking advantage of a very favorable situation for them. The US would have foreseen this move by Russia as it is their ONLY move and China isn't going to give Russia prices that will offset what Russia really needs, but Russia has no choice. It is all about leverage.

It appears the US made the choice along with Saudi to crush the Russian economy and if it helps China in the process they were fine with that.

Agree with most of this. It's a mess and sooner or later the Russian economy will really get hit hard. The food price inflation isn't as bad as you'd think as I was just there and although prices are slightly up it's not that bad (yet). But given the sanctions now prevent most western imports those have gone up a fair bit. Still it feels like the bulk of the inflation effect is on the come, which will put even more pressure on the government.

One thing to keep in mind is that the other OPEC countries have something like an $80 breakeven price point on their production, so at some point somethings gotta give and the price of oil will stabilize and/or go up a bit. I think the Russia budget is set at a $110 range though and it's unlikely to get to that level in the near future.

Re the Ruble, it's already been crushed and G*d knows where it's going to go. Rates are already sky high in Russia and have been for years, so any further increases won't likely bring in more investment and just stifle the economy more. I hope it gets better but the West seems determined to really hurt Russia - a fact most Russians won't forget anytime soon, regardless of what's happening in Ukraine (where the US and EU effectively fomented an overthrow of a democratically-elected (if corrupt) government). It's funny but Russia currently has no capital controls for capital flight (unlike say China) so at some point they might use that weapon I'd guess.

[Chengiz88]

@Akula agree with your point about US and EU creating trouble in Ukraine and overthrowing a democratically elected govt. Unfortunately NATO has turned into a warmongering organisation and is using the EU as a proxy in expanding their borders. There is no way Russia can accept Ukraine as a EU member that would be an affront to them. It's time EU instead of expanding borders decided to sort out the mess in the PIIGS countries and get their shambolic economic growth and unemployment situation back on track.

[Chengiz88]

@MichaelCorleone Russia is stockpiling enourmous quantities of gold. Putin is in the trenches and ready for the economic war. Read his statement he made today before departure for the G20 in Aus. Russia have huge forex reserves and have in effect let the ruble float they don't need to fight the US.

Re: Saudi oil, their numbers are very dodgy and i I have seen commodity notes from analysts stating that Saudi need oil b/w 90-100bbl as their domestic budget will not balance, so dont think Saudi or US will wont the price of oil to stay artificially low for too long.

[MichaelCorleone]

(11-14-2014 03:50 PM)Chengiz88 Wrote:  

@MichaelCorleone Russia is stockpiling enourmous quantities of gold. Putin is in the trenches and ready for the economic war. Read his statement he made today before departure for the G20 in Aus. Russia have huge forex reserves and have in effect let the ruble float they don't need to fight the US.

Re: Saudi oil, their numbers are very dodgy and i I have seen commodity notes from analysts stating that Saudi need oil b/w 90-100bbl as their domestic budget will not balance, so dont think Saudi or US will wont the price of oil to stay artificially low for too long.

What would you expect Putin to say regarding foreign reserves? Re-read the El-Erian article above, Russia was forced to let the Ruble float because the Russian Central Bank effectively "threw in the towel" in trying to keep the Ruble propped up (Akula also addresses the Russian Central Bank and rates above). Russia is buying enormous amounts of Gold precisely because they are worried about their foreign reserves. Regarding Putin getting ready for an economic war, the economic war started quite some time ago and Russia is losing it very badly, though it isn't helping EU economies either honestly. I only worry what Putin will do if he gets enormously desperate in a deteriorating economic situation.

[BigDave]

(11-07-2014 07:50 AM)MichaelCorleone Wrote:  

The RUBLE to USD has crashed from 33 Rubles (in June) to a USD, to 47 Rubles to a USD today. That is a MASSIVE MOVE on a % basis.

29.8% to be exact.

I live in Moscow and earn in rubles so this has been quite painful, as some of my expenses are in dollars.

But yes prices have gone down by about a third since this time last year in dollar terms.

Moscow is still expensive, but it's not crazy expensive as before. Many things are cheap. Taxis, public transit, basic starch foods (e.g. bread) are all much cheaper than Western Europe or the US. But as always as soon as you want something nicer you have to pay through the nose for it here.

The Russian economy is in major trouble now with the low global oil prices and Putins' misadventures in Ukraine. The city of Moscow last month laid off 7,000 doctors at local hospitals. I talked to one of the lucky doctors who wasn't laid off, her salary was cut from 60,000 rubles a month to just 25,000. A trained pediatrician in Moscow is now making $5,500 per year in salary after taxes.

