[tattiemasher]

I have some sympathies for my Russian friends here, but when I talk to a foreign exchange student who thinks they are doing alright because they get the equivalent of $900 a month from their home university, you know that everyday people must feel any sort of price rise pretty hard in the pocket. I know a married couple here who now don't earn as much as I do even when you combine their full-time wages. Not enough for societal strain, but enough to keep their spending very tight. On the flip-side, I'm about 40% richer here than I was six months ago. I've indulged most days at the supermarket since I arrived on some overpriced and/or unnecessary stuff, and have probably spent an average of about $15 daily. If I was being frugal, I reckon I could get by on $5 a day very comfortably and still be eating healthier than most here. Off the top of my head, 1kg of chicken crown, 1kg bag of frozen veg (carrots, brocolli and cauliflower), 5l jug of water, a few apples and a few basics like milk, butter and a small block of cheese the other day cost me about 650 rubles. Even a 1.5l pitcher of beer in a local chain pub cost me around 230 rubles, and a 50ml serving of a reasonable single malt was 250 rubles. It's almost nothing compared to back home. And given that shopping list could last you more than a day, it's a good time to be living in Russia on even a modest western wage.

[Cr33pin]

So how long will this last? I met a awesome wing man from Moscow here in Peru and he goes back next month and is trying to get me to go back with him. He shows me his tinder from Moscow and its more like a modeling agency website. He also says there are more girls then guys there and the odds are always in our favor.

I came to Peru to escape the cold weather but I am pretty tempted to head over there.... he said its not as good to go in the summer cause girls vacation a lot, but during the winter all the top talent it always there.

[tattiemasher]

(01-06-2015 10:36 AM)Cr33pin Wrote:  

So how long will this last? I met a awesome wing man from Moscow here in Peru and he goes back next month and is trying to get me to go back with him. He shows me his tinder from Moscow and its more like a modeling agency website. He also says there are more girls then guys there and the odds are always in our favor.

I came to Peru to escape the cold weather but I am pretty tempted to head over there.... he said its not as good to go in the summer cause girls vacation a lot, but during the winter all the top talent it always there.

I doubt it'll fully recover by the first half of 2015, though in the long term I believe Russia will bounce back. I can't tell you much about Moscow, here I've had about 15 girls show up on Tinder over the space of a full week, half of whom I swiped left, and the other half either I couldn't communicate enough with or they didn't match. The 2nd tier is a lot more about getting out there in person, social circle, and having a decent enough grasp of the language. In Moscow, you'll have a far better chance, as you've seen from your friend.

As for the weather, Moscow is milder than Siberia and the east. It's not so cold that you'll avoid going outside. Wear gloves and a hat and you'll be just fine.

[MichaelCorleone]

(01-06-2015 10:57 AM)tattiemasher Wrote:  

(01-06-2015 10:36 AM)Cr33pin Wrote:  

So how long will this last? I met a awesome wing man from Moscow here in Peru and he goes back next month and is trying to get me to go back with him. He shows me his tinder from Moscow and its more like a modeling agency website. He also says there are more girls then guys there and the odds are always in our favor.

I came to Peru to escape the cold weather but I am pretty tempted to head over there.... he said its not as good to go in the summer cause girls vacation a lot, but during the winter all the top talent it always there.

I doubt it'll fully recover by the first half of 2015, though in the long term I believe Russia will bounce back. I can't tell you much about Moscow, here I've had about 15 girls show up on Tinder over the space of a full week, half of whom I swiped left, and the other half either I couldn't communicate enough with or they didn't match. The 2nd tier is a lot more about getting out there in person, social circle, and having a decent enough grasp of the language. In Moscow, you'll have a far better chance, as you've seen from your friend.

As for the weather, Moscow is milder than Siberia and the east. It's not so cold that you'll avoid going outside. Wear gloves and a hat and you'll be just fine.

I could be completely wrong, but in my opinion it will probably get much worse before it will get better. Oil fell 5% yesterday alone, the global economy is teetering on recession which will further decrease demand for oil, and Russia and other players will keep pumping it nonstop and cannot afford to curtain production.Canadian shale has been destroyed andUS shale is being hurt too. Market is getting UGLY. AND with Russian CDS spiking that is the market saying, that there is genuine fear out there that Russia is in danger of defaulting.

