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    Russian Economy General News: #2

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    sepheronx

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    Re: Russian Economy General News: #2

    Post  sepheronx on Thu Nov 27, 2014 2:21 pm

    kvs wrote:
    sepheronx wrote:I was reading that Russian net profits in manufacturing is down by 2.5% in september. Question is, wouldnt profits be up due to lower value of ruble (cheaper to produce) and increased demand for import substitution? Agriculture saw the biggest profit increase in Russia.

    Edit: tr1 or anyone else with a better grasp of Russian than me, can you please tell me if what is saying in this link: http://www.finmarket.ru/news/3873989.

    Is it saying net profit of manufacturing dropped by 2.5% and construction as 25%? Cause if so, they still have a profit, but less than before.

    Снижение прибыли было зафиксировано, в частности, в строительстве на 25,3% - на 41,9 млрд руб., в транспорте и связи - на 22,6% (491,4 млрд руб.), в обрабатывающих отраслях - на 2,5% (1 трлн 156,1 млрд руб.).

    The profit level of the construction industry fell by 25.3% not that they are now all in the red.  The drop for manufacturing is 2.5%.   We are in
    a global recession right now and that is why the oil price has dropped.   Of course the tendency will be to assess the these statistics as
    "proof" of the effect of the sanctions.

    В январе-сентябре 2014 года сальдированный финансовый результат (прибыль минус убыток) организаций (без субъектов малого предпринимательства, банков, страховых организаций и бюджетных учреждений) в действующих ценах составил 4 трлн 799,9 млрд рублей (40,0 тыс. организаций получили прибыль в размере 6 трлн 516,9 млрд рублей, 17,3 тыс. организаций имели убыток на сумму 1 трлн 717 млрд рублей), свидетельствуют оперативные данные Федеральной службы госстатистики (Росстата).

    В январе-сентябре 2013 года сальдированный финансовый результат составил 5 трлн 267,5 млрд рублей. Таким образом, за 9 месяцев прибыль организаций сократилась на 8,9%.

    The net profit (all enterprises making a profit minus all enterprises making a loss) went from 5.2675 trillion rubles to 4.7999 trillion rubles over the January to
    September period compared to last year, a drop of 8.9%.


    Figured. They make it sound worst than it really is. They talk as if manufacturing is faultering but if it were the case, it would be a net loss, not a net profit decrease. So they still made profits, but it is 2.5% less than last year.
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    sepheronx

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    Re: Russian Economy General News: #2

    Post  sepheronx on Thu Nov 27, 2014 3:37 pm

    If the Ruble is a floating currency, then why does it fluctuate over oil prices? Ruble is as of right now 47/usd. That said, the economics minister said it cab eat away at gdp by 1.5% but that makes little sense as a lower value means cheaper production. Major complaint though is aimed at the cost of goods (inflation) and debt repayment.

    Belarus is pissed because Russia is doing inspections of eu meats being transfered through Russia to Kazakhstan. I suppose dumb ass lukashenko should do a better job at stopping meat imports from eu to Russia then.

    http://en.itar-tass.com/economy/763819

    Turkey plans on increasing bilateral trade with Russia to $100B.

    Now, how can Russia fight growing inflation during this time?
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    Rmf

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    Re: Russian Economy General News: #2

    Post  Rmf on Thu Nov 27, 2014 4:27 pm

    Russia is a natural inflationary country. as a huge exporter it has to be.

    You create money- give it for paychecks and everything and then export the product - oil ... and now there is money in the country but no goods to cover it.
    thus inflation...

    solution is to import for that money some other goods form outside.
    nature wants equilibrium.

    Or better in short term buy from your companies - but then domestic products would become expencive over time just because ever increasing money supply in circulation ,making imports cheaper.

    nature tends to correct itself.

    or - just get used to higher inflation and and carry on exporting.
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    sepheronx

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    Re: Russian Economy General News: #2

    Post  sepheronx on Thu Nov 27, 2014 4:57 pm

    Well, China, Turkey and other countries all want to up export to Russia. Even Iran was saying how they want to have a much larger trade balance with Russia. If this is the case, maybe they need to increase the spending a bit. Or at least spend more money on domestic development like construction and supply more money to locals.