[BigDave]

Also as to the markets, I read yesterday that as of now if you add up all the market cap valuations of all stocks listed on all the Russian exchanges, the sum total is less than Apple.

[Brodiaga]

(11-15-2014 07:29 AM)BigDave Wrote:  

Also as to the markets, I read yesterday that as of now if you add up all the market cap valuations of all stocks listed on all the Russian exchanges, the sum total is less than Apple.

I also read that. It's ridiculous how undervalued the Russian stock market is compared to the US market. I wonder what's the right time to invest. I wouldn't risk investing a lot, but a small bet could potentially pay off a lot. What if the Russian market cap doubles or triples within the next few years?

[Cattle Rustler]

It looks like we'll have a "fall of Putin" or "fall of Russia" before we have a "fall of the West."

[CJ_W]

(11-14-2014 08:59 AM)MichaelCorleone Wrote:  

Keep in mind these pertinent numbers: The Saudis produce a barrel of oil for less than $30 as break-even in the national budget; the Russians need $105.

If oil stays this low (below $80 a barrel) it will crush the Ruble and Russia's economy as a whole and will also hurt US shale production.

Russia is signing deals with China out of sheer desperation and China knows this and is probably negotiating unbelievably favorable terms for themselves as China has all the leverage in the negotiations. Russia is trying to hedge risk (risk of their entire gas station economy collapsing) and China is taking advantage, it is less of a partnership and more of one party being desperate and the other party taking advantage of a very favorable situation for them. The US would have foreseen this move by Russia as it is their ONLY move and China isn't going to give Russia prices that will offset what Russia really needs, but Russia has no choice. It is all about leverage.

It appears the US made the choice along with Saudi to crush the Russian economy and if it helps China in the process they were fine with that.

Ahhh, so THAT'S why Obama is in China!


Daaamn Obama, U scary

[Chengiz88]

The US / Saudi / EU will have consequences on their economies too, the world is too interlinked for them to isolate Russia totally. If they truly want to punish Russia how about force them out of the US led SWIFT system...funny you will find that will never happen. This economic war is about Russia/China challenging US hegemoney and it has a long way to go before any winner can be declared.

[MichaelCorleone]

(11-15-2014 09:11 PM)Chengiz88 Wrote:  

The US / Saudi / EU will have consequences on their economies too, the world is too interlinked for them to isolate Russia totally. If they truly want to punish Russia how about force them out of the US led SWIFT system...funny you will find that will never happen. This economic war is about Russia/China challenging US hegemoney and it has a long way to go before any winner can be declared.

Chengiz, you are right, the US won't close off SWIFT to Russia, why would they? You don't pull out your bazooka to smoke an enemy when you can finish them with a few bows and arrows would you? People sometimes forget Russia's economy is only the size of Italy's economy.

If the US closed Russia off from SWIFT, it would set a precedent that the US doesn't want set, closing off a country from SWIFT would discredit the SWIFT system in that other countries would think, "Uh oh, the US would really do that, and we better hedge our risk and maybe have a backup plan." The US doesn't want to give any potentially alternate to SWIFT any reason to exist. Russia is trying very hard to establish an alternate to SWIFT at this time, though no countries of significance will sign on.

Russia and China aren't a "team" even though there is a lot of propaganda out there insinuating that they are. Russia and China are both independent players on the world stage that will act in their own best interests. The US gave China an enormous gift by forcing Russia to sign the gas deals with them at probably crazy prices favorable to China. This is a high stakes game of Chess, not a reactive and ideological fist fight.

The Russian economy and Ruble are only starting to feel pain. Unless something changes materially very soon, the Ruble and the Russian economy is going to crater big time. Though I could be wrong, it has happened many many times before.

[MichaelCorleone]

Great Bloomberg article on the price of oil and who benefits the most and who is hurt the most.

http://www.bloomberg.com/news/2014-11-16...power.html

It appears Vlad is going on the record, saying, in essence....I am not backing down in Ukraine and pretty much saying the partition of Eastern Ukraine is permanent (when he says he won't allow the rebels to be defeated)....so the sanctions will remain in place indefinitely....which means Ruble and Russian economy bye bye....

http://www.bloomberg.com/news/2014-11-17...ebels.html

It is too bad and I feel very sad for the Russian people that they are going to go through so much economic pain because of this geopolitical stuff.