On the plus side though with the Federal Reserve no longer easing and the rest of the world either easing or getting ready to ease (EU) the USD could keep getting stronger and stronger this year especially so the world will be cheaper and cheaper. The Euro was at a 9 year low against the USD yesterday and if Draghi eases on 1/22 it will get better and parity is even possible in 2015 or 2016.

[MichaelCorleone]

First of many downgrades.....people dont realize how truly screwed the Russian economy is. this is not a transitory phase.

http://uk.businessinsider.com/russias-ec...pse-2015-1

[jimukr104]

Read today that they can force UA to repay loans. Wonder why they don't. Let them go down together!

[Brodiaga]

Im thinking about investing a few thousand in RSX (an ETF tracking the Russian stock market). However, the value has been going down since 2011 even when the oil price was high and there were no sanctions. I believe it's worth more than the current valuation, but perhaps it's worth waiting for it to decline another 30-40% before buying.

[Chengiz88]

Anyone follow the markets today. Was insane action in CHF, made the RUB attack of the past few weeks seem like childs play.

[supak]

Russia to buy Rubles with its currency reserves, pulling itself out of Petrodollar and granting its domestic economy liquidity

Very interesting article

[MichaelCorleone]

I have no idea how reputable this is, BUT if it is true, it could lead to more sanctions and cause the ruble to get hammered even more OR conversely it could lead to the EU completely folding....gonna be interesting in this game of chess...

http://qz.com/327184/putin-russia-is-abo...trys-land/

[Tex Pro]

(01-15-2015 06:21 PM)MichaelCorleone Wrote:  

I have no idea how reputable this is, BUT if it is true, it could lead to more sanctions and cause the ruble to get hammered even more OR conversely it could lead to the EU completely folding....gonna be interesting in this game of chess...

http://qz.com/327184/putin-russia-is-abo...trys-land/

South Ossetia already is essentially part of Russia, so this is no big deal.

The bigger deal is no more gas shipments via Ukraine once the Turk Stream is complete in a few years. That would weaken Ukraine even further. The EU is already getting wary of supporting Ukraine financially, and a Ukraine that is no longer a gas transit country is not financially viable anymore. The EU is going to eventually have to come to an agreement with Russia over this or Ukraine will implode, sending millions of refugees to Europe.

Smart move on Russia's part. Risky but smart.

[Big Nilla]

(01-15-2015 04:08 PM)supak Wrote:  

Russia to buy Rubles with its currency reserves, pulling itself out of Petrodollar and granting its domestic economy liquidity

Very interesting article

Yeah, I saw that. Good article and a clever way to maximize the ruble return while transitioning out of their dollar reserves. Then maybe after that they start to strengthen the ruble by some sort of gold standard and/or tell Europe they need to pay for their natural gas with gold. This replenishes their reserves without helping to prop up the dollar/euro. Can then sell gold for whatever dollars/euros when needed without having to sit on a pile of their worthless paper and without having to put it back into western economies.

I still think it would've been better for Russia to do more, not exactly sure what, to prop up the ruble at better than 50-1 on the dollar and oil prices at around $70 a barrel.

[Easy E]

^Oil will go back up once the Saudis are finished bankrupting most of the small and midsized shale oil players in the USA. No need to do anything. In fact, Russia is actually increasing the amount of oil it exports to make up on volume what it loses on profit per barrel.

As for selling oil/gas for gold, not going to happen. One because there isn't enough gold in Western central banks to do that, and two because the Chinese would get pissed about the price of gold going up while they are loading up on 1000s of tons of it.

Besides, Russia already takes dollars & euros it gets from oil/gas sales and immediately converts a portion of those revenues into gold reserves by selling dollars/euros for gold, so the Russians are already indirectly doing this.

[Big Nilla]

Yep, oil will go up, but what about in the meantime? Why should Russia allow foreign buyers to be the beneficiaries of these low oil price manipulations? It's a zero sum game. Russia as an exporter loses tens of billions of dollars while buying countries save that money which would've went to Russia. Shale and tar sands could probably be mostly destroyed with a Brent oil price of $65-70 for another 9 months. But at $40-45 and the uncertainty of it going less... too much unnecessary pain (ruble and revenue weakening) for Russia that is avoidable.