    Bloomberg is harping how Russians have no money to spend due to increase in poverty, increase in inflation, increase in jobless rate, devaluation of currency..... problem is, we have devaluation of currency in multitudes of countries. We have poverty everywhere, more jobless people in US than Russia. Yet, everyone else manages. All this was mentioned about a new $1B mall in Moscow.
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    kvs

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    Re: Russian Economy General News: #2

    Post  kvs on Thu Nov 27, 2014 5:15 pm

    sepheronx wrote:If the Ruble is a floating currency, then why does it fluctuate over oil prices? Ruble is as of right now 47/usd. That said, the economics minister said it cab eat away at gdp by 1.5% but that makes little sense as a lower value means cheaper production. Major complaint though is aimed at the cost of goods (inflation) and debt repayment.

    Belarus is pissed because Russia is doing inspections of eu meats being transfered through Russia to Kazakhstan. I suppose dumb ass lukashenko should do a better job at stopping meat imports from eu to Russia then.

    http://en.itar-tass.com/economy/763819

    Turkey plans on increasing bilateral trade with Russia to $100B.

    Now, how can Russia fight growing inflation during this time?

    The ruble exchange is determined by market perceptions. The market believes Russia is a single commodity economy.
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    sepheronx

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    Re: Russian Economy General News: #2

    Post  sepheronx on Thu Nov 27, 2014 5:23 pm

    kvs wrote:
    sepheronx wrote:If the Ruble is a floating currency, then why does it fluctuate over oil prices? Ruble is as of right now 47/usd. That said, the economics minister said it cab eat away at gdp by 1.5% but that makes little sense as a lower value means cheaper production. Major complaint though is aimed at the cost of goods (inflation) and debt repayment.

    Belarus is pissed because Russia is doing inspections of eu meats being transfered through Russia to Kazakhstan. I suppose dumb ass lukashenko should do a better job at stopping meat imports from eu to Russia then.

    http://en.itar-tass.com/economy/763819

    Turkey plans on increasing bilateral trade with Russia to $100B.

    Now, how can Russia fight growing inflation during this time?

    The ruble exchange is determined by market perceptions.  The market believes Russia is a single commodity economy.

    Thats funny because Gas prices are never mentioned and Gas is probably Russias larger export over Oil. Same thing with mining minerals or military production, etc.
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    kvs

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    Re: Russian Economy General News: #2

    Post  kvs on Thu Nov 27, 2014 7:18 pm

    sepheronx wrote:
    kvs wrote:
    sepheronx wrote:If the Ruble is a floating currency, then why does it fluctuate over oil prices? Ruble is as of right now 47/usd. That said, the economics minister said it cab eat away at gdp by 1.5% but that makes little sense as a lower value means cheaper production. Major complaint though is aimed at the cost of goods (inflation) and debt repayment.

    Belarus is pissed because Russia is doing inspections of eu meats being transfered through Russia to Kazakhstan. I suppose dumb ass lukashenko should do a better job at stopping meat imports from eu to Russia then.

    http://en.itar-tass.com/economy/763819

    Turkey plans on increasing bilateral trade with Russia to $100B.

    Now, how can Russia fight growing inflation during this time?

    The ruble exchange is determined by market perceptions.  The market believes Russia is a single commodity economy.

    Thats funny because Gas prices are never mentioned and Gas is probably Russias larger export over Oil. Same thing with mining minerals or military production, etc.

    The export of natural gas brings in about $55 billion, but the export of oil brings in around $300 billion (including value added products not just crude oil).
    The downside of a low ruble is that imported junk becomes more expensive. But these days most consumer items are made for next to nothing in
    China so the prices should not be too much to bear. Big ticket items like cars are assembled inside Russia, so they should not be experiencing large
    jumps in price.

    The Russian economy needs the right kind of stimulus. The devaluation in 1998 brought back Russia's industry from the dead. Yeltsin's
    crony regime was artificially propping up the ruble with the GKO pyramid. The import flood nearly killed domestic production in Russia.
    The collapse of the GKO pyramid (which was offering 150% interest at one stage!) and the ruble lead to a massive rebound in Russian
    industry and GDP. Manufacturing went up by 10% in 1999 and the GDP went up by 10% in 2000.

    The expectation in the west that Russian GDP will decline in response to the sanctions and a low ruble is utter nonsense derived
    from pathological wishful thinking.

    Firebird

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    Re: Russian Economy General News: #2

    Post  Firebird on Thu Nov 27, 2014 7:22 pm

    kvs wrote:
    sepheronx wrote:If the Ruble is a floating currency, then why does it fluctuate over oil prices? Ruble is as of right now 47/usd. That said, the economics minister said it cab eat away at gdp by 1.5% but that makes little sense as a lower value means cheaper production. Major complaint though is aimed at the cost of goods (inflation) and debt repayment.

    Belarus is pissed because Russia is doing inspections of eu meats being transfered through Russia to Kazakhstan. I suppose dumb ass lukashenko should do a better job at stopping meat imports from eu to Russia then.

    http://en.itar-tass.com/economy/763819

    Turkey plans on increasing bilateral trade with Russia to $100B.

    Now, how can Russia fight growing inflation during this time?

    The ruble exchange is determined by market perceptions.  The market believes Russia is a single commodity economy.

    Oil is a contributing factor. There are fundamental analysis models and sentiment driven price changes.
    Often you see short term movement, and then something flattens out.

    Additionally, Russia is shifting its focus from Europe trade towards countries with currencies that are weaker. So it becomes in Russia's interest to devalue.

    Additionally, don't forget Russia is allowing the Rouble to freefloat now. So over time it will strenthen again.

    Austin

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    Re: Russian Economy General News: #2

    Post  Austin on Fri Nov 28, 2014 6:14 am

    Yes Rouble will strengthn gradually as market settled down with $70-80 price.

    I suspect Forex reserves in russia might not grow in near future due to low oil price

    http://www.bloomberg.com/quote/RUREFEG:IND
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    Vladimir79

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    Re: Russian Economy General News: #2

    Post  Vladimir79 on Fri Nov 28, 2014 7:12 am

    F'ing Saudis screwed us today...
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    sepheronx

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    Re: Russian Economy General News: #2

    Post  sepheronx on Fri Nov 28, 2014 9:57 am

    Vladimir79 wrote:F'ing Saudis screwed us today...

    They screwed US, Canada and Poland more. Apparently, polands fracking is done for, and oil sands are pretty much as well. Russian gov also saud they wont lower production either.
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    Werewolf

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    Re: Russian Economy General News: #2

    Post  Werewolf on Fri Nov 28, 2014 10:18 am

    Russia just needs to run up more of the sealed mineral and metal mines which were abondoned during Jelzin and dominate the metalurgy market even more and dictate the enonomy of EU/US around with its metals, no one can avoid to buy metals over Russia anyway, so that can be death to auto market along with severa industrial machinery and tool markets here in EU especially germany, if they want to play ridiculous games russia can own everyone, EU has no valuebale resources in their countries in necessary quantity, but russia does.

    Austin

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    Re: Russian Economy General News: #2

    Post  Austin on Fri Nov 28, 2014 5:34 pm

    Vladimir79 wrote:F'ing Saudis screwed us today...

    Cheap oil won't ‘collapse’ Russian economy– minister

    Austin

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    Re: Russian Economy General News: #2

    Post  Austin on Fri Nov 28, 2014 5:38 pm

    Post-Soviet trade bloc to embrace $3 trillion financial system

    The Eurasian Economic Union credit institutions’ aggregate reserves stand at over $2 trillion while the EEU’s stock market is valued at over $1 trillion

    KAZAN, November 28. /TASS/. The post-Soviet trade bloc based on the Customs Union of Russia, Belarus and Kazakhstan will embrace a financial system worth $3 trillion, board member of the Eurasian Economic Commission Timur Suleimanov said at a forum on Eurasian economic integration on Friday.

    The Eurasian Economic Union (EEU) is a new integration association, which will start functioning from January 1, 2015 instead of the Eurasian Economic Community (EurAsEC), which officially ceased to exist on October 10.

    About a thousand banks with a capital of $250 billion are operating on the territory of the EEU member states, Suleimanov said.

    The credit institutions’ aggregate reserves stand at over $2 trillion while the EEU’s stock market is valued at over $1 trillion, he said.

    EEU member states’ mutual investments grew by 14% in 2013 from the previous year to $1.9 billion, he said.

    “The investment figure reflects the level of the countries’ mutual confidence,” Suleimanov said.

    The EEU labor market is estimated at 170 million people and accounts for about 2.5% of the global GDP.