Yep, not enough gold for oil buying and oil is easily transportable for cheap so Europe would get another source that doesn't require gold payments. But, Russia selling natural gas to Europe for gold (partially or fully... and just for European countries that are antagonistic to Russia), even for a limited time, is doable. Europe has no short-term alternative. I don't expect it to happen any time soon. Just throwing it out there as a tactic that could be used to help Europe adjust their attitude problem and cause them problems. Who cares if Europe eventually finds other gas suppliers 5+ years out. It's a dying market and Russia has alternative markets. So use the leverage.

Yep, Russia can (and does) take in dollars/euros and switches them out for gold. But doing it that way still props up a system of dollar/euro supremacy. Need to either knock a leg out from under them and/or chip away at the international financial system's structure. Russia is already doing a great job chipping away at the international financial system in other ways. Russia should put more emphasis on gold as a currency used in trade to weaken the US and Europe.

[supak]

(01-15-2015 06:58 PM)Easy E Wrote:  

^Oil will go back up once the Saudis are finished bankrupting most of the small and midsized shale oil players in the USA. No need to do anything. In fact, Russia is actually increasing the amount of oil it exports to make up on volume what it loses on profit per barrel.

As for selling oil/gas for gold, not going to happen. One because there isn't enough gold in Western central banks to do that, and two because the Chinese would get pissed about the price of gold going up while they are loading up on 1000s of tons of it.

Besides, Russia already takes dollars & euros it gets from oil/gas sales and immediately converts a portion of those revenues into gold reserves by selling dollars/euros for gold, so the Russians are already indirectly doing this.

Good post.

Something I'd add emphasis to is that shale companies in the US are being forced into something similar to what Russia is doing re: oil production.

With oil so low, shale companies will be forced to up production and flood the market with cheap oil to try and bankrupt their higher-cost competitors and remove supply as quickly as possible (this is actually already happening: US Crude Oil Production Hits Record High). There isn't really any other alternative for these companies as they are so ridiculously leveraged in debt and would otherwise risk default.

When you consider the fact that the FED is contemplating raising interest rates in 2015, this year looks like it's already shaping up to be a real game-changer.

My $0.02

[supak]

Russia cuts off natural gas supply to and through Ukraine

This coming after, a week ago, Russia has the right to accelerate $3B of Ukraine debt

[aphelion]

American shale companies (at least, the reasonably well-managed ones) would do just fine on $65-70 barrel oil. Costs are dropping and they're getting better and more efficient at extracting oil in formerly tight plays.

In fact I suspect that the first loser will be Venezuela, not the American drillers.

[MichaelCorleone]

(01-15-2015 02:11 PM)Chengiz88 Wrote:  

Anyone follow the markets today. Was insane action in CHF, made the RUB attack of the past few weeks seem like childs play.

The Swiss National Bank was just front running the European Central Bank (ECB) because it is highly likely that Draghi announces EU Quantitative Easing (QE) on 1/22 that's why the Euro is down to 1.15 against the USD which is an 11 year low. I think the USD and Euro will be at parity within a year.

Interesting unintended consequences....quite a few people in Poland and Hungary had their mortgages denominated in Swiss Franks. 46% of mortgages in Poland are denominated in Swiss Franks...so half of the people in Poland with mortgages had their mortgages increase 30% in a day, that is just brutal.

http://www.bloomberg.com/news/2015-01-15...nsive.html

The USD is gonna rally for quite some time. The world is going on sale for travelers with USD and it is going to get better and better and better over the next few years.

[PeruLover12]

...

[Chengiz88]

(01-16-2015 02:43 PM)MichaelCorleone Wrote:  

(01-15-2015 02:11 PM)Chengiz88 Wrote:  

Anyone follow the markets today. Was insane action in CHF, made the RUB attack of the past few weeks seem like childs play.

The Swiss National Bank was just front running the European Central Bank (ECB) because it is highly likely that Draghi announces EU Quantitative Easing (QE) on 1/22 that's why the Euro is down to 1.15 against the USD which is an 11 year low. I think the USD and Euro will be at parity within a year.

Interesting unintended consequences....quite a few people in Poland and Hungary had their mortgages denominated in Swiss Franks. 46% of mortgages in Poland are denominated in Swiss Franks...so half of the people in Poland with mortgages had their mortgages increase 30% in a day, that is just brutal.

http://www.bloomberg.com/news/2015-01-15...nsive.html

The USD is gonna rally for quite some time. The world is going on sale for travelers with USD and it is going to get better and better and better over the next few years.

Yep in immediate aftermath zloty and forint got hammered (so did anything not CHF), most of EE which has CHF denom loans is gonna be in for a big squeeze

[Chengiz88]

(01-16-2015 03:42 PM)The Ligurian Wrote:  

Re: Russian gas.

Why don't they just transit via Belarus and avoid transiting Ukraine that way? It's the shortest route to Central Europe. Is the problem Poland? It doesn't make sense that they are building a pipeline to Turkey when they only have 600km's of friendly territory to cross to reach the EU.

Am I missing something obvious?

Russia already sending overtures to Greece about doing business if they exit EZ...The pipeline would make good sense in that respect

[DaveR]

(01-16-2015 03:42 PM)The Ligurian Wrote:  

Re: Russian gas.

Why don't they just transit via Belarus and avoid transiting Ukraine that way? It's the shortest route to Central Europe. Is the problem Poland? It doesn't make sense that they are building a pipeline to Turkey when they only have 600km's of friendly territory to cross to reach the EU.

Am I missing something obvious?

The pipeline through Belarus and Poland is already operating at maximum capacity. Poland won't approve any expansion of that pipeline for political reasons, which is why Nord Stream runs from Russia directly to Germany through the Baltic Sea.

The South Stream project (Rostov-na-Donu --> Crimea --> Bulgaria --> Serbia --> Hungary) has been abandoned because the US put pressure on Bulgaria to 'save' Ukraine.

So instead, the existing pipeline through Turkey will be upgraded and extended to Greece, then another pipeline will be built to Italy (somewhere around Lecce).

The Ukrainian gas transit system is very old and expensive to operate and maintain. Slovakia, Hungary, Romania and Ukraine will either have cover that cost themselves, or they'll have to buy gas from the other direction. Both solutions will be very expensive for them.

[Dem]

(01-16-2015 03:57 PM)DaveR Wrote:  

The South Stream project (Rostov-na-Donu --> Crimea --> Bulgaria --> Serbia --> Hungary) has been abandoned because the US put pressure on Bulgaria to 'save' Ukraine.

1) the Crimea was never included in the route of South stream.
2) Europe has introduced the 3rd energy package on which it is forbidden to own pipeline and gas to the same provider. Europe has deceived the Gazprom with pipeline Opal, the European Commission has allegedly excluded from the requirements of the 3rd energy package, the pipeline, and when Gazprom built it reversed its decision and began to demand that the pipeline could be completed Gazprom gas only 50%, and the remaining 50% of the bandwidth pipe shall be sold at auction to another provider. Who else from Russia will supply gas in addition to Gazprom?
3) Therefore, Gazprom refused to construct the pipe, because still by Europeans forbidden to use the pipeline at full capacity.
4) There are the geopolitics. The US still support terrorists in Syria. When the Americans together with the Saudis with hands of terrorists overthrow the current regime in Syria then the Saudis will build a pipeline to Europe through Syria and Turkey. It's also impossible to exclude from the game Iran, which still might gain access to the European market, and wants to build a pipeline through Turkey to Europe. By this time, Gazprom will already have in Turkey, his tube and his gas storage facilities, and possibly a gas liquefaction plant.

[Big Nilla]

Russia's capital outflows not so bad after-all?
http://www.zerohedge.com/news/2015-01-18...g-us-treas

Quote:

"De-Dollarization" Deepens: Russia Buys Most Gold In Six Months, Continues Selling US Treasuries

The rumors of Russia selling its gold reserves, it is now clear, were greatly exaggerated as not only did Putin not sell, Russian gold reserves rose by their largest amount in six months in December to just over $46 billion (near the highest since April 2013). It appears all the "Russia is selling" chatter did was lower prices enabling them to gather non-fiat physical assets at a lower cost. On the other hand, there is another trend that continues for the Russians - that of reducing their exposure to US Treasury debt. For the 20th month in a row, Russia's holdings of US Treasury debt fell year-over-year - selling into the strength.

Buying low...

Russia gold reserves jump the most in six months in December, near the highest since April 2013... and selling high. Russian holdings of US Treasuries are now at the 2nd lowest since 2008...

It would appear the greatest rotations that no one is talking about are the fiat to non-fiat and the paper to physical shifts occurring in China and Russia.

Some have commented on the "unprecedented" capital flight from Russia, but as Dr. Constantin Gurdgiev explains - Western 'analysts' appear to have forgotten a few things...

Central Bank of Russia released full-year 2014 capital outflows figures, prompting cheerful chatter from the US officials and academics gleefully loading the demise of the Russian economy.

The figures are ugly: official net outflows of capital stood at USD151.5 billion - roughly 2.5 times the rate of outflows in 2013 - USD61 billion. Q1 outflows were USD48.2 billion, Q2 outflows declined to USD22.4 billion, Q3 2014 outflows netted USD 7.7 billion and Q4 2014 outflows rose to USD72.9 billion. Thus, Q4 2014 outflows - on the face of it - were larger than full-year 2013 outflows.

There are, however, few caveats to these figures that Western analysts of the Russian economy tend to ignore. These are:

•USD 19.8 billion of outflows in Q4 2014 were down to new liquidity supply measures by the CB of Russia which extended new currency credit lines to Russian banks. In other words, these are loans. One can assume the banks will default on these, or one can assume that they will repay these loans. In the former case, outflows will not be reversible, in the latter case they will be.
•In Q1-Q3 2014 net outflows of capital that were accounted for by the banks repayment of foreign funding lines (remember the sanctions on banks came in Q2-Q3 2014) amounted to USD16.1 billion. You can call this outflow of funds or you can call it paying down debt. The former sounds ominous, the latter sounds less so - repaying debts improves balance sheets. But, hey, it wouldn't be so apocalyptic, thus. We do not have aggregated data on this for Q4 2014 yet, but on monthly basis, same outflows for the banking sector amounted to at least USD11.8 billion. So that's USD 27.9 billion in forced banks deleveraging in 2014. Again, may be that is bad, or may be it is good. Or may be it is simply more nuanced than screaming headline numbers suggest.
•Deleveraging - debt repayments - in non-banking sector was even bigger. In Q4 2014 alone planned debt redemptions amounted to USD 34.8 billion. Beyond that, we have no idea is there were forced (or unplanned) redemptions.

So in Q3-Q4 2014 alone, banks redemptions were scheduled to run at USD45.321 billion and corporate sector redemptions were scheduled at USD72.684 billion. In simple terms, then, USD 118 billion or 78 percent of the catastrophic capital flight out of Russia in 2014 was down to debt redemptions in banking and corporate sectors. Not 'investors fleeing' or depositors 'taking a run', but partially forced debt repayments.

Let's put this into a slightly different perspective. Whatever your view of the European and US policies during the Global Financial Crisis and the subsequent Great Recession might be, one corner stone of all such policies was banks' deleveraging - aka 'pay down of debt'. Russia did not adopt such a policy on its own, but was forced to do so by the sanctions that shut off Russian banks and companies (including those not directly listed in the sanctions) from the Western credit markets. But if you think the above process is a catastrophe for the Russian economy induced by Kremlin, you really should be asking yourself a question or two about the US and European deleveraging policies at home.

And after you do, give another thought to the remaining USD 33 billion of outflows. These include dollarization of Russian households' accounts (conversion of rubles into dollars and other currencies), the forex effects of holding currencies other than US dollars, the valuations changes on gold reserves etc.

As some might say, look at Greece… Yes, things are ugly in Russia. Yes, deleveraging is forced, and painful. Yes, capital outflows are massive. But, a bit of silver lining there: most of the capital flight that Western analysts decry goes to improve Russian balance-sheets and reduce Russian external debt. That can't be too bad, right? Because if it was so bad, then... Greece, Cyprus, Spain, Italy, Ireland, Portugal, France, and so on... spring to mind with their 'deleveraging' drives...

[Orson]

(01-11-2015 11:48 PM)Brodiaga Wrote:  

Im thinking about investing a few thousand in RSX (an ETF tracking the Russian stock market). However, the value has been going down since 2011 even when the oil price was high and there were no sanctions. I believe it's worth more than the current valuation, but perhaps it's worth waiting for it to decline another 30-40% before buying.

WAIT WAIT WAIT!

Either a political transition from Putin must be in place, or else other offsetting economic fundamentals must change (eg, oil demand and prize rising for foreseeable future), to make a long position worth taking.