    The Treaty on the establishment of the Eurasian Economic Union was signed by the presidents of Russia, Belarus and Kazakhstan on May 29, 2014 in Astana.

    The agreement is the basic document defining the accords between Russia, Belarus and Kazakhstan for creating the Eurasian Economic Union for the free movement of goods, services, capital and workforce and conducting coordinated, agreed or common policies in key sectors of the economy, such as energy, industry, agriculture and transport.

    The agreement stipulates the transition of Russia, Belarus and Kazakhstan to the next stage of integration after the Customs Union and the common economic space.

    The document says that the union is open for accession by any state sharing the union’s goals and principles on the terms agreed by the member countries.

    The EEU members are currently Russia, Belarus, Kazakhstan and Armenia. Kyrgyzstan is expected to join the union soon.
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    magnumcromagnon

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    Re: Russian Economy General News: #2

    Post  magnumcromagnon on Fri Nov 28, 2014 6:20 pm

    Austin wrote:Post-Soviet trade bloc to embrace $3 trillion financial system

    The Eurasian Economic Union credit institutions’ aggregate reserves stand at over $2 trillion while the EEU’s stock market is valued at over $1 trillion

    KAZAN, November 28. /TASS/. The post-Soviet trade bloc based on the Customs Union of Russia, Belarus and Kazakhstan will embrace a financial system worth $3 trillion, board member of the Eurasian Economic Commission Timur Suleimanov said at a forum on Eurasian economic integration on Friday.

    The Eurasian Economic Union (EEU) is a new integration association, which will start functioning from January 1, 2015 instead of the Eurasian Economic Community (EurAsEC), which officially ceased to exist on October 10.

    About a thousand banks with a capital of $250 billion are operating on the territory of the EEU member states, Suleimanov said.

    The credit institutions’ aggregate reserves stand at over $2 trillion while the EEU’s stock market is valued at over $1 trillion, he said.

    EEU member states’ mutual investments grew by 14% in 2013 from the previous year to $1.9 billion, he said.

    “The investment figure reflects the level of the countries’ mutual confidence,” Suleimanov said.

    The EEU labor market is estimated at 170 million people and accounts for about 2.5% of the global GDP.

    The Treaty on the establishment of the Eurasian Economic Union was signed by the presidents of Russia, Belarus and Kazakhstan on May 29, 2014 in Astana.

    The agreement is the basic document defining the accords between Russia, Belarus and Kazakhstan for creating the Eurasian Economic Union for the free movement of goods, services, capital and workforce and conducting coordinated, agreed or common policies in key sectors of the economy, such as energy, industry, agriculture and transport.

    The agreement stipulates the transition of Russia, Belarus and Kazakhstan to the next stage of integration after the Customs Union and the common economic space.

    The document says that the union is open for accession by any state sharing the union’s goals and principles on the terms agreed by the member countries.

    The EEU members are currently Russia, Belarus, Kazakhstan and Armenia. Kyrgyzstan is expected to join the union soon.

    +1, excellent article! The great thing about EEU is that it won't be based on hedge funds, hot money, speculative bets, securities and derivatives abuse, instead it'll most likely revolve around industrial production, agricultural production, infrastructure development, scientific development, and a booming space industry.
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    Rmf

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    Re: Russian Economy General News: #2

    Post  Rmf on Fri Nov 28, 2014 7:22 pm

    like i said in previous posts here.

    http://www.russiadefence.net/t3552p75-the-status-of-the-russian-economy-and-its-perceived-oil-dependency#70955

    here is something to wrap your head around... scratch

    http://www.marketwatch.com/story/10-us-shale-oil-stocks-getting-crushed-the-most-today-2014-11-28?mod=MW_story_top_stories

    so usa shale companies are going BUST !

    and the talk about russia needing 100$ oil to ballance budget ,eg. be at -0 , ahahaha while usa has trillions of defficit every year !!!
    how big price should be for usa to have a  ballanced budget ???
    really man..... unshaven

    also lets not forget strong dollar means cheap-er gold.

    And russia is buying like crazy together with china , many europeans are quietly getting their reserves back from usa to homeland due to fear usa actually hasnt got as much gold as it claims and may use european reserves to keep a fasade going !!
    now that is a huge strike at usa dollar, and much bigger sourse of panic for the pentagon.

    -------

    http://www.russiadefence.net/viewtopic.forum?t=7460